OT: Another bank bites the dust

[Amanita]

Still at least we all get to be Newcastle United fans, bravely sponsoring them with our taxes despite them being shit.

[NorthernMonkey]

Still at least we all get to be Newcastle United fans, bravely sponsoring them with our taxes despite them being shit.

Unfortunately you're absolutely correct - our money bailing them out yet we have no control over anything whatsoever.

[see the light]

To make matters worse, Mike Ashley declared his intention to sell Newcastle Utd for £471mill..... he bought the club for around the £150m mark and invested around £100m - sorry, i'm well confused with the valuation?!

[NorthernMonkey]

Potentially 40,000 job losses at HBOS. Holy shit!

[Amanita]

well 39,999 i'm sorry for, but i'm ashamed to say that i hope that the twat with the round glasses gets the fuckin tin tack - stupidly i bank with the halifax, but i seriously considered going thru the hassle of changing banks due to their advertising shit. I might even transfer my dosh out because of this crap - but that just adds to it i suppose.

Bollocks.

A

[NorthernMonkey]

There's no need to transfer your money out of there, whatever 'product' you have will continue with the new owners.

[oblique strategies]

how does a bank go out of business?

By gambling with your money. i.e., speculation.

USA/global Situation:

AMY GOODMAN: What started all this?

NOMI PRINS: What started all of this was a complete lack of transparency and regulation in the banking system. If we go back to a history where we had a similar situation on Wall Street, which was 1929, when we had a stock market crash followed by a Great Depression, in 1932, when FDR was elected....He had to take a look at the banking system, which was undermining the general economy, which had undermined the general economy, and say, “You know what? We do not understand what’s going on here.

We have two types of banks. We have speculating investment banks, and we have commercial banks that deal with the public, take deposits, take savings, make mortgage loans, understand what’s going on. We’ll back those. The government will back those commercial institutions that deal with the public. It will not back speculative investment banks. And, by the way, those two things have to split. You pick a side. You want to be an investment bank? You be an investment bank. You want to be a commercial bank? We’ll back you. The Fed will back you. We will be there. We’ll create an insurance company, the FDIC, to back deposits for the public. We’ll have your back.” There was no—there was no agreement to have the back of the speculative investment banks.

Over the years, these things have merged and merged and merged. And in late 1999, Glass-Steagall, that act, was repealed, killed, died in Congress. And now you have a situation where everything that went wrong up until the creation of that act is happening now with a lot more capital and a lot more international interplay and a lot more money on the federal government to have to bail out when things go wrong. So, we have gone backwards in banking history, and having Merrill be a part of Bank of America is a tremendously big accident waiting to happen. Bear Stearns’s assets part of JPMorgan—they’re all part of recombining speculation and commercial.


MICHAEL HUDSON: That [inaudible] bailout. They’ve already spent $5 trillion in the last two weeks to double the size of the national debt by taking over Fannie Mae. How can they bail out the gamblers, how can they bail out Wall Street and not—and claim that the Social Security system doesn’t really exist? They’ve used the Social Security money basically for the bailout. There it goes. They’ve made a choice. The choice is to bail out Wall Street against the people.
The Treasury is supposed to represent the government and the economy, and the Fed is supposed to be the board of directors of commercial banks, but now Wall Street plays both sides of the game. It not only supplies the heads of the Fed; it supplies the Secretary of the Treasury. And that’s why I said the class war is back in business with a vengeance.

[NorthernMonkey]

how does a bank go out of business?

By gambling with your money. i.e., speculation.

USA/global Situation:

AMY GOODMAN: What started all this?

NOMI PRINS: What started all of this was a complete lack of transparency and regulation in the banking system. If we go back to a history where we had a similar situation on Wall Street, which was 1929, when we had a stock market crash followed by a Great Depression, in 1932, when FDR was elected....He had to take a look at the banking system, which was undermining the general economy, which had undermined the general economy, and say, “You know what? We do not understand what’s going on here.

We have two types of banks. We have speculating investment banks, and we have commercial banks that deal with the public, take deposits, take savings, make mortgage loans, understand what’s going on. We’ll back those. The government will back those commercial institutions that deal with the public. It will not back speculative investment banks. And, by the way, those two things have to split. You pick a side. You want to be an investment bank? You be an investment bank. You want to be a commercial bank? We’ll back you. The Fed will back you. We will be there. We’ll create an insurance company, the FDIC, to back deposits for the public. We’ll have your back.” There was no—there was no agreement to have the back of the speculative investment banks.

Over the years, these things have merged and merged and merged. And in late 1999, Glass-Steagall, that act, was repealed, killed, died in Congress. And now you have a situation where everything that went wrong up until the creation of that act is happening now with a lot more capital and a lot more international interplay and a lot more money on the federal government to have to bail out when things go wrong. So, we have gone backwards in banking history, and having Merrill be a part of Bank of America is a tremendously big accident waiting to happen. Bear Stearns’s assets part of JPMorgan—they’re all part of recombining speculation and commercial.


MICHAEL HUDSON: That [inaudible] bailout. They’ve already spent $5 trillion in the last two weeks to double the size of the national debt by taking over Fannie Mae. How can they bail out the gamblers, how can they bail out Wall Street and not—and claim that the Social Security system doesn’t really exist? They’ve used the Social Security money basically for the bailout. There it goes. They’ve made a choice. The choice is to bail out Wall Street against the people.
The Treasury is supposed to represent the government and the economy, and the Fed is supposed to be the board of directors of commercial banks, but now Wall Street plays both sides of the game. It not only supplies the heads of the Fed; it supplies the Secretary of the Treasury. And that’s why I said the class war is back in business with a vengeance.

I'm not from the US, but I can tell you now that that is political nonsense at its best. Investment banks have and always will speculate, that's how they make money; retail/commercial banks are backed by the major investment banks, they are all part of the same chain. And the regulations argument is, to be honest, fucking pathetic - it doesn't matter how much regulation is in place, traders will always find a way around them in pursuit of money. Banks go out of business for one reason only - they borrow too much in the good times and make too little to finance their debts in the hard times. And as for the politicians, they'll bail out whoever they think will put them in a better light, whether that is the voting public or their financial backers.

[Homebelly]

Any company short-selling on those will be making a fortune; hedge funds really are pissing on the investment banks right now.

I've never quite understood this concept..
Can you explain it in baby language..

[NorthernMonkey]

Any company short-selling on those will be making a fortune; hedge funds really are pissing on the investment banks right now.

I've never quite understood this concept..
Can you explain it in baby language..

I've had a few beers but I'll try...

Let's say you own 100 shares in company X. I 'borrow' 50 shares from you and sell them on at £100 to another investor. At a later date I will have to return those 50 shares to you so I will have to purchase another 50 shares myself to settle the deal. Now, the only way I can possibly benefit from that situation is if the share prices drop - I sold the 50 shares I borrowed from you at £100, and at a later date bought 50 shares at say £90 to settle my debt with you and I am therefore left with £10 profit. Short-selling is gambling on share prices dropping. Does that make sense?

As for my hedge fund comment, hedge fund companies usually take high-risk strategies, e.g. short-selling, whereas investment banks tend to plod along making 'safer' investments, but many of them are full of money grabbing idiots who don't look beyond the end of their noses.

[Homebelly]

Any company short-selling on those will be making a fortune; hedge funds really are pissing on the investment banks right now.

I've never quite understood this concept..
Can you explain it in baby language..

I've had a few beers but I'll try...

Let's say you own 100 shares in company X. I 'borrow' 50 shares from you and sell them on at £100 to another investor. At a later date I will have to return those 50 shares to you so I will have to purchase another 50 shares myself to settle the deal. Now, the only way I can possibly benefit from that situation is if the share prices drop - I sold the 50 shares I borrowed from you at £100, and at a later date bought 50 shares at say £90 to settle my debt with you and I am therefore left with £10 profit. Short-selling is gambling on share prices dropping. Does that make sense?

Yeah..
Cheers..
That is how i kinda-sorta understand it..
I really have no feel for numbers...

[oblique strategies]

how does a bank go out of business?

By gambling with your money. i.e., speculation.

USA/global Situation:

AMY GOODMAN: What started all this?

NOMI PRINS: What started all of this was a complete lack of transparency and regulation in the banking system. If we go back to a history where we had a similar situation on Wall Street, which was 1929, when we had a stock market crash followed by a Great Depression, in 1932, when FDR was elected....He had to take a look at the banking system, which was undermining the general economy, which had undermined the general economy, and say, “You know what? We do not understand what’s going on here.

We have two types of banks. We have speculating investment banks, and we have commercial banks that deal with the public, take deposits, take savings, make mortgage loans, understand what’s going on. We’ll back those. The government will back those commercial institutions that deal with the public. It will not back speculative investment banks. And, by the way, those two things have to split. You pick a side. You want to be an investment bank? You be an investment bank. You want to be a commercial bank? We’ll back you. The Fed will back you. We will be there. We’ll create an insurance company, the FDIC, to back deposits for the public. We’ll have your back.” There was no—there was no agreement to have the back of the speculative investment banks.

Over the years, these things have merged and merged and merged. And in late 1999, Glass-Steagall, that act, was repealed, killed, died in Congress. And now you have a situation where everything that went wrong up until the creation of that act is happening now with a lot more capital and a lot more international interplay and a lot more money on the federal government to have to bail out when things go wrong. So, we have gone backwards in banking history, and having Merrill be a part of Bank of America is a tremendously big accident waiting to happen. Bear Stearns’s assets part of JPMorgan—they’re all part of recombining speculation and commercial.


MICHAEL HUDSON: That [inaudible] bailout. They’ve already spent $5 trillion in the last two weeks to double the size of the national debt by taking over Fannie Mae. How can they bail out the gamblers, how can they bail out Wall Street and not—and claim that the Social Security system doesn’t really exist? They’ve used the Social Security money basically for the bailout. There it goes. They’ve made a choice. The choice is to bail out Wall Street against the people.
The Treasury is supposed to represent the government and the economy, and the Fed is supposed to be the board of directors of commercial banks, but now Wall Street plays both sides of the game. It not only supplies the heads of the Fed; it supplies the Secretary of the Treasury. And that’s why I said the class war is back in business with a vengeance.

I'm not from the US, but I can tell you now that that is political nonsense at its best. Investment banks have and always will speculate, that's how they make money; retail/commercial banks are backed by the major investment banks, they are all part of the same chain. And the regulations argument is, to be honest, fucking pathetic - it doesn't matter how much regulation is in place, traders will always find a way around them in pursuit of money. Banks go out of business for one reason only - they borrow too much in the good times and make too little to finance their debts in the hard times. And as for the politicians, they'll bail out whoever they think will put them in a better light, whether that is the voting public or their financial backers.

Funny, but I interpreted some of the above to be in agreement with your statements. The entire interview is available here:

http://www.democracynow.org/2008/9/17/u ... f_aig_with

[NorthernMonkey]

Funny, but I interpreted some of the above to be in agreement with your statements. The entire interview is available here:

http://www.democracynow.org/2008/9/17/u ... f_aig_with

Some of it is, but the article is based (at least from my perspective) on political spin; other than the imposed regulations (and bail-outs!), banking has nothing to do with politics. As for AIG itself, the US government had no choice, if the company had collapsed I dread to think what the consequences would be - probably a major global financial meltdown.

[dcease]

bob has an ounce of premium shit. he let it go to you, since you his homie, for 250 cash, 3 out the door, hit him back at four, tomorrow or the next day, otherwise, you know what they say... so you flip 8's at 65, keeping one for yourself... not a bad days wage, room to move up, get yo' "hedge" fund up... if you can stand the work

[NorthernMonkey]

bob has an ounce of premium shit. he let it go to you, since you his homie, for 250 cash, 3 out the door, hit him back at four, tomorrow or the next day, otherwise, you know what they say... so you flip 8's at 65, keeping one for yourself... not a bad days wage, room to move up, get yo' "hedge" fund up... if you can stand the work

Spot on. It's all buying and selling for a profit, no-one cares what the commodity is.