Follow along with the video below to see how to install our site as a web app on your home screen.
Note: This feature currently requires accessing the site using the built-in Safari browser.
Additionally, the SEC voted unanimously in 2004 to remove the capital reserve requirements for the biggest broker-dealers. So when their derivatives shit ultimately blew up in their faces, NONE OF THEM had had any cash reserves to cover their losses. And we all know what happened to Bear Stearns, Merrill Lynch, and Lehman Brothers as a result.
.
Yes. They were bailed out by the Bush and Obama Administrations.
The cause of the crash was not derivatives. That was only later. The cause was bad mortgages made because the Fed kept rates too low, making mortgage loans very attractive to lenders. That is the only "regulation" that can be blamed.
You clearly do not understand the role of derivatives. And you smell funny.
I understand derivatives and you're wrong. The derivatives that brought down the economy were stuffed with bad mortgages that Wall Street filled structured product with. That's why investment banks went into subprime origination to begin with, so they could have a study supply of inventory to package into structured products and sell to investors. This demand was a big reason why underwriting standards fell.
I deal with these people all the time It's a classic agency problem. They are risking the shareholders money, not their own.
In investment banking and trading, you can make enough in three to five years to retire if you're good. Top guys literally make tens or even hundreds of millions of dollars in a very short period of time. Most of these guys do NOT stay in the business once they have made their bundle because it is a brutal business.
OK, so you have no evidence whatsoever. First off, investment banking and trading are not necessarily what banks do. Second, you have dealt with a tiny fraction of all the people who have ever been involved in banking. Third, you are working in a "post moral hazard" business, where failures will be taken up by Uncle.
In all, your opinion here is not based on anything.
My evidence is the Financial Crisis and the bets that the big banks took. What's your evidence?
It only needs to be a tiny fraction of the people. Tiny fractions of people drove the structured finance industry, which is where most of the losses took place.
Citi CEO: Banks need regulation - Video - Business News
hmm banks agreeing banks need to be regulated. interesting....
Citi CEO: Banks need regulation - Video - Business News
hmm banks agreeing banks need to be regulated. interesting....
NOt that I disagree, but if the Banks were acting ethically and in the public interest, they wouldn't need so many darned regulations.
No regulation was ever drafted on spec. They were drafted because someone tried to pull something somewhere.
Citi CEO: Banks need regulation - Video - Business News
hmm banks agreeing banks need to be regulated. interesting....
NOt that I disagree, but if the Banks were acting ethically and in the public interest, they wouldn't need so many darned regulations.
No regulation was ever drafted on spec. They were drafted because someone tried to pull something somewhere.
Why should banks act in the public interest since they are not public entities? Is this like companies should hire people because it's their patriotic duty?
Citi CEO: Banks need regulation - Video - Business News
hmm banks agreeing banks need to be regulated. interesting....
NOt that I disagree, but if the Banks were acting ethically and in the public interest, they wouldn't need so many darned regulations.
No regulation was ever drafted on spec. They were drafted because someone tried to pull something somewhere.
Why should banks act in the public interest since they are not public entities? Is this like companies should hire people because it's their patriotic duty?
NOt that I disagree, but if the Banks were acting ethically and in the public interest, they wouldn't need so many darned regulations.
No regulation was ever drafted on spec. They were drafted because someone tried to pull something somewhere.
Why should banks act in the public interest since they are not public entities? Is this like companies should hire people because it's their patriotic duty?
Banks operate under a federal charter. It's not like they are Mom's bakery. The Federal Government ends up being on the hook for their bad loans. (You know the FSLIC and FDIC).
I mean, you could run a non-insured bank, but no sane person would put their money into it.
The problem with this crisis is that you got exactly what economic conservatives have been preaching for years- Lax regulation will bring prosperity.
Didn't work out that way, did it.
(oh, wait. wait. This is where you'll blame some 30 year old law that let poor people get mortgages.)
Mortgages, however structured, are not derivatives.
The demand which came from structured products lowered underwriting standards and created bad mortgages which otherwise would not have been created. Without the structured product market, the demand for subprime mortgages would have been significantly less. It still would have been big but the demand for structured products played a big role in inflating the Housing Bubble.
Yes, securitizing mortgages played a huge part in inflating the bubble.
Securitization was allowed under Glass-Steagall.
MBS are not derivatives.
Operating under a federal charter (and some operate under state charters) is not the same as being a wholly owned subsidiary of the gov't. Mom's Bakers also operates under a business license.
You at least have correctly identified the issue as gov't regulation, in the form of deposit insurance.
There was no lax regulation in the banking sector. In fact there were few violations of regulations. There were bad business decisions but unless you want to outlaw bad decisions that's the downside of a capitalist system.
Actually thats the upside as well: the market disciplines poor performers with bankruptcy and dissolution. Only gov't action short circuits that important feature.
Operating under a federal charter (and some operate under state charters) is not the same as being a wholly owned subsidiary of the gov't. Mom's Bakers also operates under a business license.
You at least have correctly identified the issue as gov't regulation, in the form of deposit insurance.
There was no lax regulation in the banking sector. In fact there were few violations of regulations. There were bad business decisions but unless you want to outlaw bad decisions that's the downside of a capitalist system.
Actually thats the upside as well: the market disciplines poor performers with bankruptcy and dissolution. Only gov't action short circuits that important feature.
Except that it doesn't.
We socialized the risk and capitalized the benefits, and then wondered why the Banksters acted badly.
This is where I fault Obama and Bush. Thre should have been high profile prosecutions of the bad actors, and there weren't.
BUt of course, there was lax regulation... Chris Cox SEC was too busy watching porn videos to do their job.
Yes. They were bailed out by the Bush and Obama Administrations.
The cause of the crash was not derivatives. That was only later. The cause was bad mortgages made because the Fed kept rates too low, making mortgage loans very attractive to lenders. That is the only "regulation" that can be blamed.
You clearly do not understand the role of derivatives. And you smell funny.
I understand derivatives and you're wrong. The derivatives that brought down the economy were stuffed with bad mortgages that Wall Street filled structured product with. That's why investment banks went into subprime origination to begin with, so they could have a study supply of inventory to package into structured products and sell to investors. This demand was a big reason why underwriting standards fell.
I am not wrong. The derivatives simply magnified the effect of making mortgages in the first place. But the base problem was low rates by Fed encouraging the high margin that mortgage lending provided. Derivatives increased the leverage of those mortgage blocks, increasing the destruction when they inevitably went bad.
The derivatives were not to blame.
I understand derivatives and you're wrong. The derivatives that brought down the economy were stuffed with bad mortgages that Wall Street filled structured product with. That's why investment banks went into subprime origination to begin with, so they could have a study supply of inventory to package into structured products and sell to investors. This demand was a big reason why underwriting standards fell.
I am not wrong. The derivatives simply magnified the effect of making mortgages in the first place. But the base problem was low rates by Fed encouraging the high margin that mortgage lending provided. Derivatives increased the leverage of those mortgage blocks, increasing the destruction when they inevitably went bad.
The derivatives were not to blame.
I agree with you that the Fed was the #1 reason for the disaster. However, bubbles occur when credit expands at a rapid pace, and derivatives were a weapon that gunned mortgage demand. If you want to blame Wall Street and the ratings agencies instead of derivatives per se, that's fine. But without the structures to expand credit that derivatives provided, the Housing Bubble would still have been big IMHO but not as big as it became.
Operating under a federal charter (and some operate under state charters) is not the same as being a wholly owned subsidiary of the gov't. Mom's Bakers also operates under a business license.
You at least have correctly identified the issue as gov't regulation, in the form of deposit insurance.
There was no lax regulation in the banking sector. In fact there were few violations of regulations. There were bad business decisions but unless you want to outlaw bad decisions that's the downside of a capitalist system.
Actually thats the upside as well: the market disciplines poor performers with bankruptcy and dissolution. Only gov't action short circuits that important feature.
Except that it doesn't.
We socialized the risk and capitalized the benefits, and then wondered why the Banksters acted badly.
This is where I fault Obama and Bush. Thre should have been high profile prosecutions of the bad actors, and there weren't.
BUt of course, there was lax regulation... Chris Cox SEC was too busy watching porn videos to do their job.
Except that after the bailout the banks largely paid back what the gov't had given them with interest. So we socialized the benefits too.
Another left-wing slogan shot to hell.
Again, no regulations were broken. And no banker deserved to be prosecuted for bad decision making. I realize that image feeds your class envy and hatred but that's all it does.
NOt that I disagree, but if the Banks were acting ethically and in the public interest, they wouldn't need so many darned regulations.
No regulation was ever drafted on spec. They were drafted because someone tried to pull something somewhere.
Why should banks act in the public interest since they are not public entities? Is this like companies should hire people because it's their patriotic duty?
Banks operate under a federal charter. It's not like they are Mom's bakery. The Federal Government ends up being on the hook for their bad loans. (You know the FSLIC and FDIC).
I mean, you could run a non-insured bank, but no sane person would put their money into it.
The problem with this crisis is that you got exactly what economic conservatives have been preaching for years- Lax regulation will bring prosperity.
Didn't work out that way, did it.
(oh, wait. wait. This is where you'll blame some 30 year old law that let poor people get mortgages.)
Why should banks act in the public interest since they are not public entities?
The FDIC is funded by the banks.
What lax regulation are you talking about?
There are more regulations then ever.
Except that after the bailout the banks largely paid back what the gov't had given them with interest. So we socialized the benefits too.
The demand which came from structured products lowered underwriting standards and created bad mortgages which otherwise would not have been created. Without the structured product market, the demand for subprime mortgages would have been significantly less. It still would have been big but the demand for structured products played a big role in inflating the Housing Bubble.
Yes, securitizing mortgages played a huge part in inflating the bubble.
Securitization was allowed under Glass-Steagall.
MBS are not derivatives.
CDOs are.
Except that after the bailout the banks largely paid back what the gov't had given them with interest. So we socialized the benefits too.
We socialized the business loss so the banks wouldn't fail. However, did any of the traders, bank executives or anyone else pay back the huge amounts of income that they realized before the collapse?
No they did not. So not only did they tank the economy, screw up the banking industry and make huge amounts of money, no one was really punished and they didn't have to give back a dime.
Your idea that we socialized the benefits is bull shit.
