tag:blogger.com,1999:blog-15329279.post6323068239499802879..comments2023-08-25T05:18:29.312-06:00Comments on Madville Times: Derivatives: Less Theory, More Facts... and More Capitalism, Please!caheidelbergerhttp://www.blogger.com/profile/03261598066395322681noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-15329279.post-56287879502542068242010-04-21T13:33:34.617-06:002010-04-21T13:33:34.617-06:00Thad, I suspect the used car dealers would fold a...Thad, I suspect the used car dealers would fold as well, with all the money floating around on this. The huge lobby effort makes me skeptical that anything meaningful will come of it.Barry Smithnoreply@blogger.comtag:blogger.com,1999:blog-15329279.post-36142554519161076052010-04-21T12:56:27.423-06:002010-04-21T12:56:27.423-06:00Risk is for the little guy or the American taxpaye...Risk is for the little guy or the American taxpayer. UBS and Goldman Sachs are able to transfer their bad debt to AIG who then are bailed out by Joe Blow taxpayer.<br /><br />We do not need more laws, if they lose money and don't have the capital to back it up, let them fail. <br /><br />We have used car salesmen in South Dakota who could negotiate better than our own Senators with these bankers.Thad Wassonhttps://www.blogger.com/profile/00633228072878507747noreply@blogger.comtag:blogger.com,1999:blog-15329279.post-72611154441567509802010-04-21T10:19:28.774-06:002010-04-21T10:19:28.774-06:00In the old days, we had hundreds of investment ban...In the old days, we had hundreds of investment banks staking our expertises in all facets of financial products. This diversity and competition was de facto unregulated mitigation of risk. <br /><br />I don't care if companies who screw up fail. What I care about is failures that has ripple effects beyond the stockholders. This makes the aggregation of financial products in these largets banks so risky. No regulation will prevent the next "bubble" or failure. It is necessary in a capitalist economy. What we can't have is the failure affect beyond stockholders.<br /><br />Finance depends on liquidity and fluidity. Regulation and oversight are by definition impediments to both. If we can achieve our goal (remove systemic risk to the system) without regulation, our system will be safer and more dynamic/effective. <br /><br />Liquid financial markets helps the economy, jobs and the poor.Troy Jonesnoreply@blogger.comtag:blogger.com,1999:blog-15329279.post-19344461022112484972010-04-21T09:40:18.955-06:002010-04-21T09:40:18.955-06:00Okay, got it. Repealing Grahm-Leach would break th...Okay, got it. Repealing Grahm-Leach would break them up automatically. They couldn't be both banks AND insurance companies. But how would that affect the sale of shady derivatives?<br /><br />i.e. don't the other measures in the bill still make sense?<br /><br />(I really do get your point Troy. Why do you suppose Congress and Geithner won't "go there?")Bill Fleminghttps://www.blogger.com/profile/08319507693205848772noreply@blogger.comtag:blogger.com,1999:blog-15329279.post-37369557952007233112010-04-21T09:31:52.814-06:002010-04-21T09:31:52.814-06:00(...this is BF looking up "Gramm-Leach...)(...this is BF looking up "Gramm-Leach...)Bill Fleminghttps://www.blogger.com/profile/08319507693205848772noreply@blogger.comtag:blogger.com,1999:blog-15329279.post-68670189474577844552010-04-21T09:27:11.529-06:002010-04-21T09:27:11.529-06:00How, Troy? Who can do it? Obama? Congress?How, Troy? Who can do it? Obama? Congress?Bill Fleminghttps://www.blogger.com/profile/08319507693205848772noreply@blogger.comtag:blogger.com,1999:blog-15329279.post-36750643613480262242010-04-21T08:36:44.578-06:002010-04-21T08:36:44.578-06:00Bill,
I don't think our goals are different. ...Bill,<br /><br />I don't think our goals are different. I just think this bill is designed to institutionalize the power of the largest banks. The problem started with Gramm-Leach yet nobody is willing to go there. Instead, they just implement a cobbled together "reaction" to give the appearance of doing what we want.<br /><br />As much as you think it will decrease risk to the taxpayer, it actually increases it. We bailed out AIG even though it wasn't federally insured. We will do it again. <br /><br />Why wait til they fail to break them up. Too big to fail means they are too big.Troy Jonesnoreply@blogger.comtag:blogger.com,1999:blog-15329279.post-53619465134529692422010-04-21T08:19:42.511-06:002010-04-21T08:19:42.511-06:00Oh, boy. Here I go again, poking my nose into a co...Oh, boy. Here I go again, poking my nose into a conversation I'm probably not qualified to discuss. But hey, this is a blog, right? So here goes.<br /><br />Troy, doesn't the proposed law provide better protection by creating a mechanism whereby the banks, not the government (the people) have to put up the money to cover their losses?<br /><br />I suppose your point might be that this drain of capital makes less available for loans, but isn't part of the problem that they're not loaning now because trading in derivatives is by far less risky and more profitable?<br /><br />And finally, doesn't the proposed new law provide the very mechanism by which the banks will be broken up and sold off in chunks should they fail again?<br /><br />So in essence, doesn't the proposed new law seem to offer the very protections and consequences you say you're looking for?Bill Fleminghttps://www.blogger.com/profile/08319507693205848772noreply@blogger.comtag:blogger.com,1999:blog-15329279.post-51424949202700123342010-04-21T07:44:11.057-06:002010-04-21T07:44:11.057-06:00Cory,
I see you can't let this lie despite yo...Cory,<br /><br />I see you can't let this lie despite your limited understanding of the entire financial situation. It is unwise to look at derivatives as a single item to be dealt with but it must be part of the whole.<br /><br />There are grains of truth and good understanding of the nuggets you reference but the problem is not with the products but the reality we have too much power and risk concentrated in a few large banks.<br /><br />I opposed the "deregulation" that occurred with Gramm Leach but this proposal is not a return to the world prior to Gramm Leach but actually an institutionalization of the big banks and protects their position in the marketplace.<br /><br />If the proposal was to repeal Gramm Leach, I'd be for it. I am opposed to this fiasco.Troy Jonesnoreply@blogger.com