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Thread: US Banks Told To Make Plans For Preventing Collapse - Reuters

  1. #11
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    Re: US Banks Told To Make Plans For Preventing Collapse - Reuters

    Quote Originally Posted by John.NoseTip View Post
    I really hope your are right but when I see things like the item below and the libor issues I don't feel confident that the system isn't still sitting on a house of cards
    The LIBOR deal doesn't scare me (price fixing... yawn) but I agree that we're sitting on a house of cards with all the ultra-leveraged derivatives still floating around out there... what is it, $70 trillion? Staggering. While Obama recently signed some reforms into law (which Republicans will probably try to repeal, right after ObamaCare), they really don't unwind the conglomerate monster that has been spawned with the merger of investment banks with commercial banks... it's only a matter of time until the whole thing blows up, even worse than last time.

    There -- that should help you sleep better
    Last edited by Karl; 08-12-12 at 06:43 PM.

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    Re: US Banks Told To Make Plans For Preventing Collapse - Reuters

    The LIBOR deal doesn't scare me (price fixing... yawn) but I agree that we're sitting on a house of cards with all the ultra-leveraged derivatives still floating around out there... what is it, $70 trillion? Staggering. While Obama recently signed some reforms into law (which Republicans will probably try to repeal, right after ObamaCare), they really don't unwind the conglomerate monster that has been spawned with the merger of investment banks with commercial banks... it's only a matter of time until the whole thing blows up, even worse than last time.

    There -- that should help you sleep better
    I'm usually the pessimist in most of the discussions I've had on this forum. The main thing that concerns me about libor is all the interest rate swaps. I'm concerned that most of the "banks" sold the swaps based on the knowledge that the system was rigged therefore they incurred much more liablility than they can repay if we get a true rate. It reminds me of the idea that real estate always rises so we don't need to back these instruments with real capital. Also, the banks are going to be carpet bombed with large lawsuits based on those swaps. If just the local governments they screwed over sue I'm not sure they can afford it. I do agree the main problem is the merger of banking interest and neither candidate is going to change that. Hell Dodd-Frank still isn't implemented and it was mild compared to what is needed. Actually there's a great speech Bernie Sanders made a couple of years ago where he talks about how the implementation of Dodd-Frank will be slow rolled and hit the nail on the head with that one. If he would've called out Obama for hiring Larry Summers then it would be one of the best speeches I've ever heard. It's still great he just stopped short.

    [QUOTE=Karl;1060790174]

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    Re: US Banks Told To Make Plans For Preventing Collapse - Reuters

    The plan before 2008 was adequate. You fail, you go out of business.

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    Re: US Banks Told To Make Plans For Preventing Collapse - Reuters

    Quote Originally Posted by John.NoseTip View Post
    I'm usually the pessimist in most of the discussions I've had on this forum. The main thing that concerns me about libor is all the interest rate swaps. I'm concerned that most of the "banks" sold the swaps based on the knowledge that the system was rigged therefore they incurred much more liablility than they can repay if we get a true rate. [...]
    Oh. That's beyond any understand of I have of the issue; I am only vaguely aware that they were rigging the rate. Repercussions from any derivatives based upon those rates is a whole 'nother ballgame

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    Re: US Banks Told To Make Plans For Preventing Collapse - Reuters

    Quote Originally Posted by Fishstyx View Post
    The plan before 2008 was adequate. You fail, you go out of business.
    That's a nice plan for children, which is why they invented adults.

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    Re: US Banks Told To Make Plans For Preventing Collapse - Reuters

    Quote Originally Posted by Karl View Post
    That's a nice plan for children, which is why they invented adults.
    So, gonna actually rebut what I said or just reply with what you think is a witty comment?

    Is Lehman Brothers still around? How about Washington Mutual? Wells Fargo?

    What I said worked for them, why not the rest? The large fall, the smaller and mediums move up. Not rocket science.

    Instead, we have finance reform that not only solidifies "too big to fail" but makes harder for the smaller and medium financial institutions to come through and compete. There are plenty that did not get caught up in the subprime mortgage securities and derivatives BS that now find themselves in jeopardy due to the Dodd-Frank asset to risk requirements that pretty much only the larger financial institutions can easily manage.

    Adult enough for you?

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    Re: US Banks Told To Make Plans For Preventing Collapse - Reuters

    I get so sick of the morally hazardous, central banking system we have.
    "I have never understood why it is "greed" to want to keep the money you have earned but not greed to want to take somebody else's money." -Thomas Sowell

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    Re: US Banks Told To Make Plans For Preventing Collapse - Reuters

    Quote Originally Posted by Fishstyx View Post
    So, gonna actually rebut what I said or just reply with what you think is a witty comment?
    I like to think that wit is my strong suit; being smart is nothing particularly special where I come from

    But to answer your question, I gave your post all the rebuttal it merited. More, actually, since it merited no response at all. However, since you've belatedly decided to add some substance:

    Quote Originally Posted by Fishstyx View Post
    Is Lehman Brothers still around? How about Washington Mutual? Wells Fargo?

    What I said worked for them, why not the rest? The large fall, the smaller and mediums move up. Not rocket science.
    That's a nice argument for children; that's why they invented adults.

    Quote Originally Posted by Fishstyx View Post
    Instead, we have finance reform that not only solidifies "too big to fail" but makes harder for the smaller and medium financial institutions to come through and compete. There are plenty that did not get caught up in the subprime mortgage securities and derivatives BS that now find themselves in jeopardy due to the Dodd-Frank asset to risk requirements that pretty much only the larger financial institutions can easily manage.

    Adult enough for you?
    I will agree that finance reform did not address "too big to fail", and I see that as a glaring shortcoming; as to solidifying it, you'll need to present some type of argument to that effect. As to the margin requirements I am unfamiliar with those (other than being aware that they have been raised) and you did not deign to offer any specifics, so I therefore will not deign to do your homework.

    No. But it is an improvement.

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