With a record of poor shareholder returns, why do the TBTF banks (JPM, C, BAC) even exist, writes Sheila Bair. Capital markets certainly wouldn't finance such "unstable behemoths" if it weren't for their de facto government backstop. Jamie Dimon can provide a better return to shareholders by recognizing his bank is worth more in smaller pieces. [View news story]
geo
I would only quibble on one point and that is the Fed Government is what is TBTF not the FR. The FR is the last backstop behind all the downstream players doing stupid things and they are struggling with accommodating Congress and the President who are failing all of us.
With a record of poor shareholder returns, why do the TBTF banks (JPM, C, BAC) even exist, writes Sheila Bair. Capital markets certainly wouldn't finance such "unstable behemoths" if it weren't for their de facto government backstop. Jamie Dimon can provide a better return to shareholders by recognizing his bank is worth more in smaller pieces. [View news story]
Why are the paying into the FDIC then? This would be managed as well as SSA is today.
I would also venture that if you add up all the losses from small to medium sized banks in the past 40 years you will be looking at a big number and perhaps larger than a supposed TBTF.
With a record of poor shareholder returns, why do the TBTF banks (JPM, C, BAC) even exist, writes Sheila Bair. Capital markets certainly wouldn't finance such "unstable behemoths" if it weren't for their de facto government backstop. Jamie Dimon can provide a better return to shareholders by recognizing his bank is worth more in smaller pieces. [View news story]
WM
That is an ongoing discussion/arguement that has its pros and cons. My sense is that derivatives are the heart of the discussion and in my mind if they don't all go on an exchange with transparency then anyone who wants to play in deriviatives opaquely can do it outside of the banking system. We need transparency in these FI's.
Further discussion about separating banks from IB's has to realize that IB's traditionally borrowed a lot of their funds from the banks so the separation is not a chinese wall so to speak. Maybe the ultimate truth is that any risk behavior in the economy can ripple across other sectors and entities regardless of legal structures so the real issue is how do we manage risk?
Putting that aside I think big banks are necessary.
With a record of poor shareholder returns, why do the TBTF banks (JPM, C, BAC) even exist, writes Sheila Bair. Capital markets certainly wouldn't finance such "unstable behemoths" if it weren't for their de facto government backstop. Jamie Dimon can provide a better return to shareholders by recognizing his bank is worth more in smaller pieces. [View news story]
Is it fair to say that the two biggest disasters we have had in the past 40 years in the banking industry have been in real estate? The last one was a RE industry failure and the first one was due to S&L's having incongruent legislation dropped on them.
We don't see a lot if any large banks failing for their own individual reasons we typically see a wave of failures tied to a specific asset category.
So who has been the largest player in RE the past 70 to 80 years? Our fabulous federal government that is only trying to help us all and then they wonder why so much is now on their balance sheet. Please stop helping.
Catalan President Artur Mas appeals to Madrid for a rescue, saying his region (home to Barcelona) is running out of debt financing options. "We don't care how (Madrid helps), but we need to make payments at the end of the month." The euro falls to session lows at $1.2510. [View news story]
Rhianni
Exactly right. I had/have no idea what the context was for the comment as it is not related to the article.
Maybe there is some leap of logic that ties it together but I don't know why I have to guess.
In the face of a nasty Greek exit from the eurozone, investors have little choice now but to cling to low-yielding U.S. government debt, says Pimco's Bill Gross. Despite our own debt mess, a flight from risk assets is going to continue to send money into Treasurys. "It's what we call the cleanest dirty shirt," Gross says; "at the moment the cleanest dirty shirt is the United States." [View news story]
So you are saying we are the highest deck on the Titantic so will go down last? LOL.
Catalan President Artur Mas appeals to Madrid for a rescue, saying his region (home to Barcelona) is running out of debt financing options. "We don't care how (Madrid helps), but we need to make payments at the end of the month." The euro falls to session lows at $1.2510. [View news story]
In the face of a nasty Greek exit from the eurozone, investors have little choice now but to cling to low-yielding U.S. government debt, says Pimco's Bill Gross. Despite our own debt mess, a flight from risk assets is going to continue to send money into Treasurys. "It's what we call the cleanest dirty shirt," Gross says; "at the moment the cleanest dirty shirt is the United States." [View news story]
The flight to safety would probably be Switzerland, the US and Germany in that order don't you think?
Agree with you entirely. I believe WB was a paperboy at one time so perhaps this is a nostalgia trip. I also recall that classified ads were a huge part of newspapers revenues back in the day until Craig's List and eBay stomped that into the ground.
I would also add that we are overwhelmed with content on our PC's, phones and tablets coming from portals, blogs, journalists, writers, rabble rousers, focus groups, etc and it is all FREE. Newspapers are getting crowded out. The younger generation does not relate to a newspaper.
With a record of poor shareholder returns, why do the TBTF banks (JPM, C, BAC) even exist, writes Sheila Bair. Capital markets certainly wouldn't finance such "unstable behemoths" if it weren't for their de facto government backstop. Jamie Dimon can provide a better return to shareholders by recognizing his bank is worth more in smaller pieces. [View news story]
bernie
You are absolutely spot on. Other countries have huge banks and they help their economies function in the broader economy. And TBTF is really a smokescreen for the real issue which is when you have systemic failure of an industry like housing all banks will be hammered that participate. Small banks used real estate as their bread and butter and they got creamed. BofA bought CW which was absolutely stupid although the government was twisting their arm. JPM took on WAMU and the jury is still out on that acquisition. Wells Fargo was fine. Citi was the only really stupid large bank. AIG was an insurance company.
If we are going to carry out the TBTF logic then clearly our federal government is the worse offender as they are being bailed out by the Federal Reserve in keeping interest rates low to fund the debt. And what about GM and other large companies?
Sheila sees the world through a small bank prism because that is all she works with and she is likely miffed that the Federal Reserve really has oversight on the large banks and she is not a big player in that sphere. But she has done a pretty good job dealing with all the issues on her plate so she deserves credit for that.
Catalan President Artur Mas appeals to Madrid for a rescue, saying his region (home to Barcelona) is running out of debt financing options. "We don't care how (Madrid helps), but we need to make payments at the end of the month." The euro falls to session lows at $1.2510. [View news story]
In the face of a nasty Greek exit from the eurozone, investors have little choice now but to cling to low-yielding U.S. government debt, says Pimco's Bill Gross. Despite our own debt mess, a flight from risk assets is going to continue to send money into Treasurys. "It's what we call the cleanest dirty shirt," Gross says; "at the moment the cleanest dirty shirt is the United States." [View news story]
Greek exiting is a default of some sort and this will lead to an unravelling elsewhere. If Germany is the defacto bank we may see a run on the bank. This could be big and not much can be done about it as governments do not have the ability to deal with it and want to take actions to head it off. Votes are in spending rather than not spending.
In the face of a nasty Greek exit from the eurozone, investors have little choice now but to cling to low-yielding U.S. government debt, says Pimco's Bill Gross. Despite our own debt mess, a flight from risk assets is going to continue to send money into Treasurys. "It's what we call the cleanest dirty shirt," Gross says; "at the moment the cleanest dirty shirt is the United States." [View news story]
SEC staff will not recommend any enforcement action against Lehman or any of its former executives after completing a probe of possible financial fraud there, reports Bloomberg. "Repo 105 is magical," tweets Josh Brown, "It makes losses disappear long enough to file a 10Q, then they come back until the next Q is due." [View news story]
Reminds me of the paradigm in the 1930's that Nazism was the opposite of Communism which was really bad so therefore Nazism was good or better. Tens of millions of dead later we realize both were bad and it all happened right under our noses.
Reps and Dems are not that different in real terms. Rhetoric is different I suppose but actions and results are the same.
SEC staff will not recommend any enforcement action against Lehman or any of its former executives after completing a probe of possible financial fraud there, reports Bloomberg. "Repo 105 is magical," tweets Josh Brown, "It makes losses disappear long enough to file a 10Q, then they come back until the next Q is due." [View news story]
I seem to recall claims in the last election that Bush's SEC was corrupt and wasn't doing anything about these massive failures like Lehman and Bear.
So what has changed? Either that was just election trash talk or someone did not know what they were talking about.
With a record of poor shareholder returns, why do the TBTF banks (JPM, C, BAC) even exist, writes Sheila Bair. Capital markets certainly wouldn't finance such "unstable behemoths" if it weren't for their de facto government backstop. Jamie Dimon can provide a better return to shareholders by recognizing his bank is worth more in smaller pieces. [View news story]
I would only quibble on one point and that is the Fed Government is what is TBTF not the FR. The FR is the last backstop behind all the downstream players doing stupid things and they are struggling with accommodating Congress and the President who are failing all of us.
With a record of poor shareholder returns, why do the TBTF banks (JPM, C, BAC) even exist, writes Sheila Bair. Capital markets certainly wouldn't finance such "unstable behemoths" if it weren't for their de facto government backstop. Jamie Dimon can provide a better return to shareholders by recognizing his bank is worth more in smaller pieces. [View news story]
I would also venture that if you add up all the losses from small to medium sized banks in the past 40 years you will be looking at a big number and perhaps larger than a supposed TBTF.
With a record of poor shareholder returns, why do the TBTF banks (JPM, C, BAC) even exist, writes Sheila Bair. Capital markets certainly wouldn't finance such "unstable behemoths" if it weren't for their de facto government backstop. Jamie Dimon can provide a better return to shareholders by recognizing his bank is worth more in smaller pieces. [View news story]
That is an ongoing discussion/arguement that has its pros and cons. My sense is that derivatives are the heart of the discussion and in my mind if they don't all go on an exchange with transparency then anyone who wants to play in deriviatives opaquely can do it outside of the banking system. We need transparency in these FI's.
Further discussion about separating banks from IB's has to realize that IB's traditionally borrowed a lot of their funds from the banks so the separation is not a chinese wall so to speak. Maybe the ultimate truth is that any risk behavior in the economy can ripple across other sectors and entities regardless of legal structures so the real issue is how do we manage risk?
Putting that aside I think big banks are necessary.
With a record of poor shareholder returns, why do the TBTF banks (JPM, C, BAC) even exist, writes Sheila Bair. Capital markets certainly wouldn't finance such "unstable behemoths" if it weren't for their de facto government backstop. Jamie Dimon can provide a better return to shareholders by recognizing his bank is worth more in smaller pieces. [View news story]
We don't see a lot if any large banks failing for their own individual reasons we typically see a wave of failures tied to a specific asset category.
So who has been the largest player in RE the past 70 to 80 years? Our fabulous federal government that is only trying to help us all and then they wonder why so much is now on their balance sheet. Please stop helping.
Catalan President Artur Mas appeals to Madrid for a rescue, saying his region (home to Barcelona) is running out of debt financing options. "We don't care how (Madrid helps), but we need to make payments at the end of the month." The euro falls to session lows at $1.2510. [View news story]
Exactly right. I had/have no idea what the context was for the comment as it is not related to the article.
Maybe there is some leap of logic that ties it together but I don't know why I have to guess.
In the face of a nasty Greek exit from the eurozone, investors have little choice now but to cling to low-yielding U.S. government debt, says Pimco's Bill Gross. Despite our own debt mess, a flight from risk assets is going to continue to send money into Treasurys. "It's what we call the cleanest dirty shirt," Gross says; "at the moment the cleanest dirty shirt is the United States." [View news story]
Catalan President Artur Mas appeals to Madrid for a rescue, saying his region (home to Barcelona) is running out of debt financing options. "We don't care how (Madrid helps), but we need to make payments at the end of the month." The euro falls to session lows at $1.2510. [View news story]
That was from left field. What do you mean?
In the face of a nasty Greek exit from the eurozone, investors have little choice now but to cling to low-yielding U.S. government debt, says Pimco's Bill Gross. Despite our own debt mess, a flight from risk assets is going to continue to send money into Treasurys. "It's what we call the cleanest dirty shirt," Gross says; "at the moment the cleanest dirty shirt is the United States." [View news story]
Buffett Is Wrong About Free News [View article]
Agree with you entirely. I believe WB was a paperboy at one time so perhaps this is a nostalgia trip. I also recall that classified ads were a huge part of newspapers revenues back in the day until Craig's List and eBay stomped that into the ground.
I would also add that we are overwhelmed with content on our PC's, phones and tablets coming from portals, blogs, journalists, writers, rabble rousers, focus groups, etc and it is all FREE. Newspapers are getting crowded out. The younger generation does not relate to a newspaper.
You might say newspapers are yesterday's news!!!
With a record of poor shareholder returns, why do the TBTF banks (JPM, C, BAC) even exist, writes Sheila Bair. Capital markets certainly wouldn't finance such "unstable behemoths" if it weren't for their de facto government backstop. Jamie Dimon can provide a better return to shareholders by recognizing his bank is worth more in smaller pieces. [View news story]
You are absolutely spot on. Other countries have huge banks and they help their economies function in the broader economy. And TBTF is really a smokescreen for the real issue which is when you have systemic failure of an industry like housing all banks will be hammered that participate. Small banks used real estate as their bread and butter and they got creamed. BofA bought CW which was absolutely stupid although the government was twisting their arm. JPM took on WAMU and the jury is still out on that acquisition. Wells Fargo was fine. Citi was the only really stupid large bank. AIG was an insurance company.
If we are going to carry out the TBTF logic then clearly our federal government is the worse offender as they are being bailed out by the Federal Reserve in keeping interest rates low to fund the debt. And what about GM and other large companies?
Sheila sees the world through a small bank prism because that is all she works with and she is likely miffed that the Federal Reserve really has oversight on the large banks and she is not a big player in that sphere. But she has done a pretty good job dealing with all the issues on her plate so she deserves credit for that.
Catalan President Artur Mas appeals to Madrid for a rescue, saying his region (home to Barcelona) is running out of debt financing options. "We don't care how (Madrid helps), but we need to make payments at the end of the month." The euro falls to session lows at $1.2510. [View news story]
In the face of a nasty Greek exit from the eurozone, investors have little choice now but to cling to low-yielding U.S. government debt, says Pimco's Bill Gross. Despite our own debt mess, a flight from risk assets is going to continue to send money into Treasurys. "It's what we call the cleanest dirty shirt," Gross says; "at the moment the cleanest dirty shirt is the United States." [View news story]
Ugly!
In the face of a nasty Greek exit from the eurozone, investors have little choice now but to cling to low-yielding U.S. government debt, says Pimco's Bill Gross. Despite our own debt mess, a flight from risk assets is going to continue to send money into Treasurys. "It's what we call the cleanest dirty shirt," Gross says; "at the moment the cleanest dirty shirt is the United States." [View news story]
Excess debt is the culprit and that is global.
SEC staff will not recommend any enforcement action against Lehman or any of its former executives after completing a probe of possible financial fraud there, reports Bloomberg. "Repo 105 is magical," tweets Josh Brown, "It makes losses disappear long enough to file a 10Q, then they come back until the next Q is due." [View news story]
Reps and Dems are not that different in real terms. Rhetoric is different I suppose but actions and results are the same.
SEC staff will not recommend any enforcement action against Lehman or any of its former executives after completing a probe of possible financial fraud there, reports Bloomberg. "Repo 105 is magical," tweets Josh Brown, "It makes losses disappear long enough to file a 10Q, then they come back until the next Q is due." [View news story]
So what has changed? Either that was just election trash talk or someone did not know what they were talking about.