Glass-Steagal Lite

The rating agencies fucked up but they didn't commit fraud.. Originally Posted by lustylad

The story has not be finalized on that point.

http://dealbook.nytimes.com/2013/11/...rns-case/?_r=0
Suit Charges 3 Credit Ratings Agencies With Fraud in Bear Stearns Case..
...
During the housing boom, S.&P., Fitch and Moody’s made millions of dollars by issuing ratings on the complex pools of home loans being packaged and sold by the banks. These pools, called residential mortgage-backed securities and collateralized debt obligations, collapsed in value when the financial crisis struck.
A report by the Financial Crisis Inquiry Commission concluded that the credit ratings firms were “key enablers of the financial meltdown.”

The judge, David O. Carter of Federal District Court in Los Angeles, asked, “If no investor believed in S.&P.’s objectivity, and every bank had access to the same information and models as S.&P., is S.&P. asserting, as a matter of law, the company’s credit ratings service added absolutely zero material value as a predictor of creditworthiness?”

Prices for many securities diverge from economic reality but recover again when markets calm. Originally Posted by lustylad

Markets calmed because of government intervention...a moral hazard. Something you haven't admitted. Or seem to understand.

Hey dumbfuck, learn the difference between plural and possessive, ok? Your sloppy grammar and constant misspellings are grating on my nerves.

.. Originally Posted by lustylad

Let me know when you want to come to Houston and do something about that. I'll pick you up at the airport.

Evidently you have no concept of moral hazard Originally Posted by WTF

I know all about it, fuckhead. Letting a reckless leveraged player like Lehman go under is a good lesson in moral hazard. Letting everyone including the healthy collapse in a systemic panic is not good for anyone.

Nothing in your latest copy-paste job should raise an eyebrow. When interbank lending dries up, banks either borrow from the Fed or sell securities to trim their balance sheets each day. It's not attractive to sell securities into a depressed market, so of course the banks turned to the Fed for temporary liquidity during the meltdown. Much of this Fed support was in the form of overnight loans either repaid or rolled over the next day.

Quote from your link:

"U.S. taxpayers, it should be noted, lost nothing on the secret Fed loans. Instead, according to Bloomberg, the Fed made money."

So let's recap so far: You started this debate with the silly libtard talking point “Big banking has gotten away with... stiffing the public with their losses.” I challenged you to come up with one – just one – big bank that actually stiffed the public. You then refuted your own talking point by posting a link wherein Bloomberg confirms US taxpayers lost nothing to the big banks during the crisis. Nothing – as in nada, zip, zilch, zero.

Good job, WTF! Do you always shoot yourself in the foot, dumbass?

I know all about it, fuckhead. Letting a reckless leveraged player like Lehman go under is a good lesson in moral hazard. Letting everyone including the healthy collapse in a systemic panic is not good for anyone. Lehman was not a lesson in "To Big To Fail''...it was a lesson in not being big enough. You still do not understand moral hazard. It is supposed to apply to all. Not who the government picks and chooses. Kinda like GM...not much difference between them and the banks. Do you agree with the auto bailout?

Nothing in your latest copy-paste job should raise an eyebrow. When interbank lending dries up, banks either borrow from the Fed or sell securities to trim their balance sheets each day. It's not attractive to sell securities into a depressed market, so of course the banks turned to the Fed for temporary liquidity during the meltdown. Much of this Fed support was in the form of overnight loans either repaid or rolled over the next day.

Quote from your link:

"U.S. taxpayers, it should be noted, lost nothing on the secret Fed loans. Instead, according to Bloomberg, the Fed made money."

So let's recap so far: You started this debate with the silly libtard talking point “Big banking has gotten away with... stiffing the public with their losses.” I challenged you to come up with one – just one – big bank that actually stiffed the public. You then refuted your own talking point by posting a link wherein Bloomberg confirms US taxpayers lost nothing to the big banks during the crisis. Nothing – as in nada, zip, zilch, zero.

Good job, WTF! Do you always shoot yourself in the foot, dumbass? Originally Posted by lustylad

At least three conclusions are apparent.
First, what sustained the viability of America's financial system during the Crash of '08 was a total lack of transparency as to how the liquidity was being funded. Several of our ten largest financial institutions (as well as several in Europe) were illiquid for extended periods of time and would have failed, but for the secret, low interest government loans.
Second, the secret Fed lending (as well as the disclosed Treasury loans, like TARP) completely eliminated moral hazard (i.e, risk and the potential losses resulting from bad decisions) for the major players (except for Lehman Brothers and Bear Stearns) in the U.S. financial marketplace. In other words: our largest financial institutions really are too-big-to fail. By acting as lender-of-last-resort, the Fed allowed the big Wall Street firms to avoid the financial consequences of their actions.
U.S. taxpayers, it should be noted, lost nothing on the secret Fed loans. Instead, according to Bloomberg, the Fed made money.
Third -- and most importantly for the future, essentially nothing has been done to correct or eliminate the conditions which would allow a reoccurrence of the Crash of '08 -- despite the 2500 pages of the Dodd-Frank Act..


Read more: http://www.americanthinker.com/2011/...#ixzz2nbzkLK7W

.

Quote from your link:

"U.S. taxpayers, it should be noted, lost nothing on the secret Fed loans. Instead, according to Bloomberg, the Fed made money."
? Originally Posted by lustylad

Let me explain moral hazard in childish terms just for you.

If your bratty little bastard child breaks a window and you pay for the window and you have to borrow money from say your whore sister. You pay her back after blowing three queers. You defend your bastard child from being punished. You tell us that nobody lost any money. What lesson has you bastard child learnt?

He then sets fire to the building , you and your sister can not blow enough dicks to pay for the building. Who pays for that building being rebuilt?

Moral Hazard, dickhead. Learn WTF that means. It does not mean that little bastard children get off scott free because their Daddy is a ignorant SOB or a slick talking government connect investment banker.

Here is a thought...WTF should be done is to break up banks into smaller pieces so that when they fuck up...they fail! Shareholders/depositorsmight not then make these risky 'investments' knowing that the government will not bail them out.

Third -- and most importantly for the future, essentially nothing has been done to correct or eliminate the conditions which would allow a reoccurrence of the Crash of '08 -- despite the 2500 pages of the Dodd-Frank Act..


Read more: http://www.americanthinker.com/2011/...#ixzz2nbzkLK7W Originally Posted by WTF

repeat...is the Volcker rule a start?

Let me explain moral hazard in childish terms just for you... You tell us that nobody lost any money... Originally Posted by WTF

CORRECTION: Bloomberg told us that nobody lost any money. You told us the public lost money. Who's right on that one again?


Here's the only definition of moral hazzard WTF is capable of understanding:

"Moral" = more oral sex.
"Hazzard" = where Daisy Dukes lives.
"Moral Hazzard" = more oral sex with Daisy.

That works for most of us. WTFagboy just needs to substitute "Bo and Luke" for "Daisy".

repeat...is the Volcker rule a start? Originally Posted by WTF

It can be if correctly implemented, but it needs to be stronger.

It can be if correctly implemented, but it needs to be stronger.
Originally Posted by I B Hankering

agreed. ..but that that is a big 'but'.

The problem with disregarding moral hazard is that first you make the banks whole...then the autos...then farmers. What dumb fucks like lustylad fail to understand is just that. What happens when they do not pay it back? Let big banks swim without a lifejacket like the rest of us. That dumb bastard defends bankers that in actuality are not playing by the same rules that small business do all the time.

CORRECTION: Bloomberg told us that nobody lost any money. You told us the public lost money. Who's right on that one again?
Originally Posted by lustylad

We all lose when business is not allowed to fail. If it is to big to fail....then it is to big. We should have stronger anti-trust laws not weaker. Can you not see the big picture? What kind of free market asshole are you that argues that to big to fail is a good thing? Because wtf you are arguing is that you need to become so large...that the taxpayers will not let you fail. WE will build tanks we do not need, we will pay farmers not to plant crops, we will bail out the auto's and we will bail out the banks when they make risky bets. That is how the public is losing money. Because not just banks are 'to big to fail' and if you have done so for banks, why not any and every industry leader when they get in trouble?

Here is a thought...WTF should be done is to break up banks into smaller pieces so that when they fuck up...they fail! Shareholders/depositorsmight not then make these risky 'investments' knowing that the government will not bail them out. Originally Posted by WTF

FDIC insurance should not be available for deposits at institutions that do both retail consumer banking and investment banking.

A local bank does not rebundle your loan. Therefore there primary concern is not to just get the upfront money but to make sure the consumer can service the loan for the long-term.

lustlad thinks that fraud is the correct way one should conduct banking. All Countywide and others were doing was trying to get no doc loan and their upfront money.

Let big banks swim without a lifejacket like the rest of us. That dumb bastard defends bankers that in actuality are not playing by the same rules that small business do all the time. Originally Posted by WTF

Recent US bank failures by year:

2008 - 25
2009 - 140
2010 - 157
2011 - 92
2012 – 51

FDIC insurance should not be available for deposits at institutions that do both retail consumer banking and investment banking. Originally Posted by Submodo

+1