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Thread: Bank of America Confirms 30,000 Layoffs

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    Re: Bank of America Confirms 30,000 Layoffs

    Quote Originally Posted by AdamT View Post
    Also let's keep in mind that too-big-to-fail was and still is a huge problem. That some of the big banks are getting smaller isn't a sign that efforts to address the problem failed.
    If you come from the standpoint that too big to fail banks bit off more than they could chew and that a large part of their problem stemmed from acquiring too much property, i.e., opening too many branches they couldn't afford to operate, I'd agree with you. But that would assume they simply made bad commercial property or marketing investments. That's NOT how these big investment firms got into trouble.

    Their "income" strategy had far more to do with creating lucrative derivities and commercial papers than it did purchasing commercial assets. So, let's keep things in perspective.

    Yes, the bailouts helped them to straighten out their balance sheets to a degree, but had they injected ALL of their bailout funds onto their balance sheets instead of paying out bonuses, they'd be alot more liquid today and would likely have to close fewer branch offices, thereby, laying off fewer workers. It's likely they still would have had to do one or the other or both, but I don't think they'd be anywhere near the 30,000 employee mark.

    Again, look at the amount of bonus money they paid out. It's un-godly!
    Last edited by Objective Voice; 09-13-11 at 03:24 PM.

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    Re: Bank of America Confirms 30,000 Layoffs

    Quote Originally Posted by Objective Voice View Post
    If you come from the standpoint that too big to fail banks bit off more than they could chew and that a large part of their problem stemmed from acquiring too much property, i.e., opening too many branches they couldn't afford to operate, I'd agree with you. But that would assume they simply made bad commercial property or marketing investments. That's NOT how these big investment firms got into trouble.

    Their "income" strategy had far more to do with creating lucrative derivities and commercial papers than it did purchasing commercial assets. So, let's keep things in perspective.

    Yes, the bailouts helped them to straighten out their balance sheets to a degree, but had they injected ALL of their bailout funds onto their balance sheets instead of paying out bonuses, they'd be alot more liquid today and would likely have to close fewer branch offices, thereby, laying off fewer workers. It's likely they still would have had to do one or the other or both, but I don't think they'd be anywhere near the 30,000 employee mark.

    Again, look at the amount of bonus money they paid out. It's un-godly!
    I totally agree with that. It's astonishing that these companies are handing out gargantuan bonuses, apparently to reward management for running the business so badly that it nearly broke the entire world's economy.

    BOA's real problem was its acquisition of Countrywide. Were it not for that it would be solid.

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    Re: Bank of America Confirms 30,000 Layoffs

    Quote Originally Posted by AdamT View Post
    Not sure where I lost you. The OP's point seems to be that the bank bailouts were a failure because BOA is cutting its workforce. My point is that the bailouts did not fail because a big bank like BOA is getting smaller and less opaque.
    OK, was not sure. I would agree with you.

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    Re: Bank of America Confirms 30,000 Layoffs

    very large companies with the potential for widespread negative impact in the event of failure should be held to a higher regulatory standard.

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    Re: Bank of America Confirms 30,000 Layoffs

    Quote Originally Posted by Helix View Post
    very large companies with the potential for widespread negative impact in the event of failure should be held to a higher regulatory standard.
    They already were. The Fed under Greenspan and then Bernanke and the New York Fed ( Geithner) did a lousy job enforcing the regulations already on the books. In addition the SEC did a bad job as well as the state insurance regulators (AIG). It was not that we got rid of regulations as many say or there was not enough authority, it was the quality of the regulation.

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    Re: Bank of America Confirms 30,000 Layoffs

    Quote Originally Posted by Objective Voice View Post
    If you come from the standpoint that too big to fail banks bit off more than they could chew and that a large part of their problem stemmed from acquiring too much property, i.e., opening too many branches they couldn't afford to operate, I'd agree with you. But that would assume they simply made bad commercial property or marketing investments. That's NOT how these big investment firms got into trouble.

    Their "income" strategy had far more to do with creating lucrative derivities and commercial papers than it did purchasing commercial assets. So, let's keep things in perspective.

    Yes, the bailouts helped them to straighten out their balance sheets to a degree, but had they injected ALL of their bailout funds onto their balance sheets instead of paying out bonuses, they'd be alot more liquid today and would likely have to close fewer branch offices, thereby, laying off fewer workers. It's likely they still would have had to do one or the other or both, but I don't think they'd be anywhere near the 30,000 employee mark.

    Again, look at the amount of bonus money they paid out. It's un-godly!

    While I can agree that these bonus amounts are staggering, why many fail to say or understand, was those bonuses were and are paid under a contract. If they hadn't of been paid, those people could have sued for them. Would that have caused some negative press for those people, certainly it would have. But it doesn't change the fact that under the legal terms of a signed contract, these bonuses were due and payable.

    What surprises me just as much about people here, is that while there is much said about bank CEO”S getting paid their bonuses, it seems that no one is interested in two other companies that we gave even more money to, that haven't paid back one red cent of the money to bail them out, and are still calling for more money to be infused into them, yet their top people got their bonuses. Look up and see what it's cost us to bail out Fannie and Freddie.

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    Re: Bank of America Confirms 30,000 Layoffs

    Quote Originally Posted by washunut View Post
    They already were. The Fed under Greenspan and then Bernanke and the New York Fed ( Geithner) did a lousy job enforcing the regulations already on the books. In addition the SEC did a bad job as well as the state insurance regulators (AIG). It was not that we got rid of regulations as many say or there was not enough authority, it was the quality of the regulation.
    I don't think there were regulations on the books to prevent the crisis, even if they had been enforced to the max.

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    Re: Bank of America Confirms 30,000 Layoffs

    Quote Originally Posted by AdamT View Post
    I don't think there were regulations on the books to prevent the crisis, even if they had been enforced to the max.
    That is incorrect. The Fed can regulate the types of mortgages that banks provide. Greenspan thought that ARMs were OK in that they made mortgages more affordable. Insurance regulators could have insured that AIG had proper capital to back up the derivatives they wrote. Geithner as head of the NY Fed could have sqaushed the SIVs that banks created that allowed them to put a lot of risky assets "off balance sheet", Bank regulators could have done more work and disallowed "liar loans", the Fed and SEC could have required makes to hold more capital as a percent of total assets just as they are doing now, that is nothing new. The list goes on.

    The sad part is the public is really illiterate when it comes to financial matters and thus has to rely a political slogans.

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    Re: Bank of America Confirms 30,000 Layoffs

    Quote Originally Posted by washunut View Post
    That is incorrect. The Fed can regulate the types of mortgages that banks provide. Greenspan thought that ARMs were OK in that they made mortgages more affordable. Insurance regulators could have insured that AIG had proper capital to back up the derivatives they wrote. Geithner as head of the NY Fed could have sqaushed the SIVs that banks created that allowed them to put a lot of risky assets "off balance sheet", Bank regulators could have done more work and disallowed "liar loans", the Fed and SEC could have required makes to hold more capital as a percent of total assets just as they are doing now, that is nothing new. The list goes on.

    The sad part is the public is really illiterate when it comes to financial matters and thus has to rely a political slogans.
    What you're saying essentially is that OTS and the FDIC *should have* had regulations that made the subprime loans illegal, but in fact there were no such regulations on the books. So again, it wasn't primarily a failure to enforce existing regulations, but rather a failure to *enact* and enforce regulations. The same was true of the credit rating agencies which were allowed to police themselves. Greenspan was SHOCKED that they were so easy on themselves! The same was also true with the derivatives and swaps allowed that the whole scheme to proceed. The Commodities Futures Modernization Act actually stripped the CFTC of the power to regulate those transactions.

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    Re: Bank of America Confirms 30,000 Layoffs

    [QUOTE=AdamT;1059795394]What you're saying essentially is that OTS and the FDIC *should have* had regulations that made the subprime loans illegal, but in fact there were no such regulations on the books. So again, it wasn't primarily a failure to enforce existing regulations, but rather a failure to *enact* and enforce regulations. The same was true of the credit rating agencies which were allowed to police themselves. Greenspan was SHOCKED that they were so easy on themselves! The same was also true with the derivatives and swaps allowed that the whole scheme to proceed. The Commodities Futures Modernization Act actually stripped the CFTC of the power to regulate those transactions.[/QUOT

    Reade what I wrote not what you want to believe. I said nothing about the FDIC, rather the FED which is the key regulator for the largest banks. I did not mention CFTC, rather state insurance regulators as they are the main body regulating whether insurance companies are taking on too much risk.

    No offense, most people do not understand this stuff. Which is why it is so easy for politicians to lie about what and why things happened.

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