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]
Tomas,
I see what you're saying but I don't agree that a particular investment sector (e.g. real estate) is going to have evenly spread risk. We saw exactly this in 2007-9, where some banks had really let risk get out of hand (Wamu, e.g.) while others such as JPM and BAC had mostly avoided that risk. (BAC jumped into Countrywide near the end, but had the good sense to stay away before then).
The FDIC works. You keep saying insurance can't work but the fact is FDIC works well. Even with the meltdown, FDIC avoided taxpayer losses and was able to unwind the smaller banks that were in its purview. If we'd had a similar pool for TBTF, it's entirely plausible that TARP could have been mostly avoided and the unwinding wouldn't have needed to involve increasing the size and therefore the political influence of the largest banks and the distribution of taxpayer money as bonuses to those who helped crash the system. AIG would still have been a problem, because it's not a bank, so this isn't a perfect solution but it's still a more appropriate allocation of responsibility.
I also disagree that it was real estate that crashed the financial system. Financial instruments, derivatives, with unlimited leverage are what crashed the financial system.
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]
Thomas, you're skirting the point, which is that when a bank becomes so large that its risk-taking can fracture the entire economic fabric, it makes sense to insure against that event. You want tax payers to pay for clean up out of the general fund yet you also want them to have no say-so in the risk (zero regulations). I prefer that the banks have some skin in the game, that the TBTF banks either pay for their own insurance or be broken into smaller entities, and I also have some regulatory thoughts but that's a different topic.
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]
Ok, you're right. I didn't click through.
Here's what wikipedia says about Poland's economy: "The Economy of Poland is a high income economy and is the sixth largest in the EU and one of the fastest growing economies in Europe, with a yearly growth rate of over 3.0%.... It is the only member country of the European Union to have avoided a decline in GDP, meaning that in 2009 Poland has created the most GDP growth in the EU. As of December 2009 the Polish economy had not entered recession nor contracted. According to the Central Statistical Office of Poland, In 2010 the Polish economic growth rate was 3.9 %, which was one of the best results in Europe."
That doesn't sound particularly bad to me. South Africa's economy has a fair bit of strain on it though so I'm not sure why they're so close. Israel, Russia, and Austria are also at about the same point -- all healthy economies. Troubled economies such as Ireland, Spain, Portugal, and Italy (not even counting Greece) have CDS spreads 2-6X higher. California's not even close to being in distressed territory and the bond market agrees (as PCQ's chart makes clear). Looks like your urgent need to smear California is causing you to smear Poland, Israel, and Austria without even checking first to see if that makes sense.
Central bankers are keeping it low-key for now, writes Saxo Bank's Steen Jakobsen, but they're surely realizing they've fallen behind the curve. China is slowing precipitously, the rest of Asia is suffering from a cutoff in credit as EU banks pull back, and, of course, there's Europe. The central banks aren't going to sit on their hands forever. He's buying GLD, GDX, and HYG. [View news story]
National debt can't be monetized. That's just another popular misconception. U.S. obligations are inflation linked as are pretty much all national obligations.
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]
You haven't explained in what way your unsubstantiated assertions prove that California is asking the federal gov't for a bailout. You're just throwing out a bunch of insults that may or may not have any basis in fact and that, as far as I can see, are irrelevant to the subject of bailouts.
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]
Angel, I'm not that young but to me 1992 doesn't feel like it's within "the past few years". If it does to you, you might want to update your profile photo :-)
You're looking at CDS data from 2010 instead of 2012. You need to show something more relevant. Everyone was all a-flutter over Meredith Whitney's predictions in 2010. Predictions that turned out to be completely wrong. Incidentally, thanks for the reminder...I made a nice profit off of the panic from Whitney's predictions by buying PCQ in December 2010.
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]
eabyrd, the state was the plaintiff in that case, not the homeowners. Homeowners can also sue on their own behalf and some have done so. Personally I would not want the state to represent me in such a case. You may like the idea of the state doing everything for you but if I were one of these homeowners, I'd prefer to represent myself and to negotiate my own settlement.
My post was a reply to a false claim that California is looking for a federal bailout. All the other stuff you're opining about is just that -- other stuff. If I wanted to do what you're doing, I could claim all sorts of random things too. For example I could claim that Texans are angry racists. But whether that's true or not (and I'm not claiming that it is true, just giving an example of what you're doing), it wouldn't change the fact that the claim I replied to was untrue.
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]
Thomas, the whole reason for the insurance pool was to AVOID gov't intervention and to get the banks to bear some of the responsibility rather than pushing it all off onto taxpayers.
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]
eaybyrd, you've posted many opinions and unsubstantiated assertions (which is not the same as a fact) but not one of them demonstrates California asking for a federal bailout. You falsely claimed to have found a story in the LA Times that did but of course that was again, untrue. I posted a correction to someone else's falsehood and you jump in to make personal attacks against me and to accuse me of everything you can think of. Why? As a distraction? As for the story that shows Texas *actually* doing what you (and many others) falsely *accuse* California of doing, I do enjoy demonstrating that many of the things people think they know, just ain't so. That story does that quite well.
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]
The TBTF pool was to insure against bank failures. By definition, if a bank wasn't paying into the pool, it wouldn't get that insurance and if it was paying into the pool and it failed, that insurance would be used to stabilize it while it was being sold off. Same as with FDIC. We have empirical evidence that FDIC works well.
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]
Your accusation that I was calling California a shining light on a hill was BEFORE I posted the link to debt as pct of GSP. Why are you so unwilling to be honest about that?
"But CA isn't okay simply because of their debt ratios, bailout requests or lack thereof, or other data points that may or may not be accurate"
Indeed, you've made very clear that facts don't matter to you.
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]
eabyrd, what I said, word for word, was, "California isn't asking for a bailout from the federal gov't". That is what you described as calling "California a shining light on a hill". Now you're saying I'm not to be permitted to point out the untruth in any claims made about California but anyone making untrue claims about California is to be applauded? That's ridiculous. Are you seriously telling us that your ideology requires that lies be defended and truth be suppressed?
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]
Rhianni32, where did I say you cannot read? I do agree that S.A. too often dramatizes headlines and also uses headlines (and summaries) that mislead.
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]
Thomas, Why do you consider it goofy to mention that there was in fact proposed legislation to let banks, rather than taxpayers, be the ones to insure against damage from a TBTF bank failure in the context of a post about how to prevent damage from a TBTF bank failure?
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]
moneyTalks, I'm only correcting falsehoods. Why does that bother you so much?
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 see what you're saying but I don't agree that a particular investment sector (e.g. real estate) is going to have evenly spread risk. We saw exactly this in 2007-9, where some banks had really let risk get out of hand (Wamu, e.g.) while others such as JPM and BAC had mostly avoided that risk. (BAC jumped into Countrywide near the end, but had the good sense to stay away before then).
The FDIC works. You keep saying insurance can't work but the fact is FDIC works well. Even with the meltdown, FDIC avoided taxpayer losses and was able to unwind the smaller banks that were in its purview. If we'd had a similar pool for TBTF, it's entirely plausible that TARP could have been mostly avoided and the unwinding wouldn't have needed to involve increasing the size and therefore the political influence of the largest banks and the distribution of taxpayer money as bonuses to those who helped crash the system. AIG would still have been a problem, because it's not a bank, so this isn't a perfect solution but it's still a more appropriate allocation of responsibility.
I also disagree that it was real estate that crashed the financial system. Financial instruments, derivatives, with unlimited leverage are what crashed the financial system.
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]
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]
Here's what wikipedia says about Poland's economy:
"The Economy of Poland is a high income economy and is the sixth largest in the EU and one of the fastest growing economies in Europe, with a yearly growth rate of over 3.0%.... It is the only member country of the European Union to have avoided a decline in GDP, meaning that in 2009 Poland has created the most GDP growth in the EU. As of December 2009 the Polish economy had not entered recession nor contracted. According to the Central Statistical Office of Poland, In 2010 the Polish economic growth rate was 3.9 %, which was one of the best results in Europe."
That doesn't sound particularly bad to me. South Africa's economy has a fair bit of strain on it though so I'm not sure why they're so close. Israel, Russia, and Austria are also at about the same point -- all healthy economies. Troubled economies such as Ireland, Spain, Portugal, and Italy (not even counting Greece) have CDS spreads 2-6X higher. California's not even close to being in distressed territory and the bond market agrees (as PCQ's chart makes clear). Looks like your urgent need to smear California is causing you to smear Poland, Israel, and Austria without even checking first to see if that makes sense.
Central bankers are keeping it low-key for now, writes Saxo Bank's Steen Jakobsen, but they're surely realizing they've fallen behind the curve. China is slowing precipitously, the rest of Asia is suffering from a cutoff in credit as EU banks pull back, and, of course, there's Europe. The central banks aren't going to sit on their hands forever. He's buying GLD, GDX, and HYG. [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]
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]
You're looking at CDS data from 2010 instead of 2012. You need to show something more relevant. Everyone was all a-flutter over Meredith Whitney's predictions in 2010. Predictions that turned out to be completely wrong. Incidentally, thanks for the reminder...I made a nice profit off of the panic from Whitney's predictions by buying PCQ in December 2010.
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]
My post was a reply to a false claim that California is looking for a federal bailout. All the other stuff you're opining about is just that -- other stuff. If I wanted to do what you're doing, I could claim all sorts of random things too. For example I could claim that Texans are angry racists. But whether that's true or not (and I'm not claiming that it is true, just giving an example of what you're doing), it wouldn't change the fact that the claim I replied to was untrue.
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]
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]
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]
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]
"But CA isn't okay simply because of their debt ratios, bailout requests or lack thereof, or other data points that may or may not be accurate"
Indeed, you've made very clear that facts don't matter to you.
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]
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]
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]
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]