more lawless bankers. tis the season

5 minutes ago, Maddus Mattus wrote

*snip*

Actually, yes! I do blame drug dealers for creating drug addicts.

So you have no problem if the government provides welfare and free healthcare to the homeless, jobless drug addict. It's not his fault, right?

So I blame the FED for creating profit hungry banks, who got high on their cheap money.

*snip*

They would have no CDO's to sell, if they did not have the cheap money to back it up.

Oh, those poor banks! They can't help themselves. They're so addicted to money, that have to grab every dollar they can get their hands on in order to buy mortgages and turn them into exotic and risky financial instruments called CDOs. How dare the Fed for lowering the interest rate!

*snip*

Yes they do. ING Direct was forced to by these products because law dictates they should reinvest a percentage of the amount of savings they collect back into US mortgages.

Citation please. Lets see the law that states that ING Direct was forced to use leverage in order to issue millions of mortgages in order to create CDOs to sell to other investors. Lets see.

*snip*

Good job they are doing!

I wouldn't trust them to fix my car, let alone fix the economy.

I wouldn't trust you to read a children's book and actually understand it, so your distrust of the government is meaningless. Your brain is stuck on "hate government" mode, and nothing is going to convince you that banks are the ones to blame for their own troubles that they created.

10 minutes ago, Maddus Mattus wrote

*snip*

You're still blaming the addict, take away the drugs, take away the addiction.

You don't ask the dealer to regulate who he deals to under what terms, you take him to jail.

You are suffering from Stockholm syndrome.

You're suffering from delusions and "bend over for the bank" syndrome. I hope you own a lot of lubricant.

Here's Maddus' nonsensical position:

Banks have absolutely no will power and restraint in risk management, so he wants all government regulations removed because then and only then will banks have the will power to avoid another credit crisis like 2007.

That's enough to make one's head explode.

10 minutes ago, cbae wrote

So you have no problem if the government provides welfare and free healthcare to the homeless, jobless drug addict. It's not his fault, right?

I don't have a problem with that, I just happen to think that private institutions can do a better job.

Oh, those poor banks! They can't help themselves. They're so addicted to money, that have to grab every dollar they can get their hands on in order to buy mortgages and turn them into exotic and risky financial instruments called CDOs. How dare the Fed for lowering the interest rate!

Actually yes, poor banks,.. Forced to be choose between two doom scenario's and being blamed for them,..

I would go out with a bang as well.

Citation please. Lets see the law that states that ING Direct was forced to use leverage in order to issue millions of mortgages in order to create CDOs to sell to other investors. Lets see.

Those are the normal reserve requirements. You have to have insurance against the money you put into the savings account. The US government states it must be domestic. Since the domestic market was saturated, ING direct bought up the only mortgages that where available on the market.

I wouldn't trust you to read a children's book and actually understand it, so your distrust of the government is meaningless. Your brain is stuck on "hate government" mode, and nothing is going to convince you that banks are the ones to blame for their own troubles that they created. 

I do not "hate government", I just think we have too much of it and that we can attribute a lot of our problems to them.

31 minutes ago, cbae wrote

Here's Maddus' nonsensical position:

Banks have absolutely no will power and restraint in risk management, so he wants all government regulations removed because then and only then will banks have the will power to avoid another credit crisis like 2007.

That's enough to make one's head explode.

All the banks risks are covered by government, so they do excellent risk management.

• Good times? Profit!
• Bad times? Bailout!

Free money for everyone!

11 minutes ago, Maddus Mattus wrote

All the banks risks are covered by government, so they do excellent risk management.

• Good times? Profit!
• Bad times? Bailout!

Free money for everyone!

And yet you oppose the only idea on this thread that suggests an actual mechanism by which the government might require the banks to pay for their own risks...

Sounds like you're actively supporting the banks having big profits in good times and bailouts in bad times.

@evildictaitor: I respect you for taking the time in finding a solution, but I don't think it solves the fundamental problem. It just fights another one of the symptoms.

The core problem is one of trust. We no longer trust our banks. And they no longer trust each other. Instead of letting banks being corrected by the market, the FED/ECB has started loaning out massive amounts of money. Instead of learning the lesson of trust, they got high on cheap credit.

Your solution of an extra insurance does not restore trust. It guarantees that you get your money back, so no trust in the bank is needed.

The true way out, is for the bank to take it's customers seriously. Because now the customer has no power, he has no voice, so he doesn't have to be taken seriously. Get the government out and the customer back in. Take away the safety net for both banker and customer, so that they have to dance on the cord together. This is the capitalist way, if you are a true capitalist.

1 hour ago, Maddus Mattus wrote

*snip*

All the banks risks are covered by government, so they do excellent risk management.

• Good times? Profit!
• Bad times? Bailout!

Free money for everyone!

They're covered by government only because they're so big they hold the economy hostage.

So, break them up into little pieces. Reinstate Glass-Steagall. If they get too big break them up again and again and again and again. That's what we do with monopolies. And if any happen to fail from that point on, you let them fail. No bail outs.

1 hour ago, Maddus Mattus wrote

*snip*

I don't have a problem with that, I just happen to think that private institutions can do a better job.

Why would private institutions help out drug addicts? It's the free market, baby. There are better ways to make money than helping drug addicts.

*snip*

Actually yes, poor banks,.. Forced to be choose between two doom scenario's and being blamed for them,..

What doom scenario? They created their own doom scenario. They weren't forced into it.

They could have issued their loans and sold them outright like they've been doing for 40 years. They didn't need to get into the CDO game.

I would go out with a bang as well.

*snip*

In other words, slash and burn. Destroy the entire world economy because you think the system isn't fair to you, when all you have to do is control your own greed. Nice.

Those are the normal reserve requirements. You have to have insurance against the money you put into the savings account. The US government states it must be domestic. Since the domestic market was saturated, ING direct bought up the only mortgages that where available on the market.

You dodged the question. What law forced ING to issue CDOs themselves instead of just issuing mortgages and servicing them or simply selling them outright to the GSEs?

*snip*

I do not "hate government", I just think we have too much of it and that we can attribute a lot of our problems to them.

No, you do hate government. Quit lying to yourself. The first step is to admit you have an irrational hatred of government, and then maybe you'll be taken seriously.

38 minutes ago, Maddus Mattus wrote

@evildictaitor: I respect you for taking the time in finding a solution, but I don't think it solves the fundamental problem. It just fights another one of the symptoms.

The core problem is one of trust. We no longer trust our banks. And they no longer trust each other. Instead of letting banks being corrected by the market, the FED/ECB has started loaning out massive amounts of money. Instead of learning the lesson of trust, they got high on cheap credit.

The problem isn't that we no longer trust banks. The problem is that they're no longer TRUSTWORTHY. The problem is that we continue to trust them despite their lack of trustworthiness. Break them up. Reinstate Glass-Steagall. If they still take on too much risk, buh-bye. Nobody's going to bail you out anymore.

The true way out, is for the bank to take it's customers seriously. Because now the customer has no power, he has no voice, so he doesn't have to be taken seriously. Get the government out and the customer back in. Take away the safety net for both banker and customer, so that they have to dance on the cord together. This is the capitalist way, if you are a true capitalist.

Here you go again, making broad statements without connecting any dots. How do get from point A (eliminating government involvement) to point B (banks are magically trustworthy and no longer too big to fail)?

10 minutes ago, cbae wrote

You dodged the question. What law forced ING to issue CDOs themselves instead of just issuing mortgages and servicing them or simply selling them outright to the GSEs?

ING did not issue any CDOs, they had to buy them as security for their savings accounts; 

http://en.wikipedia.org/wiki/Mortgage-backed_security

They didn't expect ING Direct to be such a huge success, so they had to buy their securities fast! They couldn't sell any of their own mortgages because they simply did not have the time and as I said the market was saturated.

If you want an exact law number, I don't have one,.

@Maddus Mattus: They didn't have to accept any more customers for ING Direct. They had every opportunity to take a sensible and measured approach, to control their assets so that they had sufficient securities without buying exceptionally high-risk debts. But that would have made them less profit in the short term and so they gambled on the risky approach so that they could roll in the good times all whilst ticking their fingers in their ears and pretending like the whole house of cards wasn't about to fall down. Unless you force the hand of bankers into a position where they must take the safer, less short-term-profit focused approach, greed will win out every time and recreate the same situation we've just been through.

37 minutes ago, Maddus Mattus wrote

*snip*

ING did not issue any CDOs, they had to buy them as security for their savings accounts; 

http://en.wikipedia.org/wiki/Mortgage-backed_security

They didn't expect ING Direct to be such a huge success, so they had to buy their securities fast! They couldn't sell any of their own mortgages because they simply did not have the time and as I said the market was saturated.

If you want an exact law number, I don't have one,.

There is no mention of AIG in the link you provided. It is a definition of mortgage backed securities.

Where's your source for the AIG details?

1 minute ago, Maddus Mattus wrote

@evildictaitor: I respect you for taking the time in finding a solution, but I don't think it solves the fundamental problem. It just fights another one of the symptoms.

The core problem is one of trust. We no longer trust our banks. And they no longer trust each other. Instead of letting banks being corrected by the market, the FED/ECB has started loaning out massive amounts of money. Instead of learning the lesson of trust, they got high on cheap credit.

I would argue that we shouldn't have to trust the banks. If the banks want to do risky lending, fine - whatever. So far as it's their money (and money they've been given to invest) that they're putting at risk, I have no problem with them spending it all on lottery tickets, using it to build a massive gold statue of their CEO or going to vegas and putting it all on black.

The problem with the banks isn't that they are irresponsible. It's that they're irresponsible with money that isn't theirs and with no comeback when they screw up.

Did anyone else notice the US Fed promised to spend $40B each month on mortgage backed securities (I believe they are of the bond variety) until further notice. They plan to hold interest rates at zero for the next three years.

http://www.philly.com/philly/business/homepage/20120914_ap_fedsboldplanstillmightnotjoltsloweconomy.html?c=r

They hope that this action might create jobs. 

Why? It's a flat economy and stagnant. Bernake described this as something of "a Main Street action", since it is meant to create jobs.

The Fed admitted that this plan will hurt those living on fixed incomes or reliant on interest on savings and investments but at the same time denies it will cause unnecessary inflation. Wait, he can't have it both ways, can he? The inevitable inflation is seen as 'within tolerance' by the Fed, and at the same time, it admittedly hurts savers. The goal is to get the companies buying gold and silver to convert their assets back into Wall Street investments. Hmm. More fluff for the poodle. And nobody's picking up the poodle doodle left in your yard. Man, the government loves Wall Street.

Wall Street has us right where they want us, and the Treasury doors are thrown open.

Still no prosecutions for lawless bankers.

And this is who the Fed wants me to trust? Wall Street? The Fed will never stop doing everything it can to put all of our money into investment banking and to encourage us to spend, spend, spend. I'm sick of this routine!

According to a trustee liquidating the company after its collapse, the losses incurred by customers of MF Global stood at $1.6 billion because of the debacle as of April 2012. The vast majority of these funds have not been returned to customers. Rolling Stone reported in April 2012 that the number stands at $1.6 billion, and that "nobody disputes the fact that MF Global officials dipped into customer accounts and took...customer money."

http://en.wikipedia.org/wiki/MF_Global#Jon_Corzine.27s_possible_role_in_the_firm.27s_collapse

Money doesn't disappear, folks, it is stolen.

@AndyC: Valid point.

@JohnAskew: I've been looking all morning, it's been some time ago since I read it.

Can't remember where.

@JohnAskew: Printing money is just another way of raising taxes.

So basically, they are bailing the banks out again.

Inflation will be on the rise, so prices will go up. And they think that will increase spending,.

It most certainly will not.