Too big to fail...

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Upsetter
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Joined: Mon Jan 12, 2009 1:53 pm

Too big to fail...

Post by Upsetter » Tue Jan 05, 2010 8:45 pm

...go fuck yourself, we'll dismantle your ass. How about this for an issue both sides of the aisle seem to be in agreement on? I heard a long panel discussion about this issue on Bloomberg news saturday morning, each economist/expert stated unequivocally that the traditional side (commercial banking - loans/accounts) of the big banks should be separate from the gambling side (stocks, bonds, derivatives, trading, etc.). What say yall?
The anger at the nation’s financial behemoths is taking shape in a variety of ways, most notably in a bill from Sens. Maria Cantwell (D-Wash.) and John McCain (R-Ariz.), who are targeting big financial institutions such as JPMorgan Chase and Citigroup.


The bipartisan duo’s bill would reinstate the Depression-era law that built a wall between commercial banking and the riskier activities of investment banking. The separation — originally set up in the Glass-Steagall Act — was repealed in 1999.



Read more: http://www.politico.com/news/stories/01 ... z0bnOObmai
Im for it, completely. I also want all speculation in derivatives to be regulated on transparent exchanges where every player must be registered to play. No more of this backroom shit, ridiculous leveraging, opaque balance sheets, not to mention shitloads of off-balance sheet exposure. Im fine with exceptions for true hedgers, actual buyers/sellers in whatever commodity market, but the speculators from wall street have to come clean about who they are. That seems to be happening too. Let's hope it is a reform with some teeth for this 600 trillion dollar global financial clusterfuck.
Buy-side supporters of the regulatory proposals argue that transparency will level the playing field for asset managers and proprietary-trading firms that use the custom contracts to hedge their exposures or speculate on the movement of oil prices, interest rates or currencies. "Any time you can standardize contracts and have them go to a clearing house where you remove counterparty exposure and you're able to collect more information for the marketplace about how they work, that is a better alternative for investors," comments Basil Williams, CEO of Concordia Advisors, an international multistrategy hedge fund in New York.

http://www.advancedtrading.com/derivati ... =222001753

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BigCliff
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Re: Too big to fail...

Post by BigCliff » Wed Jan 06, 2010 10:35 am

Upsetter wrote: the traditional side (commercial banking - loans/accounts) of the big banks should be separate from the gambling side (stocks, bonds, derivatives, trading, etc.). What say yall?
Agreed, but while "too big to fail" is the going phrase, "too big to fuck around" seems more apt. While reinstating Glass-Stegall would greatly reduce the chances of these mega-banks being able to put themselves in such a shitty situation, it wouldn't really reduce their size all that much.

If we're really going to talk about putting something in place that keeps them from being "too big to fail", that seems to me like it would be more like the Bell/Standard Oil break-ups of decades ago. I don't know enough about the ramifications of such a move to call it good or bad, but it would seem to fit the anti-"too big to fail" movement better.
Buy better hooks and bourbon.

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Upsetter
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Re: Too big to fail...

Post by Upsetter » Thu Jan 07, 2010 3:23 pm

BigCliff wrote:Agreed, but while "too big to fail" is the going phrase, "too big to fuck around" seems more apt. While reinstating Glass-Stegall would greatly reduce the chances of these mega-banks being able to put themselves in such a shitty situation, it wouldn't really reduce their size all that much.

If we're really going to talk about putting something in place that keeps them from being "too big to fail", that seems to me like it would be more like the Bell/Standard Oil break-ups of decades ago. I don't know enough about the ramifications of such a move to call it good or bad, but it would seem to fit the anti-"too big to fail" movement better.
The pure ibanks, no, but an entities like citigroup, BoA, or AIG, it would bust apart into several smaller peices. I think goldman needs special treatment, for they are an animal like no other. Your second pp has happened, several times, throughout the past few decades, mostly in the utility industries. It can be done elsewhere, such as auto or retail, but it is a very slippery slope. Reversing the tide of industry consolidation, which was fueled in large part by wholesale outsourcing, could be a very costly endeavor, both to us and our main creditor.

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