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Paul_M

Huntsman wants to break up the banks.

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It's fine by me. Taking deposits and giving loans is a banks core business. The rest of the highly leveraged, smoke and mirrors stuff should be isolated from every day depositors and the govts propensity to bail out the TBTF.

 

Would you support that? Why or why not?

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the govt shouldn't breaking them (any business) up.....they shouldn't be supporting them. Let the bad ones fail, let the good ones thrive.

 

the market will sort it out given the chance.

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Great. Break up the banks and then what do you do with all that debt?

 

which entity do you saddle with the debt?

 

Does the US Govt come in and recap the broken banks?

 

This brings us back to the Good Bank vs Bad Bank concept.

 

didn't we already run this road?

 

At some point, the market has to determine commercial viability regardless of the actions and influnce of the federal governement.

 

Did I tell you guys how 2012 is looking like dog poo?

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The market did determine that they would fail and they were bailed out. The corporate interests will always compel the govt to bail them out under threat of rumination of the global economy.

 

The debts still xist on somebodies balance sheet either way. Isn't neutralizing the threat down of another global economic meltdown tar more important than dividing up the debt?

 

Why shouldn't the govt determine that banks are limited to some certain core businesses? They were that way for a long time and made good money doing it. That won't stop anyone from opening an investment bank or hedge fund.

 

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The market did determine that they would fail and they were bailed out. The corporate interests will always compel the govt to bail them out under threat of rumination of the global economy.

The debts still xist on somebodies balance sheet either way. Isn't neutralizing the threat down of another global economic meltdown tar more important than dividing up the debt?

Why shouldn't the govt determine that banks are limited to some certain core businesses? They were that way for a long time and made good money doing it. That won't stop anyone from opening an investment bank or hedge fund.

 

 

here is the complexity of the problem

 

 

us banks have to compete globally

 

 

not long ago there were somthing like 20K banks in the US, and the next closest was Canada with like 10 (my numbers are off, but you get the picture)

 

 

so US banks started to merge and cross over to look more like the massive foriegn banks who were operating here under the Edge Act

 

 

now the banks have become so large and interwined that if one goes down they take down all the others (ie the systematic risk that no one can really figure out)

 

I don't think it's so much that they engage in investment banking businesses, I think it that they have gotten to oligoploy status that they act like sheep.

 

no long ago you had Chase, Chemical, Manufacturers Hanover and JP Morgan headqutered on the same street with materially different porfolios. Can anyone remember when Citi took a massive hit on the latin america debt, but the other NY banks were relatively OK?

 

 

Today, you miss a credit card payment and six CDO managers and ten banks are taken down.

 

 

 

 

 

 

 

 

 

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here is the complexity of the problem

us banks have to compete globally

not long ago there were somthing like 20K banks in the US, and the next closest was Canada with like 10 (my numbers are off, but you get the picture)

so US banks started to merge and cross over to look more like the massive foriegn banks who were operating here under the Edge Act

now the banks have become so large and interwined that if one goes down they take down all the others (ie the systematic risk that no one can really figure out)

I don't think it's so much that they engage in investment banking businesses, I think it that they have gotten to oligoploy status that they act like sheep.

no long ago you had Chase, Chemical, Manufacturers Hanover and JP Morgan headqutered on the same street with materially different porfolios. Can anyone remember when Citi took a massive hit on the latin america debt, but the other NY banks were relatively OK?

Today, you miss a credit card payment and six CDO managers and ten banks are taken down.

 

 

That's correct. It's that they have repeatedly engaged in unethical and criminal activity in their pursuit of profits and commissions putting their companies, the US banking system and the global economy at risk knowing the US govt will backstop them when it all blows up in their face.

 

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