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OT: The American middle class just got their goose cooked
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meloshouldgo
Posts: 26166
Alba Posts: 0
Joined: 5/3/2014
Member: #5801

12/10/2017  12:14 AM
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
nixluva wrote:
meloshouldgo wrote:
nixluva wrote:
arkrud wrote:Farther accumulating the wealth is very good.
This is the only way to make good use of it.
And I see it is used efficiently enough to move human civilization forward.
If we have more wealth in disposal of Masks, Jobs, Brins, and other like them, we will be better off.
As Russian poet and bard Visockiy wrote:
"I do not like Coliseums and Circus,
This is were millions are broken by dollar,
And even if we are for great disturbances,
I will never be in love with this"

Here's the thing, Corporations are at the point where they have so much money they don't know what to do with it. They aren't creating more jobs or paying more. The accumulation of more and more wealth isn't a good thing at a certain point.

The answer to this problem was simple but Powerful Wealthy individuals have bought the Government and fixed the rules so that most of the money goes to the top. That's not a good thing. There's no reason why this country hasn't taken on a massive project of rebuilding it's Infrastructure and Education so that the country could be ready for the future. The Rich have been all too happy to allow this country to ROT from the inside out. That is not a good thing.

This is the richest country in the world and yet we have HORRIBLE schools, roads, bridges, airports, rail and ports. WHY???

In the world of Arkrud, there's no need to create jobs, the poor deserve to be poor because they don't work hard and the rich should continue to accumulate wealth because it "moves civilization forward".

SMDH


Out of all the egregious crap that has been put in this thread, this is the one. I have no interest in getting back into it but I REALLY hate stupid **** like this. A huge reason why the recession happened was because the government loosened standards for down payments, pressured lenders to give "affordable" loans to people even they clearly weren't qualified for it. Unsprupsingly this drove up housing prices until their inevitable decline when the bubble burst.

The neolib that wants to deregulate everything also gets to criticize the government for "loosening standards" - the level of hypocrisy exhibited here is mindboggling. Somehow the it was the government that "pressured" lenders - wow just wow.


Come on man. You've never heard of the CRA? You have to be really stupid to ignore the governments role leading up to 2008.

Furthermore, no one(even though straw man "neo liberal" image you have of me) thinks predatory lending is a good thing. Unfortunately government loosened the standards for this that allowed for profit seekers make full use of predatory lending.

So do you want government regulation of financial markets or not?


If a ban regulation to protect borrwers from fraud consistitutes regulation then yes I am all for it.

Good to know - how about regulations to protect Americans from having banks invest their savings money in risky speculation that they may not even be able to make the margin call payments on? Are those bans ok?

I cannot teach anybody anything. I can only try to make them think - Socrates
AUTOADVERT
TPercy
Posts: 24886
Alba Posts: 1
Joined: 2/5/2014
Member: #5748

12/10/2017  12:26 AM
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
nixluva wrote:
meloshouldgo wrote:
nixluva wrote:
arkrud wrote:Farther accumulating the wealth is very good.
This is the only way to make good use of it.
And I see it is used efficiently enough to move human civilization forward.
If we have more wealth in disposal of Masks, Jobs, Brins, and other like them, we will be better off.
As Russian poet and bard Visockiy wrote:
"I do not like Coliseums and Circus,
This is were millions are broken by dollar,
And even if we are for great disturbances,
I will never be in love with this"

Here's the thing, Corporations are at the point where they have so much money they don't know what to do with it. They aren't creating more jobs or paying more. The accumulation of more and more wealth isn't a good thing at a certain point.

The answer to this problem was simple but Powerful Wealthy individuals have bought the Government and fixed the rules so that most of the money goes to the top. That's not a good thing. There's no reason why this country hasn't taken on a massive project of rebuilding it's Infrastructure and Education so that the country could be ready for the future. The Rich have been all too happy to allow this country to ROT from the inside out. That is not a good thing.

This is the richest country in the world and yet we have HORRIBLE schools, roads, bridges, airports, rail and ports. WHY???

In the world of Arkrud, there's no need to create jobs, the poor deserve to be poor because they don't work hard and the rich should continue to accumulate wealth because it "moves civilization forward".

SMDH


Out of all the egregious crap that has been put in this thread, this is the one. I have no interest in getting back into it but I REALLY hate stupid **** like this. A huge reason why the recession happened was because the government loosened standards for down payments, pressured lenders to give "affordable" loans to people even they clearly weren't qualified for it. Unsprupsingly this drove up housing prices until their inevitable decline when the bubble burst.

The neolib that wants to deregulate everything also gets to criticize the government for "loosening standards" - the level of hypocrisy exhibited here is mindboggling. Somehow the it was the government that "pressured" lenders - wow just wow.


Come on man. You've never heard of the CRA? You have to be really stupid to ignore the governments role leading up to 2008.

Furthermore, no one(even though straw man "neo liberal" image you have of me) thinks predatory lending is a good thing. Unfortunately government loosened the standards for this that allowed for profit seekers make full use of predatory lending.

So do you want government regulation of financial markets or not?


If a ban regulation to protect borrwers from fraud consistitutes regulation then yes I am all for it.

Good to know - how about regulations to protect Americans from having banks invest their savings money in risky speculation that they may not even be able to make the margin call payments on? Are those bans ok?


Well the FDIC provides reinbursements of up 250k for insured deposits so I don't know what the point of those regulations would be.
The Future is Bright!
meloshouldgo
Posts: 26166
Alba Posts: 0
Joined: 5/3/2014
Member: #5801

12/10/2017  12:54 AM
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
nixluva wrote:
meloshouldgo wrote:
nixluva wrote:
arkrud wrote:Farther accumulating the wealth is very good.
This is the only way to make good use of it.
And I see it is used efficiently enough to move human civilization forward.
If we have more wealth in disposal of Masks, Jobs, Brins, and other like them, we will be better off.
As Russian poet and bard Visockiy wrote:
"I do not like Coliseums and Circus,
This is were millions are broken by dollar,
And even if we are for great disturbances,
I will never be in love with this"

Here's the thing, Corporations are at the point where they have so much money they don't know what to do with it. They aren't creating more jobs or paying more. The accumulation of more and more wealth isn't a good thing at a certain point.

The answer to this problem was simple but Powerful Wealthy individuals have bought the Government and fixed the rules so that most of the money goes to the top. That's not a good thing. There's no reason why this country hasn't taken on a massive project of rebuilding it's Infrastructure and Education so that the country could be ready for the future. The Rich have been all too happy to allow this country to ROT from the inside out. That is not a good thing.

This is the richest country in the world and yet we have HORRIBLE schools, roads, bridges, airports, rail and ports. WHY???

In the world of Arkrud, there's no need to create jobs, the poor deserve to be poor because they don't work hard and the rich should continue to accumulate wealth because it "moves civilization forward".

SMDH


Out of all the egregious crap that has been put in this thread, this is the one. I have no interest in getting back into it but I REALLY hate stupid **** like this. A huge reason why the recession happened was because the government loosened standards for down payments, pressured lenders to give "affordable" loans to people even they clearly weren't qualified for it. Unsprupsingly this drove up housing prices until their inevitable decline when the bubble burst.

The neolib that wants to deregulate everything also gets to criticize the government for "loosening standards" - the level of hypocrisy exhibited here is mindboggling. Somehow the it was the government that "pressured" lenders - wow just wow.


Come on man. You've never heard of the CRA? You have to be really stupid to ignore the governments role leading up to 2008.

Furthermore, no one(even though straw man "neo liberal" image you have of me) thinks predatory lending is a good thing. Unfortunately government loosened the standards for this that allowed for profit seekers make full use of predatory lending.

So do you want government regulation of financial markets or not?


If a ban regulation to protect borrwers from fraud consistitutes regulation then yes I am all for it.

Good to know - how about regulations to protect Americans from having banks invest their savings money in risky speculation that they may not even be able to make the margin call payments on? Are those bans ok?


Well the FDIC provides reinbursements of up 250k for insured deposits so I don't know what the point of those regulations would be.

The FDIC almost went bankrupt during 2008-2009 just to cover a handful of large banks that failed or nearly failed. But you think it's adequate protection for mainstream Americans and the banks they entrust their lifetime worth of savings to, should be allowed to use that money for speculation from which the banks will profit but if they go bad the FDIC and the taxpayers will hold the risk?

$25 Billion - FDIC - Federal Deposit Insurance Corporation Fund

FDIC insures 7,181 financial institutions. The FDIC is funded by financial institutions that pay for deposit insurance coverage.

During the 1980's/1990's savings and loan crisis, a parallel insurer- the FSLIC (Federal Savings and Loan Insurance Corporation) went bankrupt.
The FSLIC replacement named RTC was merged into the FDIC. The savings and loan crisis cost tax payers $150 Billion.

The FDIC takes control of failed banks and financial institutions, where it first moves to find a buyer of all the bank's assets, including the toxic ones. After the sale of assets (including toxic, usually at discounted prices) the FDIC attempts to cover losses. The FDIC will first pay-out all insured accounts, followed by
applying “hair-cuts” to uninsured deposits. Safe deposit boxes, bond holders, stocks, money funds, etc. are not insured by FDIC.

Due to bank failures during the 2008/2009 bank crisis, the FDIC fund fell to $0.648 billion by August of 2009. Subsequent bank failures almost bankrupted the FDIC
, so it demanded a 3 year pre-payment from banks to shore up its capital. Wikipedia - "According to the FDIC.gov website (as of March 2013), 'FDIC deposit insurance is backed
by the full faith and credit of the United States government.'"
This is less than clear, since there are no laws binding the U.S. government to make good on FDIC insurance liabilities.
The details of FDIC are found on Wikipedia | Source Wikipedia & ZeroHedge

I cannot teach anybody anything. I can only try to make them think - Socrates
TPercy
Posts: 24886
Alba Posts: 1
Joined: 2/5/2014
Member: #5748

12/10/2017  1:26 AM
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
nixluva wrote:
meloshouldgo wrote:
nixluva wrote:
arkrud wrote:Farther accumulating the wealth is very good.
This is the only way to make good use of it.
And I see it is used efficiently enough to move human civilization forward.
If we have more wealth in disposal of Masks, Jobs, Brins, and other like them, we will be better off.
As Russian poet and bard Visockiy wrote:
"I do not like Coliseums and Circus,
This is were millions are broken by dollar,
And even if we are for great disturbances,
I will never be in love with this"

Here's the thing, Corporations are at the point where they have so much money they don't know what to do with it. They aren't creating more jobs or paying more. The accumulation of more and more wealth isn't a good thing at a certain point.

The answer to this problem was simple but Powerful Wealthy individuals have bought the Government and fixed the rules so that most of the money goes to the top. That's not a good thing. There's no reason why this country hasn't taken on a massive project of rebuilding it's Infrastructure and Education so that the country could be ready for the future. The Rich have been all too happy to allow this country to ROT from the inside out. That is not a good thing.

This is the richest country in the world and yet we have HORRIBLE schools, roads, bridges, airports, rail and ports. WHY???

In the world of Arkrud, there's no need to create jobs, the poor deserve to be poor because they don't work hard and the rich should continue to accumulate wealth because it "moves civilization forward".

SMDH


Out of all the egregious crap that has been put in this thread, this is the one. I have no interest in getting back into it but I REALLY hate stupid **** like this. A huge reason why the recession happened was because the government loosened standards for down payments, pressured lenders to give "affordable" loans to people even they clearly weren't qualified for it. Unsprupsingly this drove up housing prices until their inevitable decline when the bubble burst.

The neolib that wants to deregulate everything also gets to criticize the government for "loosening standards" - the level of hypocrisy exhibited here is mindboggling. Somehow the it was the government that "pressured" lenders - wow just wow.


Come on man. You've never heard of the CRA? You have to be really stupid to ignore the governments role leading up to 2008.

Furthermore, no one(even though straw man "neo liberal" image you have of me) thinks predatory lending is a good thing. Unfortunately government loosened the standards for this that allowed for profit seekers make full use of predatory lending.

So do you want government regulation of financial markets or not?


If a ban regulation to protect borrwers from fraud consistitutes regulation then yes I am all for it.

Good to know - how about regulations to protect Americans from having banks invest their savings money in risky speculation that they may not even be able to make the margin call payments on? Are those bans ok?


Well the FDIC provides reinbursements of up 250k for insured deposits so I don't know what the point of those regulations would be.

The FDIC almost went bankrupt during 2008-2009 just to cover a handful of large banks that failed or nearly failed. But you think it's adequate protection for mainstream Americans and the banks they entrust their lifetime worth of savings to, should be allowed to use that money for speculation from which the banks will profit but if they go bad the FDIC and the taxpayers will hold the risk?

$25 Billion - FDIC - Federal Deposit Insurance Corporation Fund

FDIC insures 7,181 financial institutions. The FDIC is funded by financial institutions that pay for deposit insurance coverage.

During the 1980's/1990's savings and loan crisis, a parallel insurer- the FSLIC (Federal Savings and Loan Insurance Corporation) went bankrupt.
The FSLIC replacement named RTC was merged into the FDIC. The savings and loan crisis cost tax payers $150 Billion.

The FDIC takes control of failed banks and financial institutions, where it first moves to find a buyer of all the bank's assets, including the toxic ones. After the sale of assets (including toxic, usually at discounted prices) the FDIC attempts to cover losses. The FDIC will first pay-out all insured accounts, followed by
applying “hair-cuts” to uninsured deposits. Safe deposit boxes, bond holders, stocks, money funds, etc. are not insured by FDIC.

Due to bank failures during the 2008/2009 bank crisis, the FDIC fund fell to $0.648 billion by August of 2009. Subsequent bank failures almost bankrupted the FDIC
, so it demanded a 3 year pre-payment from banks to shore up its capital. Wikipedia - "According to the FDIC.gov website (as of March 2013), 'FDIC deposit insurance is backed
by the full faith and credit of the United States government.'"
This is less than clear, since there are no laws binding the U.S. government to make good on FDIC insurance liabilities.
The details of FDIC are found on Wikipedia | Source Wikipedia & ZeroHedge

The key part is that the FDIC didn't go bankrupt even though they were also covering uninsured liabilities that they had no obligation to in the first place. Besides this wouldn't be a topic had the government not implemented bad policies that caused the crisis in the first place.

The Future is Bright!
meloshouldgo
Posts: 26166
Alba Posts: 0
Joined: 5/3/2014
Member: #5801

12/10/2017  8:10 AM    LAST EDITED: 12/10/2017  9:50 AM
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
nixluva wrote:
meloshouldgo wrote:
nixluva wrote:
arkrud wrote:Farther accumulating the wealth is very good.
This is the only way to make good use of it.
And I see it is used efficiently enough to move human civilization forward.
If we have more wealth in disposal of Masks, Jobs, Brins, and other like them, we will be better off.
As Russian poet and bard Visockiy wrote:
"I do not like Coliseums and Circus,
This is were millions are broken by dollar,
And even if we are for great disturbances,
I will never be in love with this"

Here's the thing, Corporations are at the point where they have so much money they don't know what to do with it. They aren't creating more jobs or paying more. The accumulation of more and more wealth isn't a good thing at a certain point.

The answer to this problem was simple but Powerful Wealthy individuals have bought the Government and fixed the rules so that most of the money goes to the top. That's not a good thing. There's no reason why this country hasn't taken on a massive project of rebuilding it's Infrastructure and Education so that the country could be ready for the future. The Rich have been all too happy to allow this country to ROT from the inside out. That is not a good thing.

This is the richest country in the world and yet we have HORRIBLE schools, roads, bridges, airports, rail and ports. WHY???

In the world of Arkrud, there's no need to create jobs, the poor deserve to be poor because they don't work hard and the rich should continue to accumulate wealth because it "moves civilization forward".

SMDH


Out of all the egregious crap that has been put in this thread, this is the one. I have no interest in getting back into it but I REALLY hate stupid **** like this. A huge reason why the recession happened was because the government loosened standards for down payments, pressured lenders to give "affordable" loans to people even they clearly weren't qualified for it. Unsprupsingly this drove up housing prices until their inevitable decline when the bubble burst.

The neolib that wants to deregulate everything also gets to criticize the government for "loosening standards" - the level of hypocrisy exhibited here is mindboggling. Somehow the it was the government that "pressured" lenders - wow just wow.


Come on man. You've never heard of the CRA? You have to be really stupid to ignore the governments role leading up to 2008.

Furthermore, no one(even though straw man "neo liberal" image you have of me) thinks predatory lending is a good thing. Unfortunately government loosened the standards for this that allowed for profit seekers make full use of predatory lending.

So do you want government regulation of financial markets or not?


If a ban regulation to protect borrwers from fraud consistitutes regulation then yes I am all for it.

Good to know - how about regulations to protect Americans from having banks invest their savings money in risky speculation that they may not even be able to make the margin call payments on? Are those bans ok?


Well the FDIC provides reinbursements of up 250k for insured deposits so I don't know what the point of those regulations would be.

The FDIC almost went bankrupt during 2008-2009 just to cover a handful of large banks that failed or nearly failed. But you think it's adequate protection for mainstream Americans and the banks they entrust their lifetime worth of savings to, should be allowed to use that money for speculation from which the banks will profit but if they go bad the FDIC and the taxpayers will hold the risk?

$25 Billion - FDIC - Federal Deposit Insurance Corporation Fund

FDIC insures 7,181 financial institutions. The FDIC is funded by financial institutions that pay for deposit insurance coverage.

During the 1980's/1990's savings and loan crisis, a parallel insurer- the FSLIC (Federal Savings and Loan Insurance Corporation) went bankrupt.
The FSLIC replacement named RTC was merged into the FDIC. The savings and loan crisis cost tax payers $150 Billion.

The FDIC takes control of failed banks and financial institutions, where it first moves to find a buyer of all the bank's assets, including the toxic ones. After the sale of assets (including toxic, usually at discounted prices) the FDIC attempts to cover losses. The FDIC will first pay-out all insured accounts, followed by
applying “hair-cuts” to uninsured deposits. Safe deposit boxes, bond holders, stocks, money funds, etc. are not insured by FDIC.

Due to bank failures during the 2008/2009 bank crisis, the FDIC fund fell to $0.648 billion by August of 2009. Subsequent bank failures almost bankrupted the FDIC
, so it demanded a 3 year pre-payment from banks to shore up its capital. Wikipedia - "According to the FDIC.gov website (as of March 2013), 'FDIC deposit insurance is backed
by the full faith and credit of the United States government.'"
This is less than clear, since there are no laws binding the U.S. government to make good on FDIC insurance liabilities.
The details of FDIC are found on Wikipedia | Source Wikipedia & ZeroHedge

The key part is that the FDIC didn't go bankrupt even though they were also covering uninsured liabilities that they had no obligation to in the first place. Besides this wouldn't be a topic had the government not implemented bad policies that caused the crisis in the first place.

The key part is the only reason the FDIC didn't go bankrupt is because the Govt. used billions of dollars of tax payer money to bail out the remaining large banks. They had 25 Billion on hand and were down to their last 650 Million.

Now to the other claim. Exactly what did the government do to force the banks into predatory lending?

I cannot teach anybody anything. I can only try to make them think - Socrates
meloshouldgo
Posts: 26166
Alba Posts: 0
Joined: 5/3/2014
Member: #5801

12/10/2017  12:41 PM    LAST EDITED: 12/10/2017  12:58 PM
http://demonocracy.info/infographics/usa/fdic/fdic.html

Debunking the FDIC insurance myth - This one pager info graphic is excellent way to understand the SCALE of the problem.
The FDIC holds less than 2% of the total deposits in it's fund. Around 25-40 billion depending on when you look
US Banks have over 9.2 TRILLION in deposits (that is INSURED by 25 Billion in cash)
They also have 300 TRILLION in derivatives that according to our neoliberal think tanks should NOT be regulated. Scroll to the bottom of the one pager and you will get a sense of scale.
(In 2017 this number has come closer to 542 TRILLION and that is a total of only those institutions that "voluntarily" report their positions)

According to the one poster here that FDIC is sufficient and banks should be allowed to do whatever they want with your money because when the FDIC fails you can pay even more money (through government bail outs) to keep the wheels from falling of the bus. What a cozy little system the brilliant minds of Wall street have created for us.

I cannot teach anybody anything. I can only try to make them think - Socrates
TPercy
Posts: 24886
Alba Posts: 1
Joined: 2/5/2014
Member: #5748

12/10/2017  3:06 PM
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
nixluva wrote:
meloshouldgo wrote:
nixluva wrote:
arkrud wrote:Farther accumulating the wealth is very good.
This is the only way to make good use of it.
And I see it is used efficiently enough to move human civilization forward.
If we have more wealth in disposal of Masks, Jobs, Brins, and other like them, we will be better off.
As Russian poet and bard Visockiy wrote:
"I do not like Coliseums and Circus,
This is were millions are broken by dollar,
And even if we are for great disturbances,
I will never be in love with this"

Here's the thing, Corporations are at the point where they have so much money they don't know what to do with it. They aren't creating more jobs or paying more. The accumulation of more and more wealth isn't a good thing at a certain point.

The answer to this problem was simple but Powerful Wealthy individuals have bought the Government and fixed the rules so that most of the money goes to the top. That's not a good thing. There's no reason why this country hasn't taken on a massive project of rebuilding it's Infrastructure and Education so that the country could be ready for the future. The Rich have been all too happy to allow this country to ROT from the inside out. That is not a good thing.

This is the richest country in the world and yet we have HORRIBLE schools, roads, bridges, airports, rail and ports. WHY???

In the world of Arkrud, there's no need to create jobs, the poor deserve to be poor because they don't work hard and the rich should continue to accumulate wealth because it "moves civilization forward".

SMDH


Out of all the egregious crap that has been put in this thread, this is the one. I have no interest in getting back into it but I REALLY hate stupid **** like this. A huge reason why the recession happened was because the government loosened standards for down payments, pressured lenders to give "affordable" loans to people even they clearly weren't qualified for it. Unsprupsingly this drove up housing prices until their inevitable decline when the bubble burst.

The neolib that wants to deregulate everything also gets to criticize the government for "loosening standards" - the level of hypocrisy exhibited here is mindboggling. Somehow the it was the government that "pressured" lenders - wow just wow.


Come on man. You've never heard of the CRA? You have to be really stupid to ignore the governments role leading up to 2008.

Furthermore, no one(even though straw man "neo liberal" image you have of me) thinks predatory lending is a good thing. Unfortunately government loosened the standards for this that allowed for profit seekers make full use of predatory lending.

So do you want government regulation of financial markets or not?


If a ban regulation to protect borrwers from fraud consistitutes regulation then yes I am all for it.

Good to know - how about regulations to protect Americans from having banks invest their savings money in risky speculation that they may not even be able to make the margin call payments on? Are those bans ok?


Well the FDIC provides reinbursements of up 250k for insured deposits so I don't know what the point of those regulations would be.

The FDIC almost went bankrupt during 2008-2009 just to cover a handful of large banks that failed or nearly failed. But you think it's adequate protection for mainstream Americans and the banks they entrust their lifetime worth of savings to, should be allowed to use that money for speculation from which the banks will profit but if they go bad the FDIC and the taxpayers will hold the risk?

$25 Billion - FDIC - Federal Deposit Insurance Corporation Fund

FDIC insures 7,181 financial institutions. The FDIC is funded by financial institutions that pay for deposit insurance coverage.

During the 1980's/1990's savings and loan crisis, a parallel insurer- the FSLIC (Federal Savings and Loan Insurance Corporation) went bankrupt.
The FSLIC replacement named RTC was merged into the FDIC. The savings and loan crisis cost tax payers $150 Billion.

The FDIC takes control of failed banks and financial institutions, where it first moves to find a buyer of all the bank's assets, including the toxic ones. After the sale of assets (including toxic, usually at discounted prices) the FDIC attempts to cover losses. The FDIC will first pay-out all insured accounts, followed by
applying “hair-cuts” to uninsured deposits. Safe deposit boxes, bond holders, stocks, money funds, etc. are not insured by FDIC.

Due to bank failures during the 2008/2009 bank crisis, the FDIC fund fell to $0.648 billion by August of 2009. Subsequent bank failures almost bankrupted the FDIC
, so it demanded a 3 year pre-payment from banks to shore up its capital. Wikipedia - "According to the FDIC.gov website (as of March 2013), 'FDIC deposit insurance is backed
by the full faith and credit of the United States government.'"
This is less than clear, since there are no laws binding the U.S. government to make good on FDIC insurance liabilities.
The details of FDIC are found on Wikipedia | Source Wikipedia & ZeroHedge

The key part is that the FDIC didn't go bankrupt even though they were also covering uninsured liabilities that they had no obligation to in the first place. Besides this wouldn't be a topic had the government not implemented bad policies that caused the crisis in the first place.

The key part is the only reason the FDIC didn't go bankrupt is because the Govt. used billions of dollars of tax payer money to bail out the remaining large banks. They had 25 Billion on hand and were down to their last 650 Million.

Now to the other claim. Exactly what did the government do to force the banks into predatory lending?

For starters, Mutual and hedge funds and IB's are the financial institutions that engage in speculation, not commercial banks where savings are placed( unless you are working with a financial advisor or something). So unless you are a serious investor, ones savings arn't exactly backed up by "risky speculation" and you if choose to go that route through IB then that is the risk that you and your advisor takes. Commercial banks can however loan out money which is a very good thing for the economy. Furthermore, the government shouldn't have bailed out those big banks if you ask me, it just aggravated the crisis.


The government didn't force banks to use predatory lending;they encouraged it. Me and you agree that in the free market that everything is based on self interest, so when you loosen regualations regarding the types of loans and the bank knows they can get away with it, there is a chance they will engage in it. in 2004, the federal government overrode state laws that regulated morgtage credit and banks which basically incentivizies banks move to those states and engage in high risk loans that screws over their borrowers. Also HUD in the 90s set goals for private industry to give loans to low income families, even if they clearly could not afford it.

Predatory lending was just a part of the crisis. What happened in 2008 was very complex, hence the reason I snapped at Nixluva(a bit over the top admittedly) for at best eggregiously oversimplifying a crisis as "banks gambling everyones money" to contribute to his extreme narrative.

The Future is Bright!
meloshouldgo
Posts: 26166
Alba Posts: 0
Joined: 5/3/2014
Member: #5801

12/10/2017  3:31 PM
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
nixluva wrote:
meloshouldgo wrote:
nixluva wrote:
arkrud wrote:Farther accumulating the wealth is very good.
This is the only way to make good use of it.
And I see it is used efficiently enough to move human civilization forward.
If we have more wealth in disposal of Masks, Jobs, Brins, and other like them, we will be better off.
As Russian poet and bard Visockiy wrote:
"I do not like Coliseums and Circus,
This is were millions are broken by dollar,
And even if we are for great disturbances,
I will never be in love with this"

Here's the thing, Corporations are at the point where they have so much money they don't know what to do with it. They aren't creating more jobs or paying more. The accumulation of more and more wealth isn't a good thing at a certain point.

The answer to this problem was simple but Powerful Wealthy individuals have bought the Government and fixed the rules so that most of the money goes to the top. That's not a good thing. There's no reason why this country hasn't taken on a massive project of rebuilding it's Infrastructure and Education so that the country could be ready for the future. The Rich have been all too happy to allow this country to ROT from the inside out. That is not a good thing.

This is the richest country in the world and yet we have HORRIBLE schools, roads, bridges, airports, rail and ports. WHY???

In the world of Arkrud, there's no need to create jobs, the poor deserve to be poor because they don't work hard and the rich should continue to accumulate wealth because it "moves civilization forward".

SMDH


Out of all the egregious crap that has been put in this thread, this is the one. I have no interest in getting back into it but I REALLY hate stupid **** like this. A huge reason why the recession happened was because the government loosened standards for down payments, pressured lenders to give "affordable" loans to people even they clearly weren't qualified for it. Unsprupsingly this drove up housing prices until their inevitable decline when the bubble burst.

The neolib that wants to deregulate everything also gets to criticize the government for "loosening standards" - the level of hypocrisy exhibited here is mindboggling. Somehow the it was the government that "pressured" lenders - wow just wow.


Come on man. You've never heard of the CRA? You have to be really stupid to ignore the governments role leading up to 2008.

Furthermore, no one(even though straw man "neo liberal" image you have of me) thinks predatory lending is a good thing. Unfortunately government loosened the standards for this that allowed for profit seekers make full use of predatory lending.

So do you want government regulation of financial markets or not?


If a ban regulation to protect borrwers from fraud consistitutes regulation then yes I am all for it.

Good to know - how about regulations to protect Americans from having banks invest their savings money in risky speculation that they may not even be able to make the margin call payments on? Are those bans ok?


Well the FDIC provides reinbursements of up 250k for insured deposits so I don't know what the point of those regulations would be.

The FDIC almost went bankrupt during 2008-2009 just to cover a handful of large banks that failed or nearly failed. But you think it's adequate protection for mainstream Americans and the banks they entrust their lifetime worth of savings to, should be allowed to use that money for speculation from which the banks will profit but if they go bad the FDIC and the taxpayers will hold the risk?

$25 Billion - FDIC - Federal Deposit Insurance Corporation Fund

FDIC insures 7,181 financial institutions. The FDIC is funded by financial institutions that pay for deposit insurance coverage.

During the 1980's/1990's savings and loan crisis, a parallel insurer- the FSLIC (Federal Savings and Loan Insurance Corporation) went bankrupt.
The FSLIC replacement named RTC was merged into the FDIC. The savings and loan crisis cost tax payers $150 Billion.

The FDIC takes control of failed banks and financial institutions, where it first moves to find a buyer of all the bank's assets, including the toxic ones. After the sale of assets (including toxic, usually at discounted prices) the FDIC attempts to cover losses. The FDIC will first pay-out all insured accounts, followed by
applying “hair-cuts” to uninsured deposits. Safe deposit boxes, bond holders, stocks, money funds, etc. are not insured by FDIC.

Due to bank failures during the 2008/2009 bank crisis, the FDIC fund fell to $0.648 billion by August of 2009. Subsequent bank failures almost bankrupted the FDIC
, so it demanded a 3 year pre-payment from banks to shore up its capital. Wikipedia - "According to the FDIC.gov website (as of March 2013), 'FDIC deposit insurance is backed
by the full faith and credit of the United States government.'"
This is less than clear, since there are no laws binding the U.S. government to make good on FDIC insurance liabilities.
The details of FDIC are found on Wikipedia | Source Wikipedia & ZeroHedge

The key part is that the FDIC didn't go bankrupt even though they were also covering uninsured liabilities that they had no obligation to in the first place. Besides this wouldn't be a topic had the government not implemented bad policies that caused the crisis in the first place.

The key part is the only reason the FDIC didn't go bankrupt is because the Govt. used billions of dollars of tax payer money to bail out the remaining large banks. They had 25 Billion on hand and were down to their last 650 Million.

Now to the other claim. Exactly what did the government do to force the banks into predatory lending?

For starters, Mutual and hedge funds and IB's are the financial institutions that engage in speculation, not commercial banks where savings are placed( unless you are working with a financial advisor or something). So unless you are a serious investor, ones savings arn't exactly backed up by "risky speculation" and you if choose to go that route through IB then that is the risk that you and your advisor takes. Commercial banks can however loan out money which is a very good thing for the economy. Furthermore, the government shouldn't have bailed out those big banks if you ask me, it just aggravated the crisis.


The government didn't force banks to use predatory lending;they encouraged it. Me and you agree that in the free market that everything is based on self interest, so when you loosen regualations regarding the types of loans and the bank knows they can get away with it, there is a chance they will engage in it. in 2004, the federal government overrode state laws that regulated morgtage credit and banks which basically incentivizies banks move to those states and engage in high risk loans that screws over their borrowers. Also HUD in the 90s set goals for private industry to give loans to low income families, even if they clearly could not afford it.

Predatory lending was just a part of the crisis. What happened in 2008 was very complex, hence the reason I snapped at Nixluva(a bit over the top admittedly) for at best eggregiously oversimplifying a crisis as "banks gambling everyones money" to contribute to his extreme narrative.

Come down to earth, have you? Changed from Government forced banks into predatory lending to "incentivized" - this is good at least you seem to be operating on a rational plane rather than pure hyperbole.

But your premise is still wrong - your words:

For starters, Mutual and hedge funds and IB's are the financial institutions that engage in speculation, not commercial banks where savings are placed


The distinction between Investment Banks and Commercial Banks(depository) died with the repeal of Glass Stegall over the years. This another benefit of the deregulation you keep asking for. Nixluva's posted tweet may have oversimplified but was still essentially correct. Banks did gamble with everyone's money. I have posted this here ad nauseam but you can google it too - there are no regulations that keep commercial banks from investing your funds into speculative investments anymore. They only have to keep a low percentage of it liquid.

United States Derivative Exposure
$300 Trillion ($300,000 Billions)

Derivatives are wild financial bets made by banks order to speculate or hedge risk,
ranging from stocks, bonds all the way to weather. In essence a casino-style bet.
The total notional derivative exposure of the top 25 holding companies is $297,514 Billion.
Notional means "a small amount of money controlling a large position"

Bank of America, Merrill Lynch, CitiBank and others have a massive derivative exposure and have moved its derivatives into FDIC insured accounts due to their downgraded credit ratings.
Bank of America alone moved $75 Trillion to FDIC insured accounts.


This is from the FDIC itself - derivatives activity at commercial Banks was already 5 times the GDP, 15 years ago

Summary

Derivatives activity at commercial banks, as measured by total notional values of over $56 trillion as of December 31, 2002, continues to grow dramatically. Derivatives serve an essential role in the U.S. and world economies but also present certain risks to the deposit insurance funds. This FYI explains what these risks are and describes how they are managed within commercial banking.

https://www.fdic.gov/bank/analytical/fyi/2003/032603fyi.html

I cannot teach anybody anything. I can only try to make them think - Socrates
TPercy
Posts: 24886
Alba Posts: 1
Joined: 2/5/2014
Member: #5748

12/10/2017  6:47 PM
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
nixluva wrote:
meloshouldgo wrote:
nixluva wrote:
arkrud wrote:Farther accumulating the wealth is very good.
This is the only way to make good use of it.
And I see it is used efficiently enough to move human civilization forward.
If we have more wealth in disposal of Masks, Jobs, Brins, and other like them, we will be better off.
As Russian poet and bard Visockiy wrote:
"I do not like Coliseums and Circus,
This is were millions are broken by dollar,
And even if we are for great disturbances,
I will never be in love with this"

Here's the thing, Corporations are at the point where they have so much money they don't know what to do with it. They aren't creating more jobs or paying more. The accumulation of more and more wealth isn't a good thing at a certain point.

The answer to this problem was simple but Powerful Wealthy individuals have bought the Government and fixed the rules so that most of the money goes to the top. That's not a good thing. There's no reason why this country hasn't taken on a massive project of rebuilding it's Infrastructure and Education so that the country could be ready for the future. The Rich have been all too happy to allow this country to ROT from the inside out. That is not a good thing.

This is the richest country in the world and yet we have HORRIBLE schools, roads, bridges, airports, rail and ports. WHY???

In the world of Arkrud, there's no need to create jobs, the poor deserve to be poor because they don't work hard and the rich should continue to accumulate wealth because it "moves civilization forward".

SMDH


Out of all the egregious crap that has been put in this thread, this is the one. I have no interest in getting back into it but I REALLY hate stupid **** like this. A huge reason why the recession happened was because the government loosened standards for down payments, pressured lenders to give "affordable" loans to people even they clearly weren't qualified for it. Unsprupsingly this drove up housing prices until their inevitable decline when the bubble burst.

The neolib that wants to deregulate everything also gets to criticize the government for "loosening standards" - the level of hypocrisy exhibited here is mindboggling. Somehow the it was the government that "pressured" lenders - wow just wow.


Come on man. You've never heard of the CRA? You have to be really stupid to ignore the governments role leading up to 2008.

Furthermore, no one(even though straw man "neo liberal" image you have of me) thinks predatory lending is a good thing. Unfortunately government loosened the standards for this that allowed for profit seekers make full use of predatory lending.

So do you want government regulation of financial markets or not?


If a ban regulation to protect borrwers from fraud consistitutes regulation then yes I am all for it.

Good to know - how about regulations to protect Americans from having banks invest their savings money in risky speculation that they may not even be able to make the margin call payments on? Are those bans ok?


Well the FDIC provides reinbursements of up 250k for insured deposits so I don't know what the point of those regulations would be.

The FDIC almost went bankrupt during 2008-2009 just to cover a handful of large banks that failed or nearly failed. But you think it's adequate protection for mainstream Americans and the banks they entrust their lifetime worth of savings to, should be allowed to use that money for speculation from which the banks will profit but if they go bad the FDIC and the taxpayers will hold the risk?

$25 Billion - FDIC - Federal Deposit Insurance Corporation Fund

FDIC insures 7,181 financial institutions. The FDIC is funded by financial institutions that pay for deposit insurance coverage.

During the 1980's/1990's savings and loan crisis, a parallel insurer- the FSLIC (Federal Savings and Loan Insurance Corporation) went bankrupt.
The FSLIC replacement named RTC was merged into the FDIC. The savings and loan crisis cost tax payers $150 Billion.

The FDIC takes control of failed banks and financial institutions, where it first moves to find a buyer of all the bank's assets, including the toxic ones. After the sale of assets (including toxic, usually at discounted prices) the FDIC attempts to cover losses. The FDIC will first pay-out all insured accounts, followed by
applying “hair-cuts” to uninsured deposits. Safe deposit boxes, bond holders, stocks, money funds, etc. are not insured by FDIC.

Due to bank failures during the 2008/2009 bank crisis, the FDIC fund fell to $0.648 billion by August of 2009. Subsequent bank failures almost bankrupted the FDIC
, so it demanded a 3 year pre-payment from banks to shore up its capital. Wikipedia - "According to the FDIC.gov website (as of March 2013), 'FDIC deposit insurance is backed
by the full faith and credit of the United States government.'"
This is less than clear, since there are no laws binding the U.S. government to make good on FDIC insurance liabilities.
The details of FDIC are found on Wikipedia | Source Wikipedia & ZeroHedge

The key part is that the FDIC didn't go bankrupt even though they were also covering uninsured liabilities that they had no obligation to in the first place. Besides this wouldn't be a topic had the government not implemented bad policies that caused the crisis in the first place.

The key part is the only reason the FDIC didn't go bankrupt is because the Govt. used billions of dollars of tax payer money to bail out the remaining large banks. They had 25 Billion on hand and were down to their last 650 Million.

Now to the other claim. Exactly what did the government do to force the banks into predatory lending?

For starters, Mutual and hedge funds and IB's are the financial institutions that engage in speculation, not commercial banks where savings are placed( unless you are working with a financial advisor or something). So unless you are a serious investor, ones savings arn't exactly backed up by "risky speculation" and you if choose to go that route through IB then that is the risk that you and your advisor takes. Commercial banks can however loan out money which is a very good thing for the economy. Furthermore, the government shouldn't have bailed out those big banks if you ask me, it just aggravated the crisis.


The government didn't force banks to use predatory lending;they encouraged it. Me and you agree that in the free market that everything is based on self interest, so when you loosen regualations regarding the types of loans and the bank knows they can get away with it, there is a chance they will engage in it. in 2004, the federal government overrode state laws that regulated morgtage credit and banks which basically incentivizies banks move to those states and engage in high risk loans that screws over their borrowers. Also HUD in the 90s set goals for private industry to give loans to low income families, even if they clearly could not afford it.

Predatory lending was just a part of the crisis. What happened in 2008 was very complex, hence the reason I snapped at Nixluva(a bit over the top admittedly) for at best eggregiously oversimplifying a crisis as "banks gambling everyones money" to contribute to his extreme narrative.

Come down to earth, have you? Changed from Government forced banks into predatory lending to "incentivized" - this is good at least you seem to be operating on a rational plane rather than pure hyperbole.

But your premise is still wrong - your words:

For starters, Mutual and hedge funds and IB's are the financial institutions that engage in speculation, not commercial banks where savings are placed


The distinction between Investment Banks and Commercial Banks(depository) died with the repeal of Glass Stegall over the years. This another benefit of the deregulation you keep asking for. Nixluva's posted tweet may have oversimplified but was still essentially correct. Banks did gamble with everyone's money. I have posted this here ad nauseam but you can google it too - there are no regulations that keep commercial banks from investing your funds into speculative investments anymore. They only have to keep a low percentage of it liquid.

United States Derivative Exposure
$300 Trillion ($300,000 Billions)

Derivatives are wild financial bets made by banks order to speculate or hedge risk,
ranging from stocks, bonds all the way to weather. In essence a casino-style bet.
The total notional derivative exposure of the top 25 holding companies is $297,514 Billion.
Notional means "a small amount of money controlling a large position"

Bank of America, Merrill Lynch, CitiBank and others have a massive derivative exposure and have moved its derivatives into FDIC insured accounts due to their downgraded credit ratings.
Bank of America alone moved $75 Trillion to FDIC insured accounts.


This is from the FDIC itself - derivatives activity at commercial Banks was already 5 times the GDP, 15 years ago

Summary

Derivatives activity at commercial banks, as measured by total notional values of over $56 trillion as of December 31, 2002, continues to grow dramatically. Derivatives serve an essential role in the U.S. and world economies but also present certain risks to the deposit insurance funds. This FYI explains what these risks are and describes how they are managed within commercial banking.

https://www.fdic.gov/bank/analytical/fyi/2003/032603fyi.html


I did make a mistake.

The first part of the article you cited makes derivatives look way worse than they actually seem. Using derivatives is a great way to diversify and reduce the risk of loans and other securities at the time. In an age where many loans were being made to people who couldn't pay those loans back( encourage by federal legislation like the CRA and the goals set by HUD), it is not surprising to me that derivatives were used a lot. So to answer your main question, yes, I would be fine with that;however, that wasn't the cause of the economic crisis. Commerical banks have been selling loans money long before the financial crisis. The process goes like this:

People deposit money into banks

Banks loan out money

Banks sell loans/mortgages to IBs(the ones who are doing the speculating)

Banks make money

The Future is Bright!
nixluva
Posts: 56240
Alba Posts: 0
Joined: 10/5/2004
Member: #758
USA
12/10/2017  7:28 PM
Foxes minding the Hen House!

meloshouldgo
Posts: 26166
Alba Posts: 0
Joined: 5/3/2014
Member: #5801

12/11/2017  2:04 PM
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
nixluva wrote:
meloshouldgo wrote:
nixluva wrote:
arkrud wrote:Farther accumulating the wealth is very good.
This is the only way to make good use of it.
And I see it is used efficiently enough to move human civilization forward.
If we have more wealth in disposal of Masks, Jobs, Brins, and other like them, we will be better off.
As Russian poet and bard Visockiy wrote:
"I do not like Coliseums and Circus,
This is were millions are broken by dollar,
And even if we are for great disturbances,
I will never be in love with this"

Here's the thing, Corporations are at the point where they have so much money they don't know what to do with it. They aren't creating more jobs or paying more. The accumulation of more and more wealth isn't a good thing at a certain point.

The answer to this problem was simple but Powerful Wealthy individuals have bought the Government and fixed the rules so that most of the money goes to the top. That's not a good thing. There's no reason why this country hasn't taken on a massive project of rebuilding it's Infrastructure and Education so that the country could be ready for the future. The Rich have been all too happy to allow this country to ROT from the inside out. That is not a good thing.

This is the richest country in the world and yet we have HORRIBLE schools, roads, bridges, airports, rail and ports. WHY???

In the world of Arkrud, there's no need to create jobs, the poor deserve to be poor because they don't work hard and the rich should continue to accumulate wealth because it "moves civilization forward".

SMDH


Out of all the egregious crap that has been put in this thread, this is the one. I have no interest in getting back into it but I REALLY hate stupid **** like this. A huge reason why the recession happened was because the government loosened standards for down payments, pressured lenders to give "affordable" loans to people even they clearly weren't qualified for it. Unsprupsingly this drove up housing prices until their inevitable decline when the bubble burst.

The neolib that wants to deregulate everything also gets to criticize the government for "loosening standards" - the level of hypocrisy exhibited here is mindboggling. Somehow the it was the government that "pressured" lenders - wow just wow.


Come on man. You've never heard of the CRA? You have to be really stupid to ignore the governments role leading up to 2008.

Furthermore, no one(even though straw man "neo liberal" image you have of me) thinks predatory lending is a good thing. Unfortunately government loosened the standards for this that allowed for profit seekers make full use of predatory lending.

So do you want government regulation of financial markets or not?


If a ban regulation to protect borrwers from fraud consistitutes regulation then yes I am all for it.

Good to know - how about regulations to protect Americans from having banks invest their savings money in risky speculation that they may not even be able to make the margin call payments on? Are those bans ok?


Well the FDIC provides reinbursements of up 250k for insured deposits so I don't know what the point of those regulations would be.

The FDIC almost went bankrupt during 2008-2009 just to cover a handful of large banks that failed or nearly failed. But you think it's adequate protection for mainstream Americans and the banks they entrust their lifetime worth of savings to, should be allowed to use that money for speculation from which the banks will profit but if they go bad the FDIC and the taxpayers will hold the risk?

$25 Billion - FDIC - Federal Deposit Insurance Corporation Fund

FDIC insures 7,181 financial institutions. The FDIC is funded by financial institutions that pay for deposit insurance coverage.

During the 1980's/1990's savings and loan crisis, a parallel insurer- the FSLIC (Federal Savings and Loan Insurance Corporation) went bankrupt.
The FSLIC replacement named RTC was merged into the FDIC. The savings and loan crisis cost tax payers $150 Billion.

The FDIC takes control of failed banks and financial institutions, where it first moves to find a buyer of all the bank's assets, including the toxic ones. After the sale of assets (including toxic, usually at discounted prices) the FDIC attempts to cover losses. The FDIC will first pay-out all insured accounts, followed by
applying “hair-cuts” to uninsured deposits. Safe deposit boxes, bond holders, stocks, money funds, etc. are not insured by FDIC.

Due to bank failures during the 2008/2009 bank crisis, the FDIC fund fell to $0.648 billion by August of 2009. Subsequent bank failures almost bankrupted the FDIC
, so it demanded a 3 year pre-payment from banks to shore up its capital. Wikipedia - "According to the FDIC.gov website (as of March 2013), 'FDIC deposit insurance is backed
by the full faith and credit of the United States government.'"
This is less than clear, since there are no laws binding the U.S. government to make good on FDIC insurance liabilities.
The details of FDIC are found on Wikipedia | Source Wikipedia & ZeroHedge

The key part is that the FDIC didn't go bankrupt even though they were also covering uninsured liabilities that they had no obligation to in the first place. Besides this wouldn't be a topic had the government not implemented bad policies that caused the crisis in the first place.

The key part is the only reason the FDIC didn't go bankrupt is because the Govt. used billions of dollars of tax payer money to bail out the remaining large banks. They had 25 Billion on hand and were down to their last 650 Million.

Now to the other claim. Exactly what did the government do to force the banks into predatory lending?

For starters, Mutual and hedge funds and IB's are the financial institutions that engage in speculation, not commercial banks where savings are placed( unless you are working with a financial advisor or something). So unless you are a serious investor, ones savings arn't exactly backed up by "risky speculation" and you if choose to go that route through IB then that is the risk that you and your advisor takes. Commercial banks can however loan out money which is a very good thing for the economy. Furthermore, the government shouldn't have bailed out those big banks if you ask me, it just aggravated the crisis.


The government didn't force banks to use predatory lending;they encouraged it. Me and you agree that in the free market that everything is based on self interest, so when you loosen regualations regarding the types of loans and the bank knows they can get away with it, there is a chance they will engage in it. in 2004, the federal government overrode state laws that regulated morgtage credit and banks which basically incentivizies banks move to those states and engage in high risk loans that screws over their borrowers. Also HUD in the 90s set goals for private industry to give loans to low income families, even if they clearly could not afford it.

Predatory lending was just a part of the crisis. What happened in 2008 was very complex, hence the reason I snapped at Nixluva(a bit over the top admittedly) for at best eggregiously oversimplifying a crisis as "banks gambling everyones money" to contribute to his extreme narrative.

Come down to earth, have you? Changed from Government forced banks into predatory lending to "incentivized" - this is good at least you seem to be operating on a rational plane rather than pure hyperbole.

But your premise is still wrong - your words:

For starters, Mutual and hedge funds and IB's are the financial institutions that engage in speculation, not commercial banks where savings are placed


The distinction between Investment Banks and Commercial Banks(depository) died with the repeal of Glass Stegall over the years. This another benefit of the deregulation you keep asking for. Nixluva's posted tweet may have oversimplified but was still essentially correct. Banks did gamble with everyone's money. I have posted this here ad nauseam but you can google it too - there are no regulations that keep commercial banks from investing your funds into speculative investments anymore. They only have to keep a low percentage of it liquid.

United States Derivative Exposure
$300 Trillion ($300,000 Billions)

Derivatives are wild financial bets made by banks order to speculate or hedge risk,
ranging from stocks, bonds all the way to weather. In essence a casino-style bet.
The total notional derivative exposure of the top 25 holding companies is $297,514 Billion.
Notional means "a small amount of money controlling a large position"

Bank of America, Merrill Lynch, CitiBank and others have a massive derivative exposure and have moved its derivatives into FDIC insured accounts due to their downgraded credit ratings.
Bank of America alone moved $75 Trillion to FDIC insured accounts.


This is from the FDIC itself - derivatives activity at commercial Banks was already 5 times the GDP, 15 years ago

Summary

Derivatives activity at commercial banks, as measured by total notional values of over $56 trillion as of December 31, 2002, continues to grow dramatically. Derivatives serve an essential role in the U.S. and world economies but also present certain risks to the deposit insurance funds. This FYI explains what these risks are and describes how they are managed within commercial banking.

https://www.fdic.gov/bank/analytical/fyi/2003/032603fyi.html


I did make a mistake.

The first part of the article you cited makes derivatives look way worse than they actually seem. Using derivatives is a great way to diversify and reduce the risk of loans and other securities at the time. In an age where many loans were being made to people who couldn't pay those loans back( encourage by federal legislation like the CRA and the goals set by HUD), it is not surprising to me that derivatives were used a lot. So to answer your main question, yes, I would be fine with that;however, that wasn't the cause of the economic crisis. Commerical banks have been selling loans money long before the financial crisis. The process goes like this:

People deposit money into banks

Banks loan out money

Banks sell loans/mortgages to IBs(the ones who are doing the speculating)

Banks make money

Major oversimplification banks do a lot more than just lend money and sell the loans. A lot of them act as insurance broker for each other's loans. They take bets on which loans with default etc. All of that is done through derivatives and it carries a good deal of risk. You are hung up on commercial banks not making speculative investments but the data doesn't bear that out.

I cannot teach anybody anything. I can only try to make them think - Socrates
TPercy
Posts: 24886
Alba Posts: 1
Joined: 2/5/2014
Member: #5748

12/11/2017  2:56 PM    LAST EDITED: 12/11/2017  2:59 PM
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
nixluva wrote:
meloshouldgo wrote:
nixluva wrote:
arkrud wrote:Farther accumulating the wealth is very good.
This is the only way to make good use of it.
And I see it is used efficiently enough to move human civilization forward.
If we have more wealth in disposal of Masks, Jobs, Brins, and other like them, we will be better off.
As Russian poet and bard Visockiy wrote:
"I do not like Coliseums and Circus,
This is were millions are broken by dollar,
And even if we are for great disturbances,
I will never be in love with this"

Here's the thing, Corporations are at the point where they have so much money they don't know what to do with it. They aren't creating more jobs or paying more. The accumulation of more and more wealth isn't a good thing at a certain point.

The answer to this problem was simple but Powerful Wealthy individuals have bought the Government and fixed the rules so that most of the money goes to the top. That's not a good thing. There's no reason why this country hasn't taken on a massive project of rebuilding it's Infrastructure and Education so that the country could be ready for the future. The Rich have been all too happy to allow this country to ROT from the inside out. That is not a good thing.

This is the richest country in the world and yet we have HORRIBLE schools, roads, bridges, airports, rail and ports. WHY???

In the world of Arkrud, there's no need to create jobs, the poor deserve to be poor because they don't work hard and the rich should continue to accumulate wealth because it "moves civilization forward".

SMDH


Out of all the egregious crap that has been put in this thread, this is the one. I have no interest in getting back into it but I REALLY hate stupid **** like this. A huge reason why the recession happened was because the government loosened standards for down payments, pressured lenders to give "affordable" loans to people even they clearly weren't qualified for it. Unsprupsingly this drove up housing prices until their inevitable decline when the bubble burst.

The neolib that wants to deregulate everything also gets to criticize the government for "loosening standards" - the level of hypocrisy exhibited here is mindboggling. Somehow the it was the government that "pressured" lenders - wow just wow.


Come on man. You've never heard of the CRA? You have to be really stupid to ignore the governments role leading up to 2008.

Furthermore, no one(even though straw man "neo liberal" image you have of me) thinks predatory lending is a good thing. Unfortunately government loosened the standards for this that allowed for profit seekers make full use of predatory lending.

So do you want government regulation of financial markets or not?


If a ban regulation to protect borrwers from fraud consistitutes regulation then yes I am all for it.

Good to know - how about regulations to protect Americans from having banks invest their savings money in risky speculation that they may not even be able to make the margin call payments on? Are those bans ok?


Well the FDIC provides reinbursements of up 250k for insured deposits so I don't know what the point of those regulations would be.

The FDIC almost went bankrupt during 2008-2009 just to cover a handful of large banks that failed or nearly failed. But you think it's adequate protection for mainstream Americans and the banks they entrust their lifetime worth of savings to, should be allowed to use that money for speculation from which the banks will profit but if they go bad the FDIC and the taxpayers will hold the risk?

$25 Billion - FDIC - Federal Deposit Insurance Corporation Fund

FDIC insures 7,181 financial institutions. The FDIC is funded by financial institutions that pay for deposit insurance coverage.

During the 1980's/1990's savings and loan crisis, a parallel insurer- the FSLIC (Federal Savings and Loan Insurance Corporation) went bankrupt.
The FSLIC replacement named RTC was merged into the FDIC. The savings and loan crisis cost tax payers $150 Billion.

The FDIC takes control of failed banks and financial institutions, where it first moves to find a buyer of all the bank's assets, including the toxic ones. After the sale of assets (including toxic, usually at discounted prices) the FDIC attempts to cover losses. The FDIC will first pay-out all insured accounts, followed by
applying “hair-cuts” to uninsured deposits. Safe deposit boxes, bond holders, stocks, money funds, etc. are not insured by FDIC.

Due to bank failures during the 2008/2009 bank crisis, the FDIC fund fell to $0.648 billion by August of 2009. Subsequent bank failures almost bankrupted the FDIC
, so it demanded a 3 year pre-payment from banks to shore up its capital. Wikipedia - "According to the FDIC.gov website (as of March 2013), 'FDIC deposit insurance is backed
by the full faith and credit of the United States government.'"
This is less than clear, since there are no laws binding the U.S. government to make good on FDIC insurance liabilities.
The details of FDIC are found on Wikipedia | Source Wikipedia & ZeroHedge

The key part is that the FDIC didn't go bankrupt even though they were also covering uninsured liabilities that they had no obligation to in the first place. Besides this wouldn't be a topic had the government not implemented bad policies that caused the crisis in the first place.

The key part is the only reason the FDIC didn't go bankrupt is because the Govt. used billions of dollars of tax payer money to bail out the remaining large banks. They had 25 Billion on hand and were down to their last 650 Million.

Now to the other claim. Exactly what did the government do to force the banks into predatory lending?

For starters, Mutual and hedge funds and IB's are the financial institutions that engage in speculation, not commercial banks where savings are placed( unless you are working with a financial advisor or something). So unless you are a serious investor, ones savings arn't exactly backed up by "risky speculation" and you if choose to go that route through IB then that is the risk that you and your advisor takes. Commercial banks can however loan out money which is a very good thing for the economy. Furthermore, the government shouldn't have bailed out those big banks if you ask me, it just aggravated the crisis.


The government didn't force banks to use predatory lending;they encouraged it. Me and you agree that in the free market that everything is based on self interest, so when you loosen regualations regarding the types of loans and the bank knows they can get away with it, there is a chance they will engage in it. in 2004, the federal government overrode state laws that regulated morgtage credit and banks which basically incentivizies banks move to those states and engage in high risk loans that screws over their borrowers. Also HUD in the 90s set goals for private industry to give loans to low income families, even if they clearly could not afford it.

Predatory lending was just a part of the crisis. What happened in 2008 was very complex, hence the reason I snapped at Nixluva(a bit over the top admittedly) for at best eggregiously oversimplifying a crisis as "banks gambling everyones money" to contribute to his extreme narrative.

Come down to earth, have you? Changed from Government forced banks into predatory lending to "incentivized" - this is good at least you seem to be operating on a rational plane rather than pure hyperbole.

But your premise is still wrong - your words:

For starters, Mutual and hedge funds and IB's are the financial institutions that engage in speculation, not commercial banks where savings are placed


The distinction between Investment Banks and Commercial Banks(depository) died with the repeal of Glass Stegall over the years. This another benefit of the deregulation you keep asking for. Nixluva's posted tweet may have oversimplified but was still essentially correct. Banks did gamble with everyone's money. I have posted this here ad nauseam but you can google it too - there are no regulations that keep commercial banks from investing your funds into speculative investments anymore. They only have to keep a low percentage of it liquid.

United States Derivative Exposure
$300 Trillion ($300,000 Billions)

Derivatives are wild financial bets made by banks order to speculate or hedge risk,
ranging from stocks, bonds all the way to weather. In essence a casino-style bet.
The total notional derivative exposure of the top 25 holding companies is $297,514 Billion.
Notional means "a small amount of money controlling a large position"

Bank of America, Merrill Lynch, CitiBank and others have a massive derivative exposure and have moved its derivatives into FDIC insured accounts due to their downgraded credit ratings.
Bank of America alone moved $75 Trillion to FDIC insured accounts.


This is from the FDIC itself - derivatives activity at commercial Banks was already 5 times the GDP, 15 years ago

Summary

Derivatives activity at commercial banks, as measured by total notional values of over $56 trillion as of December 31, 2002, continues to grow dramatically. Derivatives serve an essential role in the U.S. and world economies but also present certain risks to the deposit insurance funds. This FYI explains what these risks are and describes how they are managed within commercial banking.

https://www.fdic.gov/bank/analytical/fyi/2003/032603fyi.html


I did make a mistake.

The first part of the article you cited makes derivatives look way worse than they actually seem. Using derivatives is a great way to diversify and reduce the risk of loans and other securities at the time. In an age where many loans were being made to people who couldn't pay those loans back( encourage by federal legislation like the CRA and the goals set by HUD), it is not surprising to me that derivatives were used a lot. So to answer your main question, yes, I would be fine with that;however, that wasn't the cause of the economic crisis. Commerical banks have been selling loans money long before the financial crisis. The process goes like this:

People deposit money into banks

Banks loan out money

Banks sell loans/mortgages to IBs(the ones who are doing the speculating)

Banks make money

Major oversimplification banks do a lot more than just lend money and sell the loans. A lot of them act as insurance broker for each other's loans. They take bets on which loans with default etc. All of that is done through derivatives and it carries a good deal of risk. You are hung up on commercial banks not making speculative investments but the data doesn't bear that out.

No I am saying that banks arent technically making speculative investments but it's what you think it is. I'm not disputing the data either I'm saying there is a lot of context you are leaving out. A major derivative were MBS's that came into prominence because of the amount of loans that was being made at the time. Derivatives do have risk but they are a way to mitigate risks. As I said the activities you are describing have been happening for a very long time and wasn't the reason to market crashed.

The Future is Bright!
meloshouldgo
Posts: 26166
Alba Posts: 0
Joined: 5/3/2014
Member: #5801

12/11/2017  6:16 PM
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
nixluva wrote:
meloshouldgo wrote:
nixluva wrote:
arkrud wrote:Farther accumulating the wealth is very good.
This is the only way to make good use of it.
And I see it is used efficiently enough to move human civilization forward.
If we have more wealth in disposal of Masks, Jobs, Brins, and other like them, we will be better off.
As Russian poet and bard Visockiy wrote:
"I do not like Coliseums and Circus,
This is were millions are broken by dollar,
And even if we are for great disturbances,
I will never be in love with this"

Here's the thing, Corporations are at the point where they have so much money they don't know what to do with it. They aren't creating more jobs or paying more. The accumulation of more and more wealth isn't a good thing at a certain point.

The answer to this problem was simple but Powerful Wealthy individuals have bought the Government and fixed the rules so that most of the money goes to the top. That's not a good thing. There's no reason why this country hasn't taken on a massive project of rebuilding it's Infrastructure and Education so that the country could be ready for the future. The Rich have been all too happy to allow this country to ROT from the inside out. That is not a good thing.

This is the richest country in the world and yet we have HORRIBLE schools, roads, bridges, airports, rail and ports. WHY???

In the world of Arkrud, there's no need to create jobs, the poor deserve to be poor because they don't work hard and the rich should continue to accumulate wealth because it "moves civilization forward".

SMDH


Out of all the egregious crap that has been put in this thread, this is the one. I have no interest in getting back into it but I REALLY hate stupid **** like this. A huge reason why the recession happened was because the government loosened standards for down payments, pressured lenders to give "affordable" loans to people even they clearly weren't qualified for it. Unsprupsingly this drove up housing prices until their inevitable decline when the bubble burst.

The neolib that wants to deregulate everything also gets to criticize the government for "loosening standards" - the level of hypocrisy exhibited here is mindboggling. Somehow the it was the government that "pressured" lenders - wow just wow.


Come on man. You've never heard of the CRA? You have to be really stupid to ignore the governments role leading up to 2008.

Furthermore, no one(even though straw man "neo liberal" image you have of me) thinks predatory lending is a good thing. Unfortunately government loosened the standards for this that allowed for profit seekers make full use of predatory lending.

So do you want government regulation of financial markets or not?


If a ban regulation to protect borrwers from fraud consistitutes regulation then yes I am all for it.

Good to know - how about regulations to protect Americans from having banks invest their savings money in risky speculation that they may not even be able to make the margin call payments on? Are those bans ok?


Well the FDIC provides reinbursements of up 250k for insured deposits so I don't know what the point of those regulations would be.

The FDIC almost went bankrupt during 2008-2009 just to cover a handful of large banks that failed or nearly failed. But you think it's adequate protection for mainstream Americans and the banks they entrust their lifetime worth of savings to, should be allowed to use that money for speculation from which the banks will profit but if they go bad the FDIC and the taxpayers will hold the risk?

$25 Billion - FDIC - Federal Deposit Insurance Corporation Fund

FDIC insures 7,181 financial institutions. The FDIC is funded by financial institutions that pay for deposit insurance coverage.

During the 1980's/1990's savings and loan crisis, a parallel insurer- the FSLIC (Federal Savings and Loan Insurance Corporation) went bankrupt.
The FSLIC replacement named RTC was merged into the FDIC. The savings and loan crisis cost tax payers $150 Billion.

The FDIC takes control of failed banks and financial institutions, where it first moves to find a buyer of all the bank's assets, including the toxic ones. After the sale of assets (including toxic, usually at discounted prices) the FDIC attempts to cover losses. The FDIC will first pay-out all insured accounts, followed by
applying “hair-cuts” to uninsured deposits. Safe deposit boxes, bond holders, stocks, money funds, etc. are not insured by FDIC.

Due to bank failures during the 2008/2009 bank crisis, the FDIC fund fell to $0.648 billion by August of 2009. Subsequent bank failures almost bankrupted the FDIC
, so it demanded a 3 year pre-payment from banks to shore up its capital. Wikipedia - "According to the FDIC.gov website (as of March 2013), 'FDIC deposit insurance is backed
by the full faith and credit of the United States government.'"
This is less than clear, since there are no laws binding the U.S. government to make good on FDIC insurance liabilities.
The details of FDIC are found on Wikipedia | Source Wikipedia & ZeroHedge

The key part is that the FDIC didn't go bankrupt even though they were also covering uninsured liabilities that they had no obligation to in the first place. Besides this wouldn't be a topic had the government not implemented bad policies that caused the crisis in the first place.

The key part is the only reason the FDIC didn't go bankrupt is because the Govt. used billions of dollars of tax payer money to bail out the remaining large banks. They had 25 Billion on hand and were down to their last 650 Million.

Now to the other claim. Exactly what did the government do to force the banks into predatory lending?

For starters, Mutual and hedge funds and IB's are the financial institutions that engage in speculation, not commercial banks where savings are placed( unless you are working with a financial advisor or something). So unless you are a serious investor, ones savings arn't exactly backed up by "risky speculation" and you if choose to go that route through IB then that is the risk that you and your advisor takes. Commercial banks can however loan out money which is a very good thing for the economy. Furthermore, the government shouldn't have bailed out those big banks if you ask me, it just aggravated the crisis.


The government didn't force banks to use predatory lending;they encouraged it. Me and you agree that in the free market that everything is based on self interest, so when you loosen regualations regarding the types of loans and the bank knows they can get away with it, there is a chance they will engage in it. in 2004, the federal government overrode state laws that regulated morgtage credit and banks which basically incentivizies banks move to those states and engage in high risk loans that screws over their borrowers. Also HUD in the 90s set goals for private industry to give loans to low income families, even if they clearly could not afford it.

Predatory lending was just a part of the crisis. What happened in 2008 was very complex, hence the reason I snapped at Nixluva(a bit over the top admittedly) for at best eggregiously oversimplifying a crisis as "banks gambling everyones money" to contribute to his extreme narrative.

Come down to earth, have you? Changed from Government forced banks into predatory lending to "incentivized" - this is good at least you seem to be operating on a rational plane rather than pure hyperbole.

But your premise is still wrong - your words:

For starters, Mutual and hedge funds and IB's are the financial institutions that engage in speculation, not commercial banks where savings are placed


The distinction between Investment Banks and Commercial Banks(depository) died with the repeal of Glass Stegall over the years. This another benefit of the deregulation you keep asking for. Nixluva's posted tweet may have oversimplified but was still essentially correct. Banks did gamble with everyone's money. I have posted this here ad nauseam but you can google it too - there are no regulations that keep commercial banks from investing your funds into speculative investments anymore. They only have to keep a low percentage of it liquid.

United States Derivative Exposure
$300 Trillion ($300,000 Billions)

Derivatives are wild financial bets made by banks order to speculate or hedge risk,
ranging from stocks, bonds all the way to weather. In essence a casino-style bet.
The total notional derivative exposure of the top 25 holding companies is $297,514 Billion.
Notional means "a small amount of money controlling a large position"

Bank of America, Merrill Lynch, CitiBank and others have a massive derivative exposure and have moved its derivatives into FDIC insured accounts due to their downgraded credit ratings.
Bank of America alone moved $75 Trillion to FDIC insured accounts.


This is from the FDIC itself - derivatives activity at commercial Banks was already 5 times the GDP, 15 years ago

Summary

Derivatives activity at commercial banks, as measured by total notional values of over $56 trillion as of December 31, 2002, continues to grow dramatically. Derivatives serve an essential role in the U.S. and world economies but also present certain risks to the deposit insurance funds. This FYI explains what these risks are and describes how they are managed within commercial banking.

https://www.fdic.gov/bank/analytical/fyi/2003/032603fyi.html


I did make a mistake.

The first part of the article you cited makes derivatives look way worse than they actually seem. Using derivatives is a great way to diversify and reduce the risk of loans and other securities at the time. In an age where many loans were being made to people who couldn't pay those loans back( encourage by federal legislation like the CRA and the goals set by HUD), it is not surprising to me that derivatives were used a lot. So to answer your main question, yes, I would be fine with that;however, that wasn't the cause of the economic crisis. Commerical banks have been selling loans money long before the financial crisis. The process goes like this:

People deposit money into banks

Banks loan out money

Banks sell loans/mortgages to IBs(the ones who are doing the speculating)

Banks make money

Major oversimplification banks do a lot more than just lend money and sell the loans. A lot of them act as insurance broker for each other's loans. They take bets on which loans with default etc. All of that is done through derivatives and it carries a good deal of risk. You are hung up on commercial banks not making speculative investments but the data doesn't bear that out.

No I am saying that banks arent technically making speculative investments but it's what you think it is. I'm not disputing the data either I'm saying there is a lot of context you are leaving out. A major derivative were MBS's that came into prominence because of the amount of loans that was being made at the time. Derivatives do have risk but they are a way to mitigate risks. As I said the activities you are describing have been happening for a very long time and wasn't the reason to market crashed.

TWO THINGS

Firstly - I didn't say the speculation by the banks caused the crash - rather it caused the BUBBLE
Secondly - I am not defending deregulation - I actually want more regulation not less. But to blame the crisis on deregulation is naive or willfully ignorant especially if it's done in a way that defects blame away from the banks.


The actions that were happening for a long time is why the Real Estate bubble was inflated in the first place. Because the lenders weren't content with lending they wanted to multiply their profits by monetizing the mortgages further through leverage and speculation. THAT is why we had a bubble - and when you have a bubble it will eventually crash with or without subprime mortgages.

Commercial banks were absolutely in the speculation game and had huge short positions on credit Default swaps. MBS is not the ONLY type of derivative they transacted in.

The original intent of CDS was to mitigate risks. That was before they went from being insurance policies to being shorts and a means to multiply profits through speculation - they became the equivalent of stock options on the MBS. If you think stock options are not speculative - I don't know what to say.

MBS was initially risk mitigation as well - before the banks and the crooked rating agencies they pay for decided to issue AAA ratings to every single tranche that was originally rated BB or below, so they could continue to game the system. The source of the corruptions were banks and private agencies the deregulation played a role in it but is definitely not the key reason the market crashed.

Markets crash primarily because of fear and greed neither of those came from the government. Whole thesis have been written on the role of subprime mortgages because it was convenient for the banking sector to point fingers at the government. But do you realize the number of prime mortgages that defaulted was far more than the number of subprime mortgages that defaulted? How is the government action responsible for those? On a percentage basis more subprime loans defaulted but a percentage basis is useless to banks who are looking at the total dollar amount of bad debt on their books - on that metric prime mortgages accounted for more bad debt than sub-primes did.

http://fortune.com/2015/06/17/subprime-mortgage-recession/

Now I have spend way too much time on this back and forth and would like to move on. Peace out.

I cannot teach anybody anything. I can only try to make them think - Socrates
ekstarks94
Posts: 20569
Alba Posts: 0
Joined: 7/5/2015
Member: #6104

12/12/2017  4:49 AM    LAST EDITED: 12/12/2017  4:55 AM
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
meloshouldgo wrote:
TPercy wrote:
nixluva wrote:
meloshouldgo wrote:
nixluva wrote:
arkrud wrote:Farther accumulating the wealth is very good.
This is the only way to make good use of it.
And I see it is used efficiently enough to move human civilization forward.
If we have more wealth in disposal of Masks, Jobs, Brins, and other like them, we will be better off.
As Russian poet and bard Visockiy wrote:
"I do not like Coliseums and Circus,
This is were millions are broken by dollar,
And even if we are for great disturbances,
I will never be in love with this"

Here's the thing, Corporations are at the point where they have so much money they don't know what to do with it. They aren't creating more jobs or paying more. The accumulation of more and more wealth isn't a good thing at a certain point.

The answer to this problem was simple but Powerful Wealthy individuals have bought the Government and fixed the rules so that most of the money goes to the top. That's not a good thing. There's no reason why this country hasn't taken on a massive project of rebuilding it's Infrastructure and Education so that the country could be ready for the future. The Rich have been all too happy to allow this country to ROT from the inside out. That is not a good thing.

This is the richest country in the world and yet we have HORRIBLE schools, roads, bridges, airports, rail and ports. WHY???

In the world of Arkrud, there's no need to create jobs, the poor deserve to be poor because they don't work hard and the rich should continue to accumulate wealth because it "moves civilization forward".

SMDH


Out of all the egregious crap that has been put in this thread, this is the one. I have no interest in getting back into it but I REALLY hate stupid **** like this. A huge reason why the recession happened was because the government loosened standards for down payments, pressured lenders to give "affordable" loans to people even they clearly weren't qualified for it. Unsprupsingly this drove up housing prices until their inevitable decline when the bubble burst.

The neolib that wants to deregulate everything also gets to criticize the government for "loosening standards" - the level of hypocrisy exhibited here is mindboggling. Somehow the it was the government that "pressured" lenders - wow just wow.


Come on man. You've never heard of the CRA? You have to be really stupid to ignore the governments role leading up to 2008.

Furthermore, no one(even though straw man "neo liberal" image you have of me) thinks predatory lending is a good thing. Unfortunately government loosened the standards for this that allowed for profit seekers make full use of predatory lending.

So do you want government regulation of financial markets or not?


If a ban regulation to protect borrwers from fraud consistitutes regulation then yes I am all for it.

Good to know - how about regulations to protect Americans from having banks invest their savings money in risky speculation that they may not even be able to make the margin call payments on? Are those bans ok?


Well the FDIC provides reinbursements of up 250k for insured deposits so I don't know what the point of those regulations would be.

The FDIC almost went bankrupt during 2008-2009 just to cover a handful of large banks that failed or nearly failed. But you think it's adequate protection for mainstream Americans and the banks they entrust their lifetime worth of savings to, should be allowed to use that money for speculation from which the banks will profit but if they go bad the FDIC and the taxpayers will hold the risk?

$25 Billion - FDIC - Federal Deposit Insurance Corporation Fund

FDIC insures 7,181 financial institutions. The FDIC is funded by financial institutions that pay for deposit insurance coverage.

During the 1980's/1990's savings and loan crisis, a parallel insurer- the FSLIC (Federal Savings and Loan Insurance Corporation) went bankrupt.
The FSLIC replacement named RTC was merged into the FDIC. The savings and loan crisis cost tax payers $150 Billion.

The FDIC takes control of failed banks and financial institutions, where it first moves to find a buyer of all the bank's assets, including the toxic ones. After the sale of assets (including toxic, usually at discounted prices) the FDIC attempts to cover losses. The FDIC will first pay-out all insured accounts, followed by
applying “hair-cuts” to uninsured deposits. Safe deposit boxes, bond holders, stocks, money funds, etc. are not insured by FDIC.

Due to bank failures during the 2008/2009 bank crisis, the FDIC fund fell to $0.648 billion by August of 2009. Subsequent bank failures almost bankrupted the FDIC
, so it demanded a 3 year pre-payment from banks to shore up its capital. Wikipedia - "According to the FDIC.gov website (as of March 2013), 'FDIC deposit insurance is backed
by the full faith and credit of the United States government.'"
This is less than clear, since there are no laws binding the U.S. government to make good on FDIC insurance liabilities.
The details of FDIC are found on Wikipedia | Source Wikipedia & ZeroHedge

The key part is that the FDIC didn't go bankrupt even though they were also covering uninsured liabilities that they had no obligation to in the first place. Besides this wouldn't be a topic had the government not implemented bad policies that caused the crisis in the first place.

The key part is the only reason the FDIC didn't go bankrupt is because the Govt. used billions of dollars of tax payer money to bail out the remaining large banks. They had 25 Billion on hand and were down to their last 650 Million.

Now to the other claim. Exactly what did the government do to force the banks into predatory lending?

For starters, Mutual and hedge funds and IB's are the financial institutions that engage in speculation, not commercial banks where savings are placed( unless you are working with a financial advisor or something). So unless you are a serious investor, ones savings arn't exactly backed up by "risky speculation" and you if choose to go that route through IB then that is the risk that you and your advisor takes. Commercial banks can however loan out money which is a very good thing for the economy. Furthermore, the government shouldn't have bailed out those big banks if you ask me, it just aggravated the crisis.


The government didn't force banks to use predatory lending;they encouraged it. Me and you agree that in the free market that everything is based on self interest, so when you loosen regualations regarding the types of loans and the bank knows they can get away with it, there is a chance they will engage in it. in 2004, the federal government overrode state laws that regulated morgtage credit and banks which basically incentivizies banks move to those states and engage in high risk loans that screws over their borrowers. Also HUD in the 90s set goals for private industry to give loans to low income families, even if they clearly could not afford it.

Predatory lending was just a part of the crisis. What happened in 2008 was very complex, hence the reason I snapped at Nixluva(a bit over the top admittedly) for at best eggregiously oversimplifying a crisis as "banks gambling everyones money" to contribute to his extreme narrative.

Come down to earth, have you? Changed from Government forced banks into predatory lending to "incentivized" - this is good at least you seem to be operating on a rational plane rather than pure hyperbole.

But your premise is still wrong - your words:

For starters, Mutual and hedge funds and IB's are the financial institutions that engage in speculation, not commercial banks where savings are placed


The distinction between Investment Banks and Commercial Banks(depository) died with the repeal of Glass Stegall over the years. This another benefit of the deregulation you keep asking for. Nixluva's posted tweet may have oversimplified but was still essentially correct. Banks did gamble with everyone's money. I have posted this here ad nauseam but you can google it too - there are no regulations that keep commercial banks from investing your funds into speculative investments anymore. They only have to keep a low percentage of it liquid.

United States Derivative Exposure
$300 Trillion ($300,000 Billions)

Derivatives are wild financial bets made by banks order to speculate or hedge risk,
ranging from stocks, bonds all the way to weather. In essence a casino-style bet.
The total notional derivative exposure of the top 25 holding companies is $297,514 Billion.
Notional means "a small amount of money controlling a large position"

Bank of America, Merrill Lynch, CitiBank and others have a massive derivative exposure and have moved its derivatives into FDIC insured accounts due to their downgraded credit ratings.
Bank of America alone moved $75 Trillion to FDIC insured accounts.


This is from the FDIC itself - derivatives activity at commercial Banks was already 5 times the GDP, 15 years ago

Summary

Derivatives activity at commercial banks, as measured by total notional values of over $56 trillion as of December 31, 2002, continues to grow dramatically. Derivatives serve an essential role in the U.S. and world economies but also present certain risks to the deposit insurance funds. This FYI explains what these risks are and describes how they are managed within commercial banking.

https://www.fdic.gov/bank/analytical/fyi/2003/032603fyi.html


I did make a mistake.

The first part of the article you cited makes derivatives look way worse than they actually seem. Using derivatives is a great way to diversify and reduce the risk of loans and other securities at the time. In an age where many loans were being made to people who couldn't pay those loans back( encourage by federal legislation like the CRA and the goals set by HUD), it is not surprising to me that derivatives were used a lot. So to answer your main question, yes, I would be fine with that;however, that wasn't the cause of the economic crisis. Commerical banks have been selling loans money long before the financial crisis. The process goes like this:

People deposit money into banks

Banks loan out money

Banks sell loans/mortgages to IBs(the ones who are doing the speculating)

Banks make money

Major oversimplification banks do a lot more than just lend money and sell the loans. A lot of them act as insurance broker for each other's loans. They take bets on which loans with default etc. All of that is done through derivatives and it carries a good deal of risk. You are hung up on commercial banks not making speculative investments but the data doesn't bear that out.

No I am saying that banks arent technically making speculative investments but it's what you think it is. I'm not disputing the data either I'm saying there is a lot of context you are leaving out. A major derivative were MBS's that came into prominence because of the amount of loans that was being made at the time. Derivatives do have risk but they are a way to mitigate risks. As I said the activities you are describing have been happening for a very long time and wasn't the reason to market crashed.

TWO THINGS

Firstly - I didn't say the speculation by the banks caused the crash - rather it caused the BUBBLE
Secondly - I am not defending deregulation - I actually want more regulation not less. But to blame the crisis on deregulation is naive or willfully ignorant especially if it's done in a way that defects blame away from the banks.


The actions that were happening for a long time is why the Real Estate bubble was inflated in the first place. Because the lenders weren't content with lending they wanted to multiply their profits by monetizing the mortgages further through leverage and speculation. THAT is why we had a bubble - and when you have a bubble it will eventually crash with or without subprime mortgages.

Commercial banks were absolutely in the speculation game and had huge short positions on credit Default swaps. MBS is not the ONLY type of derivative they transacted in.

The original intent of CDS was to mitigate risks. That was before they went from being insurance policies to being shorts and a means to multiply profits through speculation - they became the equivalent of stock options on the MBS. If you think stock options are not speculative - I don't know what to say.

MBS was initially risk mitigation as well - before the banks and the crooked rating agencies they pay for decided to issue AAA ratings to every single tranche that was originally rated BB or below, so they could continue to game the system. The source of the corruptions were banks and private agencies the deregulation played a role in it but is definitely not the key reason the market crashed.

Markets crash primarily because of fear and greed neither of those came from the government. Whole thesis have been written on the role of subprime mortgages because it was convenient for the banking sector to point fingers at the government. But do you realize the number of prime mortgages that defaulted was far more than the number of subprime mortgages that defaulted? How is the government action responsible for those? On a percentage basis more subprime loans defaulted but a percentage basis is useless to banks who are looking at the total dollar amount of bad debt on their books - on that metric prime mortgages accounted for more bad debt than sub-primes did.

http://fortune.com/2015/06/17/subprime-mortgage-recession/

Now I have spend way too much time on this back and forth and would like to move on. Peace out.

Markets crashed in 2008 because in a surburb of Tampa Fl called Valrico you had a gated community where 75% of the homeowners were teachers, firefighters, or policemen. Almost guaranteed making under 50K....the cheapest home was $387K.....the community was less than 1 1/2 old....

So tell me how in the **** can someone making 50K afford ha home like that long term...ANSWER CHUCK: They can't...."but the bank told me i can get this nice adjustable rate deal and afford my dream home"

Lax regulations on lending fueled the sub prime beast.....

So I say from someone who was on the ground seeing the issue 3 years before it happened....when you have an area with wage stagnation but property prices are thru the roof...driven in part by speculators who drive up demand and people are forced to use any "safe" method that bank says so to buy a home...although they did not realize that their payment would ballon 200% and they end up going into foreclosure because the house they bought for 400k can now only fetch 200k..

This happened all over the damn country.....and MFers who had loot got spooked....products like NINJA loans are some of **** that caused problem....when I bought my first home we had to go into the bank and meet with the mortgage broker....when I bought my property in Fl years later during the run up...**** I got my mortgage on the internet.....

meloshouldgo
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12/12/2017  6:32 AM    LAST EDITED: 12/12/2017  6:41 AM
Predatory lending by the banks was well documented and was not being debated. Actually the whole Crux of my argument was the banks and the rating agencies along with sheer stupidity of the consumers were equally or in some cases more responsible for creating the bubble and it's eventual popping than the act of deregulation.

I wasn't arguing in favor of the banks, I was arguing that deregulation and political influence didn't cause the crisis by itself and that the role it played was being grossly exaggerated by TPercy.

But I am not going to get into this again.

I cannot teach anybody anything. I can only try to make them think - Socrates
ekstarks94
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12/12/2017  6:44 AM
meloshouldgo wrote:Predatory lending by the banks was well documented and was not being debated. Actually the whole Crux of my argument was the banks and the rating agencies along with sheer stupidity of the consumers were equally or in some cases more responsible for creating the bubble and it's eventual popping than the act of deregulation.

I wasn't arguing in favor of the banks, I was arguing that deregulation and political influence didn't cause the crisis by itself and that the role it played was being grossly exaggerated by TPercy.

But I am not going to get into this again.

Agreed...

nixluva
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12/14/2017  7:51 PM
nixluva
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12/16/2017  11:02 AM

nixluva
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12/17/2017  1:03 PM
nixluva
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12/17/2017  7:00 PM
OT: The American middle class just got their goose cooked

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