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How to cut megabanks down to size

nytimes.com

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Re: How to cut megabanks down to size

#91

Post by qznc »

cynicalkane wrote: post #26
ataggart wrote: post #6

>small institutions must submit to the rigors of the free market. >market discipline has worked to keep smaller institutions on the straight and narrow, it has been ineffective with megabanks >market participants have proved [in]effective in monitoring risks at these [huge banks]. >They know they will be protected by a taxpayer rescue should a large institution teeter. How is this not obvious to everyone involved?

They are obvious and breaking up the banks is a popular topic of speculation in the finance industry. What's a mystery is why it is taking so long for mainstream econ and op-ed writers to catch on. Paul Krugman, for example, proposed that big banks like Citibank provide value by having a huge service network, and therefore he's skeptical of breaking up banks. Which is true--Citibank's size is the primary (and probabl…

The only one who should be allowed to be too big to fail is the government itself. The logical conclusion is that everything which should be really big should be owned by the government. Then win and loss is for the society as a whole.

Re: How to cut megabanks down to size

#92

Post by eru »

josephlord wrote: post #14
ataggart wrote: post #6

>small institutions must submit to the rigors of the free market. >market discipline has worked to keep smaller institutions on the straight and narrow, it has been ineffective with megabanks >market participants have proved [in]effective in monitoring risks at these [huge banks]. >They know they will be protected by a taxpayer rescue should a large institution teeter. How is this not obvious to everyone involved?

Smaller banks survived this crisis with relatively few failures but that has not always been the case (e.g. Savings and Loans crisis). However the fact that they can fail is critical and a sufficient reason to break them up even if it won't make them better. Banks that are too big to fail are too big to be allowed to exist. Government protection only for the commercial/retail part is an obvious but insufficient requi…

Why have government protection at all?

Re: How to cut megabanks down to size

#93

Post by [deleted] »

yummyfajitas wrote: post #65
alexqgb wrote: post #10

Earlier quoted context omitted.

Bullshit. If you're talking about the American people, the political will is there in spades. But thanks to gerrymandering and the filibuster, their voices been successfully nullified. The GOP holds the House by a wide majority, even though their members in it received fewer votes than the "minority" in opposition. And while the GOP has a numerical minority in the Senate, they still control the chamber since it (alon…

Vote totals for the bailout: Aye: 171 D, 91 R. Nay: 63 D, 108 R. http://www.opencongress.org/bill/110-h1424/show Why are you complaining about the GOP holding the house? Based on their votes, they seem to be the party of letting banks pay for their mistakes.

[deleted]

Re: How to cut megabanks down to size

#94

Post by flyinRyan »

rwmj wrote: post #13

I'm confused by this. The large banks are (arguably) more efficient because of economies of scale, eg. less duplicated management, purchasing power. So it's probably not a good idea to limit the size of banks which is what this article seems to propose, because that'll make banking more expensive. But the flip side is: why don't we just let megabanks go bust? If they go bust, the government steps in, briefly national…

>The large banks are (arguably) more efficient because of economies of scale, eg. less duplicated management

Someone has never worked in a large bank before.

Re: How to cut megabanks down to size

#95

Post by yummyfajitas »

alexqgb wrote: post #86
yummyfajitas wrote: post #65

Earlier quoted context omitted.

Vote totals for the bailout: Aye: 171 D, 91 R. Nay: 63 D, 108 R. http://www.opencongress.org/bill/110-h1424/show Why are you complaining about the GOP holding the house? Based on their votes, they seem to be the party of letting banks pay for their mistakes.

Why are you citing a vote from 2008 in reference to the Congress that was just elected in 2012?

I cited it because I don't believe the Republican position has changed.

Do you disagree? Perhaps Republicans hate the Tea Party so much that they decided to support bailouts just to spite them?

Re: How to cut megabanks down to size

#96

Post by alexqgb »

yummyfajitas wrote: post #95
alexqgb wrote: post #86

Earlier quoted context omitted.

Why are you citing a vote from 2008 in reference to the Congress that was just elected in 2012?

I cited it because I don't believe the Republican position has changed. Do you disagree? Perhaps Republicans hate the Tea Party so much that they decided to support bailouts just to spite them?

Um, the Bailout Bill was signed by George W. Bush - a Republican approving the work of his own cabinet.

The bailout wasn't the issue, by the way. Faced with a catastrophic crisis, propping up a criminal enterprise that we are utterly dependent upon is very much a lesser of two evils choice. The real problem is with sparing these bastards from even a hint of prosecution after the fact.

If you want a more accurate view of where the GOP stands today, consider Eric Cantor (i.e. their leadership) who actively courted Wall Street during the election, promising that the Republicans would provide "better service" and getting a highly disproportionate of the bribes (ahem) contributions in return.

And don't get me started on Elizabeth Warren. She was actively and articulately opposed to the criminal class that's developed in banking. And the agency she designed (the CPFB) was the target for the most vitriolic rage that the House Republicans have managed to date, and that's saying something, given who we're dealing with.

Re: How to cut megabanks down to size

#97

Post by yummyfajitas »

alexqgb wrote: post #96
yummyfajitas wrote: post #95

Earlier quoted context omitted.

I cited it because I don't believe the Republican position has changed. Do you disagree? Perhaps Republicans hate the Tea Party so much that they decided to support bailouts just to spite them?

Um, the Bailout Bill was signed by George W. Bush - a Republican approving the work of his own cabinet. The bailout wasn't the issue, by the way. Faced with a catastrophic crisis, propping up a criminal enterprise that we are utterly dependent upon is very much a lesser of two evils choice. The real problem is with sparing these bastards from even a hint of prosecution after the fact. If you want a more accurate view…

I didn't say opposition to bailouts was unanimous among Republicans, merely that the majority opposed them.

As for "criminal enterprise" and "prosecution", could you remind me what crime was committed, and by whom? Last I checked, taking a long position on housing (the cause of the crisis) wasn't a crime. If it was, we need to jail every homeowner.

Keeping Elizabeth Warren out of the public policy arena is a fantastic move. She is driven primarily by ideology, and displays a remarkable ability to state correct facts in a manner that misleads reporters and the public. See, for example, her nonsensical claims that medical costs cause millions of bankruptcies, or her confusing presentation of data in the "Two Income Trap" which obscures the fact that the primary cause of the two income trap is taxes.

Re: How to cut megabanks down to size

#98

Post by alexqgb »

yummyfajitas wrote: post #97
alexqgb wrote: post #96

Earlier quoted context omitted.

Um, the Bailout Bill was signed by George W. Bush - a Republican approving the work of his own cabinet. The bailout wasn't the issue, by the way. Faced with a catastrophic crisis, propping up a criminal enterprise that we are utterly dependent upon is very much a lesser of two evils choice. The real problem is with sparing these bastards from even a hint of prosecution after the fact. If you want a more accurate view…

I didn't say opposition to bailouts was unanimous among Republicans, merely that the majority opposed them. As for "criminal enterprise" and "prosecution", could you remind me what crime was committed, and by whom? Last I checked, taking a long position on housing (the cause of the crisis) wasn't a crime. If it was, we need to jail every homeowner. Keeping Elizabeth Warren out of the public policy arena is a fantasti…

Oh for god's sake. Are you really that uninformed about the crash? Do you honestly think it was simply banks "going long"? Tell you what, if it's an education you're after, see "Inside Job". It's right here, free and legal, for your convenience: http://vimeo.com/54817244.

For someone who knows as little about what actually happened as you appear to, it's probably the best crash course available.

Re: How to cut megabanks down to size

#99

Post by yummyfajitas »

alexqgb wrote: post #98
yummyfajitas wrote: post #97

Earlier quoted context omitted.

I didn't say opposition to bailouts was unanimous among Republicans, merely that the majority opposed them. As for "criminal enterprise" and "prosecution", could you remind me what crime was committed, and by whom? Last I checked, taking a long position on housing (the cause of the crisis) wasn't a crime. If it was, we need to jail every homeowner. Keeping Elizabeth Warren out of the public policy arena is a fantasti…

Oh for god's sake. Are you really that uninformed about the crash? Do you honestly think it was simply banks "going long"? Tell you what, if it's an education you're after, see "Inside Job". It's right here, free and legal, for your convenience: http://vimeo.com/54817244 . For someone who knows as little about what actually happened as you appear to, it's probably the best crash course available.

As I expected, you can't even articulate what crime you think was committed.

Re: How to cut megabanks down to size

#100

Post by alexqgb »

yummyfajitas wrote: post #99
alexqgb wrote: post #98

Earlier quoted context omitted.

Oh for god's sake. Are you really that uninformed about the crash? Do you honestly think it was simply banks "going long"? Tell you what, if it's an education you're after, see "Inside Job". It's right here, free and legal, for your convenience: http://vimeo.com/54817244 . For someone who knows as little about what actually happened as you appear to, it's probably the best crash course available.

As I expected, you can't even articulate what crime you think was committed.

You are correct. The scale of your ignorance combined with the depth of your obliviousness to it rendered me speechless. Should you actually have any curiosity here (which I suspect you don't), you'll find that the resource I provided offers a view vastly more comprehensive than any one person could include in a single HN post.

And not being one to suffer fools gladly, referring you to a comprehensive account of multiple, interlocking frauds spanning a variety of institutions spares me the effort of engaging with someone displaying a Creationist's level of epistemic closure. This particular discussion of rampant corruption and outright criminal conduct (fraud, mostly) has the added benefit of being a very high profile account. It has been widely circulated, closely examined, and generally accepted as a fair and accurate assessment. This level of exposure means you'll have an easy time verifying the claims, should you choose to do so (which, ha).

In the meantime, I'm going to go back to being amazed that someone discussing this in 2013 can do so without appearing to know what a derivative is, let alone how one works.

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