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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?

#401

Post by jillesvangurp »

4RealFreedom wrote: post #297
jillesvangurp wrote: post #58

Earlier quoted context omitted.

When banks collapse, it definitely is a federal emergency. That's the whole problem. The 2008 crisis was basically a lot of banks needing to be bailed out and people demanding that something should be done (by the powers that be, i.e. the feds). The current banking crisis is relatively minor in comparison but a nice wake-up call that banks can and do collapse if you don't regulate them and that they can do a lot of d…

Just because people say something is an emergency, doesn't mean it's constitutional to do anything about it.

Whether or not something is constitutional is fundamentally a political question decided by judges appointed by the senate who get to interpret what the centuries old text says and what that actually means in a modern context. And that text only means something when you get judges to act on that. Until they decide something is unconstitutional, nothing happens. And often they decide something is fine after all. That's why the political color of judges on the supreme court is so important. Because what they do is super political. And all of that is constitutional.

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

#402

Post by ThorsBane »

quickthrower2 wrote: post #9
lmpdev wrote: post #3

I know there are regulatory rules which partially explain the fragmented banking sector in the US compared to other nations: four example in Australia we only really have 4-5 proper banks Are there other reasons that small banks have seemed to thrive in the United States but no where else?

There are 95 banks in Australia. [1] That is 3.6 microbanks per person The US has 9 microbanks per person, but based on the prediction of 1000 banks would be similar to Australia. [1] https://www.ausbanking.org.au/insight/banking-by-numbers

Nice, I like lots of banks across the land.

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

#403

Post by imtringued »

toomuchtodo wrote: post #143
bradleyjg wrote: post #129

Earlier quoted context omitted.

> stick them in with the fed providing 4% interest Where is this risk free return coming from? You are just saying in more words that the government should give the people what they want.

https://www.brookings.edu/blog/ben-bernanke/2016/02/16/the-f...

That article says that the Fed chooses interest on reserves to be below the market rate of interest...

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

#404

Post by imtringued »

User23 wrote: post #285
akira2501 wrote: post #279

Earlier quoted context omitted.

> Thankfully, our currency’s value is notional and the fed can print more until such time as the bank run ends. It's value is not notional. If you make more currency then all currency in circulation now has less value. "Quantitative Easing" is simply a way of taxing you after the fact. Worse still if bonds are involved. Now it's a way of taxing your children before they're even born.

> It's value is not notional. If you make more currency then all currency in circulation now has less value. That's not how pricing works. It's easy to see. Consider the following. Treasury could mint a 10^33 dollar platinum coin[1], stick it in a vault at Fort Knox, and forget about it. At that point the money supply would nominally be almost all in that vault. Yet prices not only wouldn't go asymptotic, they wouldn…

A lot of hyperinflations follow this simple pattern.

The government is bankrupt for whatever reason. It has to create new money. Then inflationgets worse and the government introduces price controls. Businesses quit (or are shut down by the government for violating price controls) because they have to pay inflated prices but sell at regulated prices, ending up with a loss, inflation gets worse because of a lack of supply, more businesses quit as they start making losses.

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

#405

Post by SamReidHughes »

than3 wrote: post #366
0zemp2c wrote: post #257

Earlier quoted context omitted.

yes, and now they are "attacking" PacWest, whose stock is plummeting like First Republic its an easy cycle - find a bank you want for nothing, feed bad press through the usual outlets, watch it fall, then watch depositors get spooked, then buy it for nothing First Republic is probably just one of many banks intended to be undermined, trashed, and then sold for nothing and remember all the times First Republic's CEO c…

Am I wrong in thinking that all banks should have no exposure to the stock market period? The whole being able to trigger aggregate indebtedness violations through synthetic shares (options), seems like a systemic risk that no ones paying attention to. Also, its hard to say we still have a fractional reserve system when required deposits have been set at 0% since the pandemic. There's no fraction, its 0 unless you ch…

What exposure to the stock market are you talking about?

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

#406

Post by diordiderot »

fowtowmowcow wrote: post #352
diordiderot wrote: post #319

Earlier quoted context omitted.

Your thinking is too fine grained. Missing forest through the trees. For a nation state with it's own currency, money is the sum of the production capacity / natural resources of that nation state. You don't need Joe and Sue to pay you back.

Okay Joe and Sue don't pay back their loan. Either Beth now has to borrow for her house or business at a higher rate of interest OR we deflate the value of the currency (by increasing the money supply) to make up for the loss on the balance sheet. Congratulations your civilization just discovered run away inflation.

The house is still there, it is repriced and sold.

The bank cannot lose money because money is a representation of all production and resources in the economy. (Edit: balance sheet is always zero)

There is no deflation because you are the bank and you can print money.

There isnt inflation because you can tax assets or reduce velocity of money (i.e. inflation) through transaction tax.

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

#407

Post by selimthegrim »

4RealFreedom wrote: post #297
jillesvangurp wrote: post #58

Earlier quoted context omitted.

When banks collapse, it definitely is a federal emergency. That's the whole problem. The 2008 crisis was basically a lot of banks needing to be bailed out and people demanding that something should be done (by the powers that be, i.e. the feds). The current banking crisis is relatively minor in comparison but a nice wake-up call that banks can and do collapse if you don't regulate them and that they can do a lot of d…

Just because people say something is an emergency, doesn't mean it's constitutional to do anything about it.

We have about a gazillion gazetted presidential emergency orders plus the National Emergencies Act the courts seem ok with so far.

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

#408

Post by IAmGraydon »

helsinki wrote: post #394
IAmGraydon wrote: post #289

Earlier quoted context omitted.

>These banks are counting on "Too big to fail"... and the politicians will back it. To back it they will print money, which will devalue the currency and drive up inflation. Bailing out depositors isn't going to increase inflation - you're just giving people the same amount of money they already have. The big problem with it is that it prevents the natural process of wealth destruction from occurring, so it may just…

>Bailing out depositors isn't going to increase inflation - you're just giving people the same amount of money they already have. That’s not how it works. The original funds do not evaporate out of thin air. They transferred to the opposite side of the trades that the banks are making, meaning customers’ funds are melting into the pockets of hedge funds, etc. So, in effect, it is the opposite of what you’re stating.…

I’m afraid you’re the one who doesn’t understand how it works. The banks are buying treasuries from the US Govt with customer deposits, which are then being devalued as bond yields rise. They are then being forced to liquidate those devalued bonds before maturity to cover withdrawals. There isn’t a hedge fund on the other side.

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

#409

Post by nickjj »

HWR_14 wrote: post #399
nickjj wrote: post #354

Earlier quoted context omitted.

That's such a strange system if common routine things aren't counted towards your score. Is this a ploy to get you to buy things you don't need just to prove you can pay it back? Personally I've never owned a credit card, I always pay with a debit card or cash. 20 years ago I refused to participate in the credit scoring system and still stand by it.

I don't think it's a ploy. I think it's an accident of how the people who designed the credit score used credit. And then inertia keeping things from being updated.

It's messed up because rent could be let's say $800 to $3,500 a month, if paying that every month on time isn't an indicator that you have consistent income to reduce risk on other loans then I don't know what is. It's especially messed up if the same system will ding your score if you buy $8 headphones and forget a payment.

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

#410

Post by WeylandYutani »

WaxProlix wrote: post #378
teekert wrote: post #369

Earlier quoted context omitted.

I always find this to be a baffling thing about the American system. Where I live we never take out a loan (except for houses) and most cards are debit cards. The American system seems to punish the way we act here, like you, you can be perfectly credit worthy but you have not been a good loan-taking rent-paying citizen? It feels dirty to me.

What metrics do they use there to determine your loanworthiness?

Monthly income and outstanding debts.
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