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Norton
Social climber
the Wastelands
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Oct 20, 2011 - 06:52pm PT
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HighTraverse
Trad climber
Bay Area
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Oct 20, 2011 - 06:54pm PT
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I think you left out a negation, so to give you credit, I'll insert it.
Citi was not betting against individual home owners, but the buyers of CDO's and CMO's Well, yes, you're more correct than I.
The ethical misconduct is the same.
And I know a heck of a lot more about banking than you give me credit for. Of course, I don't RUN one, nor do I come from a family that owns one. I work hard for my living, usually 50 - 60 hours a week, when I can find employment.
So I plead nolo contendre.
Tell me now why Citi betting against their own products, the CDO and CMO's, was good for the financial system. (and yes, I do have a pretty good idea what these obfuscating instruments do and why they were created)
I await enlightenment.
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 20, 2011 - 06:58pm PT
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Isn't banking when you take other people's money and use it to make lots of money for yourself without doing any work, other than making a few phone calls and sending an email or two?
Oh yeah, and you nickel and dime the people who put money in your bank every time they need to to use some of it.
And you also loan those peoples' money to other people for a much higher interest rate than you pay them to use it.
And really good bankers do that to A LOT of really wealthy people all at the same time
Bankers are kind of like parasites
Here is some news: Banks no longer WANT your deposits. They can't make money from them because it costs more to insure them than they get in interest.
It costs a large bank about $200 per year in administrative fees to manage your pathetic checking account.
So tell me, how are they making money from you?
Of course, if you are right about the profits, you are free to own part of a bank yourself! Buy some stock in BofA, Wells, CITI...
Not sure I would though. Banks are too heavily regulated and it is getting worse. BofA's charge of $5 per month for using a check card to purchase is the most transparent fee I have ever heard of, yet even Obama is hinting that it may be "illegal".
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HighTraverse
Trad climber
Bay Area
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Oct 20, 2011 - 07:00pm PT
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ahhh yes Rush Limbaugh.
Once upon a year, many years ago, my little ones, I was in a rental car and turned on the radio to Rush. I'm perfectly OK with listening to someone I'm likely to disagree with and I'd never heard him before so I listened. Seriously. In about 30 minutes I hadn't heard him say one cogent thing, nothing logical, nothing supported by facts. And mostly unintelligible nonsense. And this was before his brain was drug addled and senile. Bah Humbug.
He makes an attempt to know what he's talking about but really can't make the grade.
At least he doesn't scream and rant like Glenn Beck.
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 20, 2011 - 07:02pm PT
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Tell me now why Citi betting against their own products, the CDO and CMO's, was good for the financial system. (and yes, I do have a pretty good idea what these obfuscating instruments do and why they were created)
I assume the CDOs were crap, so somebody should have bet against them. The reason the housing bubble lasted so long is that very few people bet AGAINST it. Short sellers are able to burst bubbles before they get dangerously large.
And don't forget, short sellers were responsible for exposing Enron, rather than Federal regulators.
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HighTraverse
Trad climber
Bay Area
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Oct 20, 2011 - 07:10pm PT
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Of course the winners in the short selling game are the trading companies that can afford the fastest computers and the most expensive algorithm creators and programmers.
Not that I object to short selling in general. As long as there's an even playing field; a fundamental requirement for any honest bidding transaction.
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 20, 2011 - 07:15pm PT
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Of course the winners in the short selling game are the trading companies that can afford the fastest computers and the most expensive algorithm creators and programmers.
Most of the time, but not always. In 2008 they took it on the chin because their algorithms were written to make money on arbitrage, but the market kept moving in one direction - down.
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bluering
Trad climber
Santa Clara, CA
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Oct 20, 2011 - 07:16pm PT
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How about that stupid NAFTA BushCo agreement to allow Mexican national truckers to do business in the U.S.... all you dumb sonsabiches who complain about illegals and unemployment rates don't have much to say about it now do ya.
I just hope none of you are truck drivers....
DMT
If you'll recall, I opposed that. Just for the record...
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August West
Trad climber
Where the wind blows strange
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Oct 20, 2011 - 07:41pm PT
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I thought the banks paid the Tarp money back? Obama assured us it would be.
We were told they did time and time again by the Obama drones. They had charts
and graphs and they even called everyone stupid who didn't agree with them.
So, I ask all the Obama drones protesting for a bigger government:
Where is that money now? Because, I remember quite well, we were told it
would all be paid back and we would even make some money when it was over.
Why is it that we are now arguing about how the banks have the money?
The Tarp money, that President Bush and Paulson pushed through congress to save the banks that self-destructed during the Bush presidency has largely been recovered by the Obama administration, some of it even at a profit. Fannie Maie and Freddie Mac has not and there will be some losses there, but Wall Street Banks and GM have mostly paid it back.
The banks should have been better regulated in the first place and the Tarp money should have had tougher terms (when/if the banks recovered, the taxpayers should have reaped more of the benefit since they were on the hook if the bank didn't recover).
But by and large, the Tarp program and other actions prevented a Great Depression outcome.
But the economy was left with a huge hole that was going to take a while to climb out of even if the administration/Fed/congress continued smart policies. That hasn't happened, and the Greek/Euro crises could put us right back to a Lehman moment (if the Repubs don't get us there first).
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Norton
Social climber
the Wastelands
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Oct 20, 2011 - 07:43pm PT
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Yeah but, facts are irrelevant
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bluering
Trad climber
Santa Clara, CA
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Oct 20, 2011 - 07:57pm PT
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The Tarp money, that President Bush and Paulson pushed through congress to save the banks that self-destructed during the Bush presidency has largely been recovered by the Obama administration, some of it even at a profit.
Sounds like you want it both ways.
Bush saved the banks (who were encouraged to take bad home-loans) from further killing this country, and Obama gets credit for recovering the money? Is that what you're saying?
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 20, 2011 - 08:14pm PT
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But by and large, the Tarp program and other actions prevented a Great Depression outcome.
But the economy was left with a huge hole that was going to take a while to climb out of even if the administration/Fed/congress continued smart policies. That hasn't happened, and the Greek/Euro crises could put us right back to a Lehman moment (if the Repubs don't get us there first).
We get the Depression either way. The TARP program was a gift to special interests in the financial industry. There should have been a much larger hole blown in this industry, and then we would then have had a chance to be climbing out of the Depression by now. With TARP, we followed the Japanese model to a tee. They did not escape a Depression, and neither will we.
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 20, 2011 - 08:24pm PT
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It lasted as long as it did because of the investment funds that bet against the subprime mortgage backed CDOs in the form of credit default swaps. They rigged the game by dictating the structure of the CDOs - which were guaranteed to fail - to the banks. Without these investment funds rigging the game, many of the CDOs based on subprime mortgages would never have been created because there was no market for them, as no one wanted the extremely risky equity tranch of the CDO.
Wrong. Credit Default Swaps betting against Subprime Mortgage CDOs were not written until 2006, when PRIVATE investors like John Paulson and Michael Burry foresaw the coming collapse and had them written by the suckers at the large investment banks. By 2006 the bubble had reached it's maximum size.
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OR
Trad climber
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Oct 21, 2011 - 10:22am PT
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Thats great^^^^
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Mangy Peasant
Social climber
Riverside, CA
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Oct 21, 2011 - 11:08am PT
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With TARP, we followed the Japanese model to a tee. They did not escape a Depression, and neither will we.
In another thread you say the US prints too much money...now you say we are mimicking Japan.
Except we are not.
http://www.pcasd.com/us_not_going_down_japans_road
Is deflation bad or good? Please make up your mind.
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cybele
Ice climber
the hell of grad school
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Oct 21, 2011 - 01:19pm PT
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It's not exactly on topic, but akin. I was recently very intrigued by the movie "Why we Fight," about the current military-industrial-congressional complex. It is available for free online.
And I was impressed by the wide variety of people who turned out here in Phoenix for the 99% rally last weekend. Politically, economically, and racially heterogenius.
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