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America will soon see a wave of bank mergers?

economist.com

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Re: America will soon see a wave of bank mergers?

#61

Post by newswasboring »

nicoburns wrote: post #60
newswasboring wrote: post #52

Earlier quoted context omitted.

I agree, if this was to happen it will have to happen with a third party. But America seems to be allergic to any third parties. For the longest time I used to think that the two party system is like a law in America or something. Like China has a one party system. When I learned that it isn't, i spent a considerable amount of time confused as to why then in all political discourse is the two party system so... enshr…

It's the First Past The Post voting system that leads to two parties.

My country also has a first past the post system. We still had several parties. In fact till about 15 years ago all states had their major parties which had significant presence in the federal parliament too. I don't think this is a valid explanation

Re: America will soon see a wave of bank mergers?

#62

Post by owenmarshall »

newswasboring wrote: post #52
gorbachev wrote: post #46

Earlier quoted context omitted.

That will never happen in our lifetime. Democrats can't do it, because Republicans will never cooperate with a Democratic Party president. Republicans can't do it, because they will continue to nominate a culture warrior whose only job is to fight wokeness, so they aren't even interested in it. This thing will keep escalating, relatively slowly, until it finally crosses the line and even the Republicans will figure o…

I agree, if this was to happen it will have to happen with a third party. But America seems to be allergic to any third parties. For the longest time I used to think that the two party system is like a law in America or something. Like China has a one party system. When I learned that it isn't, i spent a considerable amount of time confused as to why then in all political discourse is the two party system so... enshr…

> For the longest time I used to think that the two party system is like a law in America or something.

Not a law of the state, but a law nonetheless: https://en.m.wikipedia.org/wiki/Duverger%27s_law

Re: America will soon see a wave of bank mergers?

#63

Post by tormeh »

Waterluvian wrote: post #50
cyclecount wrote: post #2

All of the rules put in place after 2008 are being ignored; the number of banks in the US pre-2008 financial crisis was about 31k. Now there are close to 3000. After this wave of mergers, there might be around 1000! And a few will be so large that they can make insane bets, betting on risky and novel new investment vehicles that will (maybe initially) pay off handsomely before ultimately failing dramatically. This wi…

Canada has like 40 banks and strong regulation has kept them out of crises like in 2008. What’s the right number of banks per capita?

Easy to keep banks out of crises during good times.

Re: America will soon see a wave of bank mergers?

#64

Post by theK »

> In a gravitational system you have to make heavy things explode with grand force. Otherwise you just end up with a big lump of matter floating in oblivion.

Don't know where I read this but it changed my view of economics and capitalism.

Re: America will soon see a wave of bank mergers?

#65

Post by piva00 »

gorbachev wrote: post #46
newswasboring wrote: post #32

Earlier quoted context omitted.

America needs a leader who can inspire people to work with each other even when they don't agree on everything. I am quite sure you can build a significant coalition around financial issues, maybe even bigger than a super majority. But somehow people are not willing to work with each other unless they pass each other's purity tests. Thus, nothing changes and the status quo wins every time.

That will never happen in our lifetime. Democrats can't do it, because Republicans will never cooperate with a Democratic Party president. Republicans can't do it, because they will continue to nominate a culture warrior whose only job is to fight wokeness, so they aren't even interested in it. This thing will keep escalating, relatively slowly, until it finally crosses the line and even the Republicans will figure o…

My guess is that it will take a lot more than that, the USA needs to have a political system less reliant on boatloads of cash. Campaigns are spectacles, not political debate, spectacles are great entertainment but are very poor to foster any discussion around hard topics and solutions.

America's love of a good show made even politics like a big sport, team red and team blue against each other, fighting tooth and nail for turf (aka districts, electoral votes by States, etc.) and the team that is better funded usually will have a leg up. Just like sports.

The cultural change required to move politics away from this culture of spectacle and entertainment is way harder than what can be achieved in two generations.

Re: America will soon see a wave of bank mergers?

#66

Post by mtlmtlmtlmtl »

newswasboring wrote: post #61
nicoburns wrote: post #60

Earlier quoted context omitted.

It's the First Past The Post voting system that leads to two parties.

My country also has a first past the post system. We still had several parties. In fact till about 15 years ago all states had their major parties which had significant presence in the federal parliament too. I don't think this is a valid explanation

And what's the situation now?

Your country could gradually he heading towards a two party system.

Re: America will soon see a wave of bank mergers?

#67

Post by newswasboring »

mtlmtlmtlmtl wrote: post #66
newswasboring wrote: post #61

Earlier quoted context omitted.

My country also has a first past the post system. We still had several parties. In fact till about 15 years ago all states had their major parties which had significant presence in the federal parliament too. I don't think this is a valid explanation

And what's the situation now? Your country could gradually he heading towards a two party system.

No we are heading to a one party system. But that has nothing to do with first past the post. There are several historical and social reasons for that.

Re: America will soon see a wave of bank mergers?

#68

Post by jghn »

mjburgess wrote: post #31
passwordoops wrote: post #20

I've said it before, I'll say it again - "too big to fail" should be recast as "too big to exist" I'm not sure what the best solution is here, but making the big banks even bigger is not it. This is just going to make the banking system more concentrated and no concentrated market is good for anyone. Least of all because the past decade+ has set the precedent that the banks will be bailed out... If they're big enough

Well, I think we've discovered banking is a "public utility" -- things which are too big to fail.

that’s fine, but if we’re going that way then people shouldn’t be getting rich running them by socializing the risk and not the profits

Re: America will soon see a wave of bank mergers?

#69

Post by mrep »

senectus1 wrote: post #56
jliptzin wrote: post #53

It’s too late now, but the FDIC should just guarantee all deposits with no limit. If they did it with SVB they should do it for every other bank too moving forward. It is ridiculous to expect the average person to dig into bank balance sheets and try to determine whether their bank is managing risk properly. That would have prevented these runs, which counterintuitively means fewer FDIC payouts, not more. Then couple…

with what money will they guarantee all deposits? Governments dont have much money, they have taxes. when they can't tax their current voters they tax future voters by printing money. If you told the banks that you will protect their business regardless of what corrupt, stupid or greedy behavior's they practice... what do you think they'll do? this is so very screwed up.

> If you told the banks that you will protect their business regardless of what corrupt, stupid or greedy behavior's they practice... what do you think they'll do?

That's not what the FED is doing though. They are protecting the depositors not the business. The equity holders are getting completely wiped out and most of the employees at First Republic Bank are probably going to lose their jobs so the business is definitely getting screwed.

Re: America will soon see a wave of bank mergers?

#70

Post by hoseja »

wesapien wrote: post #16
cyclecount wrote: post #2

All of the rules put in place after 2008 are being ignored; the number of banks in the US pre-2008 financial crisis was about 31k. Now there are close to 3000. After this wave of mergers, there might be around 1000! And a few will be so large that they can make insane bets, betting on risky and novel new investment vehicles that will (maybe initially) pay off handsomely before ultimately failing dramatically. This wi…

You guys should be flipping cars when bank execs didn't get jail time for the financial crisis

It was called Occupy and it got shut down with extreme prejudice and we're still living in the psyop environment that is a response to it.
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