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2012-05-16 Home Front: Politix

President Obama, The View, And The False Notion Of Too Big To Fail

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Posted by tipper 2012-05-16 03:11|| || Front Page|| [1 views ] Top

#1
So now Im wondering because I watched this JP Morgan Chase thing just go down. Im wondering (A) what do you think happened and (B) sir what are you going to do about it because this has to be the last straw.

Clearly highlights this fattened rhino's understanding of the market and investing. Better she had said nothing at all.

Posted by Besoeker 2012-05-16 08:57|| 2012-05-16 08:57|| Front Page Top

#2 "Better she said nothing at all." Actually "nothing" is better than what any of those ladies on The View ever have to say.
However, the gist of the article is worth looking at. The news of JP Morgans loss has reignited the discussion over whether the financial sector is regulated enough. The answer is that regulation and the moral hazard-ridden business environment it produces is the sole reason why a banks loss is a hot topic of discussion to begin with. Without the Fed, the FDIC, and the governments nasty history of bailing out its top campaign contributors, JP Morgan would be just another bank beholden to market forces. Instead it, along with most of Wall Street, has become, to use former Kansas City Fed President Thomas Hoenigs label, a virtual public utility.

Take away the implied safety net and too big to fail disappears. Its as simple that.
The POV of the article itself is simplistically anti-any-and-all-regulation.
Take away the FDIC, and I (and many other savers) take all my money out of banks. Capisce? Apparently, not the author of this reductio ad absurdum. Author is blissfully unaware of the fact that when FDR first took office, US banks had essentially closed their doors.
Banks ARE public utilities, that's why they have been regulated for almost 200 years. Recently the big banks and Vampire Squids have been running the biggest gambling operation and organized crime ring in world history. The article completely misses that point.

Posted by Anguper Hupomosing9418 2012-05-16 14:41|| 2012-05-16 14:41|| Front Page Top

#3 But then there are truly crazy ideas, like this one from a comment on this article in ZeroHedge:
"Any of the TBTF/TBTB banks that received Federal assistance in the period of 2008 - today would have their FDIC coverage removed effectice September 1, 2012. Any money in any account in any of those banks would no longer qualify for compensation of the account holder by the FDIC. Period.

Anyone wanting their money to be FDIC insured would have to move it into a bank that still qualififed (i.e. has never been bailed out by the government)."
This would most likely induce a run on the banks about to lose their FDIC protection, and put them into bankruptcy in short order.

Posted by Anguper Hupomosing9418 2012-05-16 14:48|| 2012-05-16 14:48|| Front Page Top

#4 The economist Bill Black recently had the following to say about the TBTF banks and the disingenuous Jamie Dimon:
All of the systemically dangerous institutions failed [since 2008] in large part because of these financial derivatives - what we call the green slime. That's what brought down Fannie and Freddie and Lehman Brothers and Bear Stearns and Washington Mutual, Lehman, Merrill Lynch and Wachovia. After those catastrophic disasters that caused the Great Recession, cost six billion [sic] Americans their jobs directly, prevented another five to eight million jobs from being created, helped lead to a global crisis called the Great Recessionafter that, the banks still fought to be allowed to do exactly the same kind of derivative trades [that largely caused the current Recession]. And even when the Volcker Rule was adopted, over the banks' opposition and over the opposition of the Federal Reserve and of Treasury Secretary Timothy Geithner, they gutted the ruleat least the draft rule to implement the Volcker Rule. Unless it is changed, the Volcker Rule will be essentially unenforceable, because the current draft allows financial institutions to simply call their trades "hedges", even though they operate exactly opposite to the way a hedge would work.
Bill Black will never appear on "The View". He is not simple-minded enough to appeal to the constituency of "The View".

Posted by Anguper Hupomosing9418 2012-05-16 15:13|| 2012-05-16 15:13|| Front Page Top

#5 With some luck perhaps both Obama and The View will fail.

Posted by JohnQC 2012-05-16 16:30|| 2012-05-16 16:30|| Front Page Top

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