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Thread: "Too Big To Fail" is bigger than ever.

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    Banned Eric Stoner's Avatar
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    Default "Too Big To Fail" is bigger than ever.

    Has anybody read Dodd - Frank ? Maybe we should have because one provision effectively designates our largest banks as "Too Big to Fail " and guarantees their survival. We have 6,000 banks in this country but half the entire industry's assets are concentrated in the five largest banks. 20 years ago the top 10 banks accounted for 26% of all commercial banking assets. Now it is 61%. None of these institutions are being demure about their status. On the contrary, according to Andrew Haldane of the Bank Of England, they use their status to get preferential access to investment capital. In 2009, the silent subsidies enjoyed by these banks totalled some $2.3 trillion.

    Several recent fiascoes have shown that the management of these banks do not know or fully understand their own risk exposures.

    Richard Fisher, President of the Federal Reserve Bank of Dallas ( one of the few members of the Bd. Of Governors with some brains btw ) has shown that breaking up the largest banks would INCREASE their value and the supposed economies of scale that were to result from their large size do not exist.

    Worst of all, the Financial Crisis did NOT have a chastening effect on the corporate culture of these banks. They still worship at the altar of short term fees and bonuses. Since Glass-Steagall has not been revived the next crisis will dwarf the last one thanks to the increased size of our largest banks.
    Last edited by Eric Stoner; 10-17-2012 at 06:36 AM.

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    God/dess Zofia's Avatar
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    Default Re: "Too Big To Fail" is bigger than ever.

    Good points Eric. The main reason for the jobless recovery, such as it is, is the TBTF banks have not lent the bailout money or their subsequent profits. No lending leads to slow economic growth. Slow economic growth leads to fewer new jobs created. Thus we have the jobless recovery. Break up the TBTF banks, get the bankers back in the business of lending money and let the investment bankers go their own way and yes, both will be more valuable and the economy will begin to revive. Because right now, the TBTF banks make enough profits on trading and borrowing money from the Fed at almost zero percent and loaning the same money back to the Treasury at 3%.

    Z

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    Default Re: "Too Big To Fail" is bigger than ever.

    Z.... Please don't make it sound like an accident..... The world is run by bankers.... For the benefit of Bankers..... Could you imagine any other industry causing this kind of damage.... and not only do they get bigger..... Nobody goes to jail..... You can bet if the transportation industry caused this damage..... the heads of the airlines & auto industries would be on trial.
    The country has been looted.

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    Banned Eric Stoner's Avatar
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    Default Re: "Too Big To Fail" is bigger than ever.

    Quote Originally Posted by mikef View Post
    Z.... Please don't make it sound like an accident..... The world is run by bankers.... For the benefit of Bankers..... Could you imagine any other industry causing this kind of damage.... and not only do they get bigger..... Nobody goes to jail..... You can bet if the transportation industry caused this damage..... the heads of the airlines & auto industries would be on trial.
    Whose Justice Department has given them a free ride ? There was at least one case involving Goldman Sucks that clearly looked like criminal fraud to me. On the other hand , there have been some serious fines paid to settle actions brought by the SEC.

    For the most part, what was done was NOT illegal. Maybe it should have been but no laws were broken.

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    Default Re: "Too Big To Fail" is bigger than ever.

    Quote Originally Posted by Eric Stoner View Post
    Whose Justice Department has given them a free ride ? There was at least one case involving Goldman Sucks that clearly looked like criminal fraud to me. On the other hand , there have been some serious fines paid to settle actions brought by the SEC.

    For the most part, what was done was NOT illegal. Maybe it should have been but no laws were broken.
    Check out a few of these illegal actions in the attached link.... Which does mention the rigging of the Libor rate.... Surely that was illegal.

    http://www.ritholtz.com/blog/2012/07...l-enterprises/




    The Systematic looting that has been going on is a great way to enrich yourself.... This is how it works.

    1. Break laws.
    2. Collect big salary and bonus.
    3. Company pays fine for malfeasance.
    4. Go back to step 1.


    This is the way business is done..... Nobody wants to admit it..... But we are living in a third world country as far as laws are concerned.


    The empirical evidence argues they don’t. A 2011 New York Times analysis of enforcement actions during the last 15 years found at least 51 cases in which 19 Wall Street firms had broken antifraud laws they had agreed never to breach.
    Goldman Sachs, Morgan Stanley, JPMorgan Chase and Bank of America, among others, have settled fraud cases by stipulating they would never again violate an antifraud law, only to do so again and again and again. Bank of America’s securities unit has agreed four times since 2005 not to violate a major antifraud statute, and another four times not to violate a separate law. Merrill Lynch, which Bank of America acquired in 2008, has separately agreed not to violate the same two statutes seven times since 1999.

    http://onthecommons.org/magazine/cor...crime-does-pay
    The country has been looted.

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    God/dess Zofia's Avatar
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    Default Re: "Too Big To Fail" is bigger than ever.

    Quote Originally Posted by mikef View Post
    Z.... Please don't make it sound like an accident..... The world is run by bankers.... For the benefit of Bankers..... Could you imagine any other industry causing this kind of damage.... and not only do they get bigger..... Nobody goes to jail..... You can bet if the transportation industry caused this damage..... the heads of the airlines & auto industries would be on trial.
    It's no accident, that's for sure. That's why I'm voting against Obama, the TBTF banks man in Washington.

    XOXO
    Z

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    Default Re: "Too Big To Fail" is bigger than ever.

    Quote Originally Posted by Zofia View Post
    It's no accident, that's for sure. That's why I'm voting against Obama, the TBTF banks man in Washington.

    XOXO
    Z
    Yes... That is my biggest disappointment with President Obama..... I doubt Mitt Romney will do anything to end the looting either..... In a world where the crime is worth the punishment..... Expect crime to continue....
    The country has been looted.

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    Default Re: "Too Big To Fail" is bigger than ever.

    for factual purposes only ...

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    Default Re: "Too Big To Fail" is bigger than ever.

    As to this thread, the die was cast when Obama re-introduced the wolves back into the henhouse.


    Quote Originally Posted by Melonie View Post
    Exactly what "facts" are you trying to present and to what end? What does Buffett's investment in BofA have to do with anything?

    How about we try an actual news source:
    http://mobile.businessweek.com/news/...-million-short

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    Default Re: "Too Big To Fail" is bigger than ever.

    ^^^ the 'Bears' explained the relevance at Pay particular attention to the 'walk-on' by ersatz Warren Buffet.

    The actual facts relating to B of A's granting of a 15 million 'sweetheart' loan to the Obama campaign are, IMHO at least, a minor detail. The bigger picture I was attempting to make reference to involves the behind the scenes relationship between Warren Buffet / B of A / Wall St., Ben Bernanke / the FED, and Barack Obama / Washington DC democrats.
    Last edited by Melonie; 10-21-2012 at 06:53 AM.

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