Hoenig Warns on Too-Big-to-Fail

[Highlander416]

http://blogs.wsj.com/economics/2010/01/05/feds-hoenig-warns-on-too-big-to-fail-backs-glass-steagall/

"In a separate panel Monday, Simon Johnson, economist at the Massachusetts Institute of Technology, identified six banks as posing a risk: Bank of America Corp., Citigroup Inc., Goldman Sachs, J.P. Morgan Chase, Morgan Stanley and Wells Fargo & Co."

Trying to break up those giants would be one heck of a battle to watch, no?

 

[Terrel L. Shields]

Especially with the new "powers that be" having been heavily financed by Wall St. banks and hedge funds. Do you really expect to see them made to 'toe the line' on reform or risk taking? Sorry charlie.

 

[Austin]

http://blogs.wsj.com/economics/2010/01/05/feds-hoenig-warns-on-too-big-to-fail-backs-glass-steagall/

"In a separate panel Monday, Simon Johnson, economist at the Massachusetts Institute of Technology, identified six banks as posing a risk: Bank of America Corp., Citigroup Inc., Goldman Sachs, J.P. Morgan Chase, Morgan Stanley and Wells Fargo & Co."

Trying to break up those giants would be one heck of a battle to watch, no?

On the economy busting thread last week someone asked the question: "Does any one know who owns the federal reserve bank of NY?" I looked it up and their are about 8 owners including: Bank of America, Citigroup, Goldman Sachs, J.P Morgan Chase, Morgan Stanely. Not failing is easy when you have connections. Especially when you own 75% of the Federal Reserve Bank of NY who just happens to own a money printing machine.

 

[Terrel L. Shields]

The "Fly over" states where the Fed presidents like Hoenig have no vote on the Fed, but simply are there to state opinions, have been the Fed officials who have been the most vociferous in opposing the Helicopter Ben approach of throwing money into the big bank coffers to support the financial system, rather than jump start the economy.

What if we had spent the money rebuilding our bridges and installing more high speed cable to create a high speed nationwide "information highway" or "cloud" from which anyone and everyone could access the internet from virtually every place in America? How many construction jobs would have been created? How many manufacturers could have sold more goods?... instead we give zero interest money to the banks, who, in turn, parked that money in the very Fed that gave it to them at 3% plus interest... the carry trade. They simply borrowed money for free and made interest off it. Is this a great country or what....? oh...you mean they won't give me $9 billion dollars to park in the Fed's cash cow??? gee...

 

[Riick]

What if we had spent the money rebuilding our bridges and installing more high speed cable to create a high speed nationwide "information highway" or "cloud" from which anyone and everyone could access the internet from virtually every place in America? How many construction jobs would have been created? How many manufacturers could have sold more goods?... instead we

I've been wondering who WON in this bust.
That TBTF (TooBigToFail) group was making a ton of bets (derivatives), and as I understand it,
it was in the derivatives that the really BIG money was lost.
But, unlike stocks, where the money can just evaporate
(XYZ Corp goes from $30 to $21 and $9 x 26 million shares outstanding goes poof)
these derivatives were bets, where someone Wins and someone else Loses.
We know who lost, but, who won?? Or have I completely misunderstood what happened 2007-2009 ??

/

 

[Terrel L. Shields]

We know who lost, but, who won??

the banks...They took enormous risks, lost, and were bailed out. They are now taking even larger risks using the same flawed math models - Scholes Black - being taught at every major Business School in America....and they take those risks because they know the Fed will have to bail them out again...
Roubini blames the banks and regulators.. or as he said, "who regulates the regulators?"
http://video.ft.com/v/62573986001/Dec-17-Nouriel-Roubini-on-culprits-of-the-crisis

Meanwhile Bernanke reiterated his statement today that employment won't recover for 4 or 5 years... a prediction he made in a December 60 Minutes interview
http://www.therightscoop.com/bernanke-says-4-or-5-years-until-unemployment-returns-to-normal

Unless we stop trying to monitize the debt and start playing hardball with countries who limit our exports, we'll never see 6% unemployment or less again in my lifetime.