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  • #61
    Originally posted by notyoueither
    Am I correct in assuming that American authorities were willing to take a hit, step in, and save one (the first one, OK two, but mortgages are mom and apple pie) in an effort to put the finger in the ****, but are able to recognise they can not hold back the flood?
    No, this is opposite of what is happening. Lehman is not considered too big to fail, so it was allowed to fail. The American authorities have as many fingers as there are possible leaks in all the dikes.

    Apparently, the authorities thought the financial system could handle unwinding of $650 billion in liabilities of one sort or another that Lehman. (At least, that's the amount that's listed on the balance sheet. Who knows what other liabilities should have been on the balance sheet.)
    Last edited by DanS; September 15, 2008, 05:41.
    I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

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    • #62
      AIG's going down fast. In pre-market trading, AIG is down 27%.
      I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

      Comment

      • #63
        Originally posted by Timexwatch
        Am I missing something when already large financial institutions that are 'too big to fail' are merging to create even larger institutions that are 'too big to fail'. As much as a free-marketeer that I am, isn't it about time for the feds to maybe look at breaking up/reregulating these guys?
        Bigger banks with less competition are more profitable. That's the way it is with more industries actually. It's just more important in the banking industry.
        I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
        - Justice Brett Kavanaugh

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        • #64
          Originally posted by DanS


          No, this is opposite of what is happening. Lehman is not considered too big to fail, so it was allowed to fail. The American authorities have as many fingers as there are possible leaks in all the dikes.

          Apparently, the authorities thought the financial system could handle unwinding of $650 billion in liabilities of one sort or another that Lehman. (At least, that's the amount that's listed on the balance sheet. Who knows what other liabilities should have been on the balance sheet.)
          I don't necessarily agree with this guy but...

          "It's a return to pure capitalism, the survival of the fittest — the government can't and won't bail everybody out," said Justin Urquhart Stewart, investment director at 7 Investment Management in London.

          I question the institutions like BofA's ability to buy up these companies as they fail more than the governments ability to bail them out.
          I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
          - Justice Brett Kavanaugh

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          • #65
            Originally posted by Asher
            Yeah, it's real funny Aggie.
            :eatpopcorn:
            I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
            - Justice Brett Kavanaugh

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            • #66
              and in other news

              BBC NEWS | Business | Leading US stocks see sharp fall
              http://news.bbc.co.uk/1/hi/business/7615961.stm
              BBC, News, BBC News, news online, world, uk, international, foreign, british, online, service


              one more turn markets are crashing

              &

              Anantha Nageswaran, head of investment research at Bank Julius Baer, said: "The dollar rally over the last two months was unsustainable and it was brought about by short-term liquidation pressures by many hedge funds and because of a mistaken feeling that the US economic numbers had turned the corner."


              dollar predicted to go back down again... will we see 2/1 with Euro soon? it's sort of funny and scary at the same time...
              Socrates: "Good is That at which all things aim, If one knows what the good is, one will always do what is good." Brian: "Romanes eunt domus"
              GW 2013: "and juistin bieber is gay with me and we have 10 kids we live in u.s.a in the white house with obama"

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              • #67
                Shouldn't the thread title contain the phrase "Let the good times roll"?
                So get your Naomi Klein books and move it or I'll seriously bash your faces in! - Supercitizen to stupid students
                Be kind to the nerdiest guy in school. He will be your boss when you've grown up!

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                • #68
                  Originally posted by DanS


                  Banks, when properly capitalized, are profitable organizations that can fix a lot of bad deals.

                  So long as the resulting institution is properly capitalized, there's nothing wrong with a strong bank taking over a weak one.
                  Apparently, the authorities thought the financial system could handle unwinding of $650 billion in liabilities of one sort or another that Lehman. (At least, that's the amount that's listed on the balance sheet. Who knows what other liabilities should have been on the balance sheet.)
                  I understand that banks, if properly capitalized, can withstand a lot of turbulence, but what I'm getting at there is that if the big banks are too big to allow them to fail, but my main question is: What kind of regulatory safeguards, short of breaking up them up, can be put in place to prevent one financial entity crashing the whole system?

                  If I were BoA, Goldman, J.P., etc., I'd be watching over my shoulder to see what, if anything, Frank, Bachus, Dodd, and Shelby are cooking up on the Hill (especially Frank); the first big bank/association to go to the hill with some good re-regulatory ideas in order to beat Chairman Frank to the punch will be the big winner.

                  Edit:

                  McCain: Wall Street woes point to regulation need
                  If you look around and think everyone else is an *******, you're the *******.

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                  • #69
                    Ollie: I'm all for it. I've got money to invest and stocks are going on sale.

                    That said, that thread title (R) by me and is attached to the US payrolls number. There won't be a genuine LTGTR thread for a couple of years.
                    Last edited by DanS; September 15, 2008, 09:59.
                    I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

                    Comment

                    • #70
                      Originally posted by Timexwatch
                      I understand that banks, if properly capitalized, can withstand a lot of turbulence, but what I'm getting at there is that if the big banks are too big to allow them to fail, but my main question is: What kind of regulatory safeguards, short of breaking up them up, can be put in place to prevent one financial entity crashing the whole system?

                      If I were BoA, Goldman, J.P., etc., I'd be watching over my shoulder to see what, if anything, Frank, Bachus, Dodd, and Shelby are cooking up on the Hill (especially Frank); the first big bank/association to go to the hill with some good re-regulatory ideas in order to beat Chairman Frank to the punch will be the big winner.
                      One thing to note is that banks are already regulated rather heavily. I understand that there is a 10% rule for banking (not investment banking, but your normal banks) -- no bank can be larger than 10% of the system. I wonder whether Bank of America was forbidden to buy another large bank because of this rule and had to buy a brokerage/investment bank if they wanted to expand.
                      I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

                      Comment

                      • #71
                        Originally posted by OneFootInTheGrave
                        dollar predicted to go back down again... will we see 2/1 with Euro soon? it's sort of funny and scary at the same time...
                        IMO, the dollar is already undervalued, judging by the trade data. But currencies often overshoot.
                        I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

                        Comment

                        • #72
                          One thing to note is that banks are already regulated rather heavily.


                          Investment banks, much less so.

                          Public insurance without real regulation is a moral hazard.
                          "Beware of the man who works hard to learn something, learns it, and finds himself no wiser than before. He is full of murderous resentment of people who are ignorant without having come by their ignorance the hard way. "
                          -Bokonon

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                          • #73
                            Heavier regulation requires bigger banks. If you regulate small banks they won't be profitable. Also, it's more likely that a bunch of small banks will cause a crisis than less big banks.
                            I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
                            - Justice Brett Kavanaugh

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                            • #74
                              AIG is one of my firm's clients, and we were in discussions to broaden that relationship, luckily for me, we have plenty of work to go around in case they tank.

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                              • #75
                                Not quite armageddon today.
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