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Thread: jackpot for Wall Street and Big Banks

  1. #1

    Default jackpot for Wall Street and Big Banks

    Congress cut a deal last night to keep the government open.
    As usual, it was an ugly deal, too. Wall Street banks called in their political IOUs and cashed in big.
    'This bill allows too-big-to-fail banks to make the same risky bets on derivatives that led to the
    largest taxpayer bailout in history
    and nearly destroyed the economy,' argued Bernie Sanders


    From Brad Hoppman -

    Banks: Desperately Seeking Bailouts – Again


    Remember 2008? The nation's largest banks were in danger of blowing up thanks to crazy subprime mortgage bonds and an overheated real estate market.

    With a couple of exceptions (Bear Stearns and Lehman Brothers), they didn't blow up. They're still with us today, bigger and more profitable than ever. That's because Congress, the Bush Administration and the Federal Reserve spent trillions of dollars bailing out the entire industry.

    That experience left a bitter taste in the nation's mouth. The 2010 Dodd-Frank financial reform law was an attempt to keep it from happening again. Dodd-Frank is far from perfect, but it was a start.

    Part of the Dodd-Frank law prohibits banks from using federally insured deposit money — like your savings or checking account — to trade in risky derivative instruments. It's called the “swaps push-out“ provision because banks would have to push those transactions out of the insured bank into separate, uninsured subsidiaries.

    I think this makes perfect sense. If taxpayers must do banks the favor of insuring their deposits, it is wise to have reasonable restrictions on the way banks use the insured money. They shouldn't be able to gamble or speculate with it. That sets up a perverse “Heads we win, tails the taxpayers lose“ incentive system — exactly what created the 2008 crisis.

    The big banks don't like the swaps push-out ... and last night's vote freed them from it. A provision attached to the government funding bill repeals that section of Dodd-Frank. The banks will now be free to buy and sell risky derivatives with your money.
    Whose idea was this? That isn't entirely clear, but this is not a partisan battle at all. An odd coalition of liberal Democrats and Tea Party Republicans tried to resist the amendment, but they didn't have enough votes to stop it.

    Stranger still, President Obama says he will sign the bill if it gets past the Senate, as seems likely. That's weird because just last year his own Treasury Secretary, Jack Lew, spoke out against this Dodd-Frank change.

    The banks obviously fought hard to get this provision into the funding bill. JPMorgan Chase (JPM) Chair & CEO Jamie Dimon reportedly spent yesterday making phone calls to wavering House members. Apparently, he convinced them.

    Here's what is strange, though. Why now? Why the sudden urgency to repeal the swaps push-out provision immediately?

    Political analysts have been saying business interests will have more sway when the new House and Senate convene in January. Couldn't they have waited, and maybe got what they wanted without creating such an uproar? It sure seemed like it.

    This makes me wonder if maybe the banks literally can't wait. Maybe they need the ability to trade derivatives with insured deposits now, not early next year.

    Why would that be?

    I have a guess ... and let me be clear that this is just speculation on my part. I don't have any kind of inside knowledge.

    We know the collapse in oil prices caught Wall Street off guard. I'm seeing more and more stories about the impact spreading from energy stocks into the junk bond market.

    Many smaller U.S. and Canadian shale companies financed their exploration and development by issuing junk bonds. Now, with oil prices down more than 40% from their peak, those companies' ability to make timely payments to their bondholders is in serious doubt.

    In this respect, it is very much like the housing collapse. Instead of jobless homeowners who can't make mortgage payments, we have struggling energy companies who can't sell their oil for a price that lets them make bond payments.

    They can't refinance their debt, either. Bond yields have doubled in some cases — choking off the supply of credit to energy producers.

    Does Wall Street see this coming? Are they desperately lining up preemptive bailouts to protect themselves? Do their friends in Washington know more than they're letting on?
    "The dogs bark but the caravan moves on."
    .....................The Zengrifter Interview (PDF) |
    The Zengrifter / James Grosjean Reputation Debate
    -----------------------------------------
    “Truth, like gold, is obtained not by growth, but by washing away all that is not gold.” — Leo Tolstoy........
    "Is everything a conspiracy? No, just the important stuff." ZG

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    "Remember, write to your Congressman. Even if he can't read, write to him." - Will Rogers, 26 May 1935



  3. #3

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    All this news about government shutdowns is ridiculous! They seem to be happening with greater and greater frequency. To me it can only mean one thing, they're broke! I can only wonder what it's going to be like when the people running the show cannot hit the reset button anymore. The way I see it, if they are not able to fund the government and all of the programs all hell is going to break lose as in martial law across America. $1.1 trillion is a shit load of currency, stacking debt on top of even more debt that cannot be paid off.

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    Default Blitz

    Quote Originally Posted by Blitzkrieg View Post
    All this news about government shutdowns is ridiculous! They seem to be happening with greater and greater frequency. To me it can only mean one thing, they're broke! I can only wonder what it's going to be like when the people running the show cannot hit the reset button anymore. The way I see it, if they are not able to fund the government and all of the programs all hell is going to break lose as in martial law across America. $1.1 trillion is a shit load of currency, stacking debt on top of even more debt that cannot be paid off.
    Guns, ammo and food, this is what you need to stock, and be prepared to use the guns when you need to.

    My favorite fire arms,

    Scoped and magazine fed bolt action 308. (Sniper and hunting).

    AR's in 308 and 556.

    9mm revolver and semi auto hand guns.

    Shot gun.

    You will have $7000 invested, but if bought right will never go down in value.

    Native Americans on the Rez. will be far safer than those people in the big city, but if you live in the country as I do, you can easily form a local neighborhood based defense group, this will be needed.

    Also a generator and gas to run it when needed.

    CP
    "Midwest Masters Of Advantage", "Strength and Honor."

  5. #5

    Default

    Quote Originally Posted by creeping panther View Post
    Guns, ammo and food, this is what you need to stock, and be prepared to use the guns when you need to.

    My favorite fire arms,

    Scoped and magazine fed bolt action 308. (Sniper and hunting).

    AR's in 308 and 556.

    9mm revolver and semi auto hand guns.

    Shot gun.

    You will have $7000 invested, but if bought right will never go down in value.

    Native Americans on the Rez. will be far safer than those people in the big city, but if you live in the country as I do, you can easily form a local neighborhood based defense group, this will be needed.

    Also a generator and gas to run it when needed.

    CP
    If the shit hits the fan, I'll be ready. It would be nice to have a few more firearms that I have in mind. I consider myself lucky that I don't live in the big city, the city is the last place anybody would want to be when mass rioting breaks out. A generator is a good idea but I may look for a product that is solar powered if the cost is reasonable.

  6. #6

    Default

    "The dogs bark but the caravan moves on."
    .....................The Zengrifter Interview (PDF) |
    The Zengrifter / James Grosjean Reputation Debate
    -----------------------------------------
    “Truth, like gold, is obtained not by growth, but by washing away all that is not gold.” — Leo Tolstoy........
    "Is everything a conspiracy? No, just the important stuff." ZG

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    Neo-conservatives have ruined the notion of compassionate conservatism. Unable to use the term, which has become so contaminated by neo-conservative spending sprees and nation building, we must coin a new term. I am a caring conservative.

    Caring conservatives recognize that capitalism and democracy do not always result in fairness to each and every citizen; they are simply systems for addressing the average case and need and the best overall result. We believe that government has an obligation to step in to help disadvantaged and disenfranchised Americans when private organizations and private individuals fall short in their charitable efforts. No American should live in poverty; no American should be homeless; no American should be without health care that exceeds Obamacare; no American should ever go to bed hungry; no American should be without opportunity, including a sound education and a decent job.

    All this can be accomplished first, by allowing the business sector room and impetus to grow, with a watchful eye, of course, and second, by government filling the gap where shortfalls inevitably will exist. But as conservatives, at the same time, we necessarily work for a balanced budget, reduction of national indebtedness, a strong military for national defense, a smaller Federal government through elimination of many Federal agencies, a less intrusive Federal government that recognizes individual freedoms and privacy rights, and a return of power in most areas to the state and local levels of government.

    Br. Aslan, Caring conservative
    Aslan 11/1/90 - 6/15/10 Stormy 1/22/95 -8/23/10
    “There are not one hundred people in the United States who hate The Catholic Church,
    but there are millions who hate what they wrongly perceive the Catholic Church to be.”
    Bishop Fulton J. Sheen

    “It takes a very long time to become young.” Pablo Picasso

  8. #8

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    Quote Originally Posted by aslan View Post
    Neo-conservatives have ruined the notion of compassionate conservatism.
    That's okay, we're coming out with a new buzz-term: "loving liberalism!"
    "The dogs bark but the caravan moves on."
    .....................The Zengrifter Interview (PDF) |
    The Zengrifter / James Grosjean Reputation Debate
    -----------------------------------------
    “Truth, like gold, is obtained not by growth, but by washing away all that is not gold.” — Leo Tolstoy........
    "Is everything a conspiracy? No, just the important stuff." ZG

  9. #9

    Default

    Quote Originally Posted by aslan View Post
    Neo-conservatives have ruined the notion of compassionate conservatism. Unable to use the term, which has become so contaminated by neo-conservative spending sprees and nation building, we must coin a new term. I am a caring conservative.

    Caring conservatives recognize that capitalism and democracy do not always result in fairness to each and every citizen; they are simply systems for addressing the average case and need and the best overall result. We believe that government has an obligation to step in to help disadvantaged and disenfranchised Americans when private organizations and private individuals fall short in their charitable efforts. No American should live in poverty; no American should be homeless; no American should be without health care that exceeds Obamacare; no American should ever go to bed hungry; no American should be without opportunity, including a sound education and a decent job.

    All this can be accomplished first, by allowing the business sector room and impetus to grow, with a watchful eye, of course
    The problem will always be: Who will watch the watchers?
    "The dogs bark but the caravan moves on."
    .....................The Zengrifter Interview (PDF) |
    The Zengrifter / James Grosjean Reputation Debate
    -----------------------------------------
    “Truth, like gold, is obtained not by growth, but by washing away all that is not gold.” — Leo Tolstoy........
    "Is everything a conspiracy? No, just the important stuff." ZG

  10. #10
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    Quote Originally Posted by zengrifter View Post
    That's okay, we're coming out with a new buzz-term: "loving liberalism!"
    Some liberals mean well, but they always muck up the works. It's like when your kids try to tell you what you should do. Yeah, right.
    Aslan 11/1/90 - 6/15/10 Stormy 1/22/95 -8/23/10
    “There are not one hundred people in the United States who hate The Catholic Church,
    but there are millions who hate what they wrongly perceive the Catholic Church to be.”
    Bishop Fulton J. Sheen

    “It takes a very long time to become young.” Pablo Picasso

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    Quote Originally Posted by aslan View Post
    Some liberals mean well, but they always muck up the works. It's like when your kids try to tell you what you should do. Yeah, right.

  12. #12
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    Quote Originally Posted by Katz View Post
    Yeah, right!
    Aslan 11/1/90 - 6/15/10 Stormy 1/22/95 -8/23/10
    “There are not one hundred people in the United States who hate The Catholic Church,
    but there are millions who hate what they wrongly perceive the Catholic Church to be.”
    Bishop Fulton J. Sheen

    “It takes a very long time to become young.” Pablo Picasso

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  14. #14
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    Quote Originally Posted by Katz View Post
    Wrong! It's "He WILL rob the world."
    Aslan 11/1/90 - 6/15/10 Stormy 1/22/95 -8/23/10
    “There are not one hundred people in the United States who hate The Catholic Church,
    but there are millions who hate what they wrongly perceive the Catholic Church to be.”
    Bishop Fulton J. Sheen

    “It takes a very long time to become young.” Pablo Picasso

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