I didn't make it far enough to actually see what he was saying. I skipped around until he started comparing Ireland's woes to the Fed's monetary policy since 2008.
The way I'm reading this, Bank of America has some risky derivatives that are likely to go bad (I have a poor understanding of derivatives and how to talk about them), and they've moved the risk from the investment part of their bank to the depository part of their bank so that in the event that they lose money on these derivatives they can use leverage from the depositors money to pay for them?
According to the Young Turks these derivatives are worth significantly more than the bank itself. Wouldn't the bank failing have drastic effects on the economy, and doesn't it seem that based on this information that is a likely scenario?
The way I'm reading this, Bank of America has some risky derivatives that are likely to go bad (I have a poor understanding of derivatives and how to talk about them), and they've moved the risk from the investment part of their bank to the depository part of their bank so that in the event that they lose money on these derivatives they can use leverage from the depositors money to pay for them?
According to the Young Turks these derivatives are worth significantly more than the bank itself. Wouldn't the bank failing have drastic effects on the economy, and doesn't it seem that based on this information that is a likely scenario?
As an aside: Young Turks are heavily partisan without really (from my own layman's perspective) having a firm grasp of the economics behind their claims. They were anti-bailout, which to my understanding is basically saying they were pro-depression-instead-of-recession.
The way I'm reading this, Bank of America has some risky derivatives that are likely to go bad (I have a poor understanding of derivatives and how to talk about them), and they've moved the risk from the investment part of their bank to the depository part of their bank so that in the event that they lose money on these derivatives they can use leverage from the depositors money to pay for them?
According to the Young Turks these derivatives are worth significantly more than the bank itself. Wouldn't the bank failing have drastic effects on the economy, and doesn't it seem that based on this information that is a likely scenario?
You can tell it's not well informed because he opens with opinions, stories, and fearmongering rather than the stats. A solid sign that someone doesn't believe in their own opinions.
edit - He also doesn't understand how debt works. He seems to think that taxation is illegal confiscation of wealth.
edit2 - Hey, here comes the pointless personal anecdotes about how big the debt is! And considering debt in dollars at the time it was held.
edit3 - And here come the graphs which fail to account for inflation and growth in population in terms of debt. And the misunderstanding of the way the world economy works. I'm betting at no point does he say "Of course, the US could solve this entire problem with raising taxes by 1%"
You can tell it's not well informed because he opens with opinions, stories, and fearmongering rather than the stats. A solid sign that someone doesn't believe in their own opinions.
edit - He also doesn't understand how debt works. He seems to think that taxation is illegal confiscation of wealth.
edit2 - Hey, here comes the pointless personal anecdotes about how big the debt is! And considering debt in dollars at the time it was held.
edit3 - And here come the graphs which fail to account for inflation and growth in population in terms of debt. And the misunderstanding of the way the world economy works. I'm betting at no point does he say "Of course, the US could solve this entire problem with raising taxes by 1%"
I'm convinced that a lot of the fearmongering over the national debt just comes from its name. People immediately assume that the national debt is like a household debt. We should give it a different name- something boring and technical- so that people will stop worrying so much about it.
0
Options
zepherinRussian warship, go fuck yourselfRegistered Userregular
I'm convinced that a lot of the fearmongering over the national debt just comes from its name. People immediately assume that the national debt is like a household debt. We should give it a different name- something boring and technical- so that people will stop worrying so much about it.
Parallel negative cash-flow subsidies.
0
Options
FencingsaxIt is difficult to get a man to understand, when his salary depends upon his not understandingGNU Terry PratchettRegistered Userregular
The way I'm reading this, Bank of America has some risky derivatives that are likely to go bad (I have a poor understanding of derivatives and how to talk about them), and they've moved the risk from the investment part of their bank to the depository part of their bank so that in the event that they lose money on these derivatives they can use leverage from the depositors money to pay for them?
According to the Young Turks these derivatives are worth significantly more than the bank itself. Wouldn't the bank failing have drastic effects on the economy, and doesn't it seem that based on this information that is a likely scenario?
If BoA failed we would be, in a word, fucked.
[citation needed]
Remember how everyone talks about too big to fail? They're mostly talking about BofA.
The way I'm reading this, Bank of America has some risky derivatives that are likely to go bad (I have a poor understanding of derivatives and how to talk about them), and they've moved the risk from the investment part of their bank to the depository part of their bank so that in the event that they lose money on these derivatives they can use leverage from the depositors money to pay for them?
According to the Young Turks these derivatives are worth significantly more than the bank itself. Wouldn't the bank failing have drastic effects on the economy, and doesn't it seem that based on this information that is a likely scenario?
If BoA failed we would be, in a word, fucked.
[citation needed]
Really? You need a citation on why the failure of the 2nd largest bank in the US and the 3rd largest company in the world would be a bad thing for the US economy? Really?
As an aside: Young Turks are heavily partisan without really (from my own layman's perspective) having a firm grasp of the economics behind their claims. They were anti-bailout, which to my understanding is basically saying they were pro-depression-instead-of-recession.
From my perspective, if the banks need a bailout, we need to nationalize them. If you can't not wreck the entire economy when you fail, and you do fail, you need to be run by the government.
As an aside: Young Turks are heavily partisan without really (from my own layman's perspective) having a firm grasp of the economics behind their claims. They were anti-bailout, which to my understanding is basically saying they were pro-depression-instead-of-recession.
From my perspective, if the banks need a bailout, we need to nationalize them. If you can't not wreck the entire economy when you fail, and you do fail, you need to be run by the government.
I don't think we need the federal government to be in the business of running the financial sector.
We do, however, need fewer "innovations" (that wind up pushing the global economic system to the brink of collapse) in the financial sector.
It's a pretty common human failing to want both high returns and low risk at the same time... and whenever a new product comes along that promises to deliver both of those things, we tend to end up with one of these economic collapses, whether it's Dutch tulips or Albanian pyramid schemes or credit default swaps... I doubt we'll ever be rid of them and the "innovations" that spawn them.
The point of a regulatory body (that does its job) is not to foresee and account for every possibility.
But once it becomes clear that people are conducting business in such a way that it threatens an entire industry or sector... well, it'd be nice if the regulators did something.
Fun fact: Adam Smith specifically warned that the Invisible Hand mechanism doesn't apply to the financial sector.
0
Options
mrt144King of the NumbernamesRegistered Userregular
It's a pretty common human failing to want both high returns and low risk at the same time... and whenever a new product comes along that promises to deliver both of those things, we tend to end up with one of these economic collapses, whether it's Dutch tulips or Albanian pyramid schemes or credit default swaps... I doubt we'll ever be rid of them and the "innovations" that spawn them.
Whoa whoa whoa, dutch tulips were never a historically low risk investment.
As an aside: Young Turks are heavily partisan without really (from my own layman's perspective) having a firm grasp of the economics behind their claims. They were anti-bailout, which to my understanding is basically saying they were pro-depression-instead-of-recession.
From my perspective, if the banks need a bailout, we need to nationalize them. If you can't not wreck the entire economy when you fail, and you do fail, you need to be run by the government.
But when nationalized are they any better or any inherently risky? Unless you're saying that the act of nationalization is just a way to wind the bank down completely.
Such regulations may, no doubt, be considered as in some respects a violation of natural liberty. But these exertions of the natural liberty of a few individuals, which might endanger the security of the whole society are, and ought to be, restrained by the laws of all governments…[T]he obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty, exactly of the same kind with the regulations of the banking trade which are here proposed.
As an aside: Young Turks are heavily partisan without really (from my own layman's perspective) having a firm grasp of the economics behind their claims. They were anti-bailout, which to my understanding is basically saying they were pro-depression-instead-of-recession.
From my perspective, if the banks need a bailout, we need to nationalize them. If you can't not wreck the entire economy when you fail, and you do fail, you need to be run by the government.
But when nationalized are they any better or any inherently risky? Unless you're saying that the act of nationalization is just a way to wind the bank down completely.
I think the point(or at least the hope) is that they would be more directly accountable to the people.
As an aside: Young Turks are heavily partisan without really (from my own layman's perspective) having a firm grasp of the economics behind their claims. They were anti-bailout, which to my understanding is basically saying they were pro-depression-instead-of-recession.
From my perspective, if the banks need a bailout, we need to nationalize them. If you can't not wreck the entire economy when you fail, and you do fail, you need to be run by the government.
But when nationalized are they any better or any inherently risky? Unless you're saying that the act of nationalization is just a way to wind the bank down completely.
I think the point(or at least the hope) is that they would be more directly accountable to the people.
Permanently nationalizing would also be really unethical. You think there isn't already a lot of regulatory capture?
0
Options
zepherinRussian warship, go fuck yourselfRegistered Userregular
I think the point(or at least the hope) is that they would be more directly accountable to the people.
I don't think that nationalization is the answer. I think we should simply enforce the regulations that we already have, and make it so that the FDIC has fine power and is unentangled from the Federal Reserve and congress.
I think the experience has been that these big banks are in too incestuous a relationship to just "let them fail." It's the same reason we don't want Greece to go bankrupt (at least, not before we can make sure Greek and French banks have enough capital to take the hit).
Pretty much, the only way to let something like BoA fail without tanking the world economy is to have the US government guarantee all its debt in the event it goes bankrupt.
}
"Orkses never lose a battle. If we win we win, if we die we die fightin so it don't count. If we runs for it we don't die neither, cos we can come back for annuver go, see!".
0
Options
zepherinRussian warship, go fuck yourselfRegistered Userregular
Pretty much, the only way to let something like BoA fail without tanking the world economy is to have the US government guarantee all its debt in the event it goes bankrupt.
It would cause problems, but having the FDIC takeover and break up BoA would not be the apocalyptic scenario that some groups say it is. They aren't even the largest bank anymore.
As an aside: Young Turks are heavily partisan without really (from my own layman's perspective) having a firm grasp of the economics behind their claims. They were anti-bailout, which to my understanding is basically saying they were pro-depression-instead-of-recession.
From my perspective, if the banks need a bailout, we need to nationalize them. If you can't not wreck the entire economy when you fail, and you do fail, you need to be run by the government.
But when nationalized are they any better or any inherently risky? Unless you're saying that the act of nationalization is just a way to wind the bank down completely.
Owner incentatitive. The private owner can never lose his entire stake in a company too big too fail, hence, that scenario doesn't need to enter his risk calculations. Hence, significantly less of an incentative to prepare for that kind of scenario. It's like gambling with someone else's money.
They want loans, make them pay in preferential shares. There's no point in privatizing profits and socializing losses.
If BofA is too big to fail, it's time to bust it down into smaller chunks.
It's as simple as that.
Yep. More than just monopoly laws, we need to have some sort of economic load-bearing boss law. Any company so large that it can hold the country hostage needs to be broken up into smaller companies.
If BofA is too big to fail, it's time to bust it down into smaller chunks.
It's as simple as that.
Yep. More than just monopoly laws, we need to have some sort of economic load-bearing boss law. Any company so large that it can hold the country hostage needs to be broken up into smaller companies.
I understand the desire and all but how the fuck do you stop them from becoming the Bank of Somalia and telling you to fuck your size limit laws?
I understand the desire and all but how the fuck do you stop them from becoming the Bank of Somalia and telling you to fuck your size limit laws?
Assuming we wanted too and this purely a theoretical ignore the laws and rights point of view.
We could simply just use our police powers takeover all the financial centers, hold the executives under a national security directive while we transfer control. Break down the business and resell it. Let the executives out of custody and then stone wall them with executive privilege when they try to go to court. The government could do that and get away with it.
I understand the desire and all but how the fuck do you stop them from becoming the Bank of Somalia and telling you to fuck your size limit laws?
Same way we handle monopolies when we're not bought off by the monopolies?
I think the realities of the situation are slightly different from 100 years ago, or even 30 when we broke up Ma Bell. Note that Ma Bell had a huge infrastructure that firmly tied them to a specific country. A large portion of the investment finance stuff from BoA could happily base off shore.
I think this is a giant can of worms that isn't as easy as saying "Pass a Law."
I understand the desire and all but how the fuck do you stop them from becoming the Bank of Somalia and telling you to fuck your size limit laws?
Assuming we wanted too and this purely a theoretical ignore the laws and rights point of view.
We could simply just use our police powers takeover all the financial centers, hold the executives under a national security directive while we transfer control. Break down the business and resell it. Let the executives out of custody and then stone wall them with executive privilege when they try to go to court. The government could do that and get away with it.
I will concede that if we want to become a dictatorship we could do it by cutting all ties to the world economy. We could have our very own little North Korea in America.
I think the realities of the situation are slightly different from 100 years ago, or even 30 when we broke up Ma Bell. Note that Ma Bell had a huge infrastructure that firmly tied them to a specific country. A large portion of the investment finance stuff from BoA could happily base off shore.
I think this is a giant can of worms that isn't as easy as saying "Pass a Law."
This is like saying that Nike can have sweatshops in the US because they have them in China.
I think the realities of the situation are slightly different from 100 years ago, or even 30 when we broke up Ma Bell. Note that Ma Bell had a huge infrastructure that firmly tied them to a specific country. A large portion of the investment finance stuff from BoA could happily base off shore.
I think this is a giant can of worms that isn't as easy as saying "Pass a Law."
This is like saying that Nike can have sweatshops in the US because they have them in China.
No, the problem is that investment finance does not a have strong tie to a locality. This is like what happened when they tried to ban online poker in the US except there is more money involved by a factor of a 1000 and a much greater incentive for a small country to simply get bought out. This is going to raise the whole question of where sovereignty ends when the world is as interconnected as it is.
These are issues we are going to have to address at some point in the future but brushing them aside to say "Fuck x!" is very much the wrong way to do it.
Posts
http://finance.moneyandmarkets.com/reports/SMR/4597/vsp-smr2.php?s=MSAV&e=4626101
With those kind of credentials, you should definitely listen to everything he has to say.
confusion between fiscal solvency crisis and financial crisis
BEEEEP
That's crazy
The rich are almost certainly going to come out ahead
*close window*
...
The way I'm reading this, Bank of America has some risky derivatives that are likely to go bad (I have a poor understanding of derivatives and how to talk about them), and they've moved the risk from the investment part of their bank to the depository part of their bank so that in the event that they lose money on these derivatives they can use leverage from the depositors money to pay for them?
According to the Young Turks these derivatives are worth significantly more than the bank itself. Wouldn't the bank failing have drastic effects on the economy, and doesn't it seem that based on this information that is a likely scenario?
If BoA failed we would be, in a word, fucked.
[citation needed]
You can tell it's not well informed because he opens with opinions, stories, and fearmongering rather than the stats. A solid sign that someone doesn't believe in their own opinions.
edit - He also doesn't understand how debt works. He seems to think that taxation is illegal confiscation of wealth.
edit2 - Hey, here comes the pointless personal anecdotes about how big the debt is! And considering debt in dollars at the time it was held.
edit3 - And here come the graphs which fail to account for inflation and growth in population in terms of debt. And the misunderstanding of the way the world economy works. I'm betting at no point does he say "Of course, the US could solve this entire problem with raising taxes by 1%"
I'm convinced that a lot of the fearmongering over the national debt just comes from its name. People immediately assume that the national debt is like a household debt. We should give it a different name- something boring and technical- so that people will stop worrying so much about it.
Remember how everyone talks about too big to fail? They're mostly talking about BofA.
Really? You need a citation on why the failure of the 2nd largest bank in the US and the 3rd largest company in the world would be a bad thing for the US economy? Really?
From my perspective, if the banks need a bailout, we need to nationalize them. If you can't not wreck the entire economy when you fail, and you do fail, you need to be run by the government.
I don't think we need the federal government to be in the business of running the financial sector.
We do, however, need fewer "innovations" (that wind up pushing the global economic system to the brink of collapse) in the financial sector.
But once it becomes clear that people are conducting business in such a way that it threatens an entire industry or sector... well, it'd be nice if the regulators did something.
Fun fact: Adam Smith specifically warned that the Invisible Hand mechanism doesn't apply to the financial sector.
Whoa whoa whoa, dutch tulips were never a historically low risk investment.
Can you tell us more?
But when nationalized are they any better or any inherently risky? Unless you're saying that the act of nationalization is just a way to wind the bank down completely.
Don't have a page reference, sorry.
Permanently nationalizing would also be really unethical. You think there isn't already a lot of regulatory capture?
It's as simple as that.
"Orkses never lose a battle. If we win we win, if we die we die fightin so it don't count. If we runs for it we don't die neither, cos we can come back for annuver go, see!".
They want loans, make them pay in preferential shares. There's no point in privatizing profits and socializing losses.
Yep. More than just monopoly laws, we need to have some sort of economic load-bearing boss law. Any company so large that it can hold the country hostage needs to be broken up into smaller companies.
I understand the desire and all but how the fuck do you stop them from becoming the Bank of Somalia and telling you to fuck your size limit laws?
Same way we handle monopolies when we're not bought off by the monopolies?
We could simply just use our police powers takeover all the financial centers, hold the executives under a national security directive while we transfer control. Break down the business and resell it. Let the executives out of custody and then stone wall them with executive privilege when they try to go to court. The government could do that and get away with it.
I think the realities of the situation are slightly different from 100 years ago, or even 30 when we broke up Ma Bell. Note that Ma Bell had a huge infrastructure that firmly tied them to a specific country. A large portion of the investment finance stuff from BoA could happily base off shore.
I think this is a giant can of worms that isn't as easy as saying "Pass a Law."
I will concede that if we want to become a dictatorship we could do it by cutting all ties to the world economy. We could have our very own little North Korea in America.
This is like saying that Nike can have sweatshops in the US because they have them in China.
No, the problem is that investment finance does not a have strong tie to a locality. This is like what happened when they tried to ban online poker in the US except there is more money involved by a factor of a 1000 and a much greater incentive for a small country to simply get bought out. This is going to raise the whole question of where sovereignty ends when the world is as interconnected as it is.
These are issues we are going to have to address at some point in the future but brushing them aside to say "Fuck x!" is very much the wrong way to do it.