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Netherlands45349 Posts
More regulation is fine(and not mutually exclusive) but if the core is still splitting up these banks then its just a bad idea unless he can explain otherwise, which he hasn't. Your explanation is "he will fix loopholes" and some vague "larger point" that GS doesn't neccesarily accomplish, I don't even know what that means, what its supposed to mean and whether its mutually exclusive to some form of splitting up banks in two types.
There are valid arguments to be made for downsizing banks (dangerous but still more realistically viable). but I just don't see how any interpretation of splitting up these banks will lead to good things and not hurt both the American economy and the average American citizen for very little gain, im happy to concede if someone can show me that but I just don't see it.
So yes, these things sound fancy but in the end will just lead to misery unless he can explain to me why it wouldn't. He points out problems but offers either no good solution or no way to attain that solution.
On April 15 2016 18:39 Velr wrote:
So it Comes down to:
Berine: "We really should do something and this time do it right but i have no clue how yet."
Hillary: "Not so fast, we can't have everything we want and we have to take other oppinions into account."
Trump: And Mexico is gonna pay for it!
Is this really the "dept" of the political discourse in the US?...
To be fair ive seen some "political discourse' videos of the UK and Netherlands and.....
yeah its not much better a lot of the times, maybe bigger words but thats about it.
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Why will it hurt the American economy and citizens to break up the banks?
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Netherlands45349 Posts
On April 15 2016 19:40 GreenHorizons wrote:
Why will it hurt the American economy and citizens to break up the banks?
Moreover, the rest of the world will not split between banks, that is to say that American banks would suffer significantly while foreign banks won't. The problem with that is that a lot of banks will lose a large amount of stock value and devaluate. Americans who have 401ks, mutual funds or hell even some pensions would lose a significant amount of value which is damaging to a lot of Americans.
I may have worded that confusingly, breaking up banks and splitting them up between retail and investment are two different things, the latter is a terrible idea for the reasons I already stated.
The former is also problematic because of the same reason (more limited but still applicable) other banks won't follow suit, Barclays will be as huge as ever, Chinese/Japanese banks will be as huge as ever. Splitting up say JP Morgan (which in its own is like 10x the size of Goldman Sachs) in 100 little parts will severly hurt these banks on the international market(once again leading to a significant drops in stocks for the average American pension fund etc). They will also have less capital to combat setbacks because they aren't allowed to hold that much capital in the first place. Having better regulation on for example the amount of minimal capital or common stock they are allowed to have is a better way to go about it, this will admittedly make competition harder but not as bad as splitting JP morgan or Bank of America up in +100 little parts.
As for the economy, the finance sector is about ~8%(correct me if i'm wrong) of America's GDP, they need that finance sector to be attractive.
Measures like these would work if international trade agreements can be completed where every bank in the world would follow suit(I believe some things like that are in the works) but until they are actually realistically manageable then it will put the American economy and citizens on the backfoot.
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On April 15 2016 19:56 Kipsate wrote:Show nested quote +On April 15 2016 19:40 GreenHorizons wrote:
Why will it hurt the American economy and citizens to break up the banks? Show nested quote +Moreover, the rest of the world will not split between banks, that is to say that American banks would suffer significantly while foreign banks won't. The problem with that is that a lot of banks will lose a large amount of stock value and devaluate. Americans who have 401ks, mutual funds or hell even some pensions would lose a significant amount of value which is damaging to a lot of Americans.
I may have worded that confusingly, breaking up banks and splitting them up between retail and investment are two different things, the latter is a terrible idea for the reasons I already stated. The former is also problematic because of the same reason (more limited but still applicable) other banks won't follow suit, Barclays will be as huge as ever, Chinese/Japanese banks will be as huge as ever. Splitting up say JP Morgan (which in its own is like 10x the size of Goldman Sachs) in 100 little parts will severly hurt these banks on the international market(once again leading to a significant drops in stocks for the average American pension fund etc). They will also have less capital to combat setbacks because they aren't allowed to hold that much capital in the first place. Having better regulation on for example the amount of minimal capital or common stock they are allowed to have is a better way to go about it, this will admittedly make competition harder but not as bad as splitting JP morgan or Bank of America up in +100 little parts. As for the economy, the finance sector is about ~8%(correct me if i'm wrong) of America's GDP, they need that finance sector to be attractive. Measures like these would work if international trade agreements can be completed where every bank in the world would follow suit(I believe some things like that are in the works) but until they are actually realistically manageable then it will put the American economy and citizens on the backfoot.
So the argument is that essentially that we are already hostages of big banks nationally and globally and the best we can do is continue to try to squirm out of our restraints?
We can't do what needs to be done because other nations are too stubborn/ignorant to see the risks. If that's the argument I get it and I see some merit, but it also is reminiscent of the cold war. I'm not sure the same strategy will work especially when they are actually creating infrastructure and goods and we aren't making much at all with all our cold war esque spending (other than military equipment and infrastructure for countries we'll be invading in decade to destroy said infrastructure and rid them of the weapons we gave them (like we have been for the last 40 or so years).
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I'm not defending the big banks here, Can't stand them, but breaking up a JPM would cause extreme turmoil in the derivative market.JPM had 56.6 Trillion in derivatives at June 30, 2015 http://www.bloomberg.com/news/articles/2015-06-29/citigroup-overtakes-jpmorgan-as-biggest-u-s-derivatives-dealer
Basically the entire US financial system is ready to collapse, best not to rock the boat, give people as much time to prepare as possible.Unless anyone wants to argue that one bank having four times US GDP in derivative bets is anything other than totally insane?
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Cayman Islands24199 Posts
it should be clear by now that it doesn't matter what kind of dumb disqualifying stuff sanders says, his supporters just don't recognize them as such.
'how do you want to get jerbs'
'raise minimum wage'
lmfao like wow
would not call it demagoguery because bernie isn't too sharp himself.
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On April 15 2016 20:36 iPlaY.NettleS wrote:I'm not defending the big banks here, Can't stand them, but breaking up a JPM would cause extreme turmoil in the derivative market.JPM had 56.6 Trillion in derivatives at June 30, 2015 http://www.bloomberg.com/news/articles/2015-06-29/citigroup-overtakes-jpmorgan-as-biggest-u-s-derivatives-dealerBasically the entire US financial system is ready to collapse, best not to rock the boat, give people as much time to prepare as possible.Unless anyone wants to argue that one bank having four times US GDP in derivative bets is anything other than totally insane?
That sounds like a yes. That's a dangerous game of chicken that we seem to be losing, as far as I can tell.
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Why will it help the citizens of the US and the economy to break up banks?
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On April 15 2016 20:55 oneofthem wrote:
it should be clear by now that it doesn't matter what kind of dumb disqualifying stuff sanders says, his supporters just don't recognize them as such.
'how do you want to get jerbs'
'raise minimum wage'
lmfao like wow
would not call it demagoguery because bernie isn't too sharp himself.
Is there any candidate you're in favour of? Or are you done with the whole political system? Because if such statements put you off, you clearly must be done with the whole system.
Please don't tell me you like Trump, Cruz or Clinton. Please.
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On April 15 2016 21:31 beg wrote:Show nested quote +On April 15 2016 20:55 oneofthem wrote:
it should be clear by now that it doesn't matter what kind of dumb disqualifying stuff sanders says, his supporters just don't recognize them as such.
'how do you want to get jerbs'
'raise minimum wage'
lmfao like wow
would not call it demagoguery because bernie isn't too sharp himself. Is there any candidate you're in favour of? Or are you done with the whole political system? Because if such statements put you off, you clearly must be done with the whole system. Please don't tell me you like Trump or Clinton. Please.
Trump or Clinton, basically the same thing right? If only sheeple would wake up and #REVOLUTION, maybe we'd be able to send a man to mars.
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Cayman Islands24199 Posts
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June 25 2015, come on breh.
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Cayman Islands24199 Posts
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On April 15 2016 21:31 beg wrote:Show nested quote +On April 15 2016 20:55 oneofthem wrote:
it should be clear by now that it doesn't matter what kind of dumb disqualifying stuff sanders says, his supporters just don't recognize them as such.
'how do you want to get jerbs'
'raise minimum wage'
lmfao like wow
would not call it demagoguery because bernie isn't too sharp himself. Is there any candidate you're in favour of? Or are you done with the whole political system? Because if such statements put you off, you clearly must be done with the whole system. Please don't tell me you like Trump, Cruz or Clinton. Please.
He supports Clinton to my knowledge.
And really, his statement is mostly in reference to Sander's lack of any credible plan for implementation of most/all of his progressive planks. He has not demonstrated a realistic political strategy to implement his highly progressive platform and the platform itself is highly flawed when put under scrutiny by policy analysts, economists, and experts. The NYDN interview really set off alarm bells for those voters (like me) who are primarily interested in the nuts and bolts, as opposed to broad, sweeping populist rhetoric that candidates all tend to adopt.
In terms of a realistic, implementable, and generally sound set of progressive policy goals and initiatives, you'd be looking at Clinton. At this stage, my general impression is that Bernie is closer to Trump in terms of policy knowledge in my mind than the remaining candidates, which leaves me somewhat pained.
On another note:
http://www.realclearpolitics.com/articles/2016/04/15/sage_advice_from_a_foreign_policy_veteran_130289.html
A good article.
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On April 15 2016 21:25 RvB wrote:
Why will it help the citizens of the US and the economy to break up banks?
To big to fail, to big to function. The banks are so large and driven by profit above all else that they are risks to the US citizens. JPM Chase was caught foreclosing and defaulting a large number of people who were on active duty(super illegal) just because it was faster than doing their due diligence. Bank of America not only foreclosed on the wrong house at one point, but kept trying to do it over and over, until the couple won a judgment against them. And then that couple foreclosed on the local branch of BoA to collect the judgment.
Banks big, dumb, slow to change and do stupid things all the time. And they are so massive that its almost impossible to investigate them because of the diffusion of responsibility and information.
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1) Displays of gross incompetence occurs no matter if it's a big or small business.
2) Should also be noted that the primary instigator of the financial crisis was not "big banks", but the shadow banking done by smaller institutions like AIG and, more specifically, Countrywide and WaMu, who issued the massive amounts of sub-prime mortgages.
3) What is the legal precedence for this, and how would you make a case to do so legally, If it's not possible within our current legal framework, what type of legal reforms do we need to pass make it possible, and make it not just an exercise in rhetoric?
4) It should be noted that the presence of big banks were important to soaking up and averting catastrophe in 2007. as a number of insolvent shadow banking institutes were bought by larger ones, who absorbed the toxic assets at a detriment to their own solvency (with Fed guarantees and injections of capital) to prevent a cascading financial collapse. The acquisition of Merrill Lynch and Countrywide by Bank of America, for instance.
5) I'm generally not sure why people believe breaking up large banks would have a positive economic effect on the US economy, and why having a large number of small banks is a better composition of the financial industry. That would be making nearly the same fallacy that Jackson made in regards to the Second Bank of the United States, and the direct role that decision took in instigating the massive recession of 1837.
When discussing to-big-to-fail in the context of 2007, the primary issues was a lack of regulation regarding the shadow banking sector (which new regulations are in place now, more perhaps may be needed), and that the ENTIRE FINANCIAL SYSTEM was threatening to collapse with the massive loss in capital and liquidity caused by the bursting of the housing bubble, not just a few big banks.
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For people doing a lot of international travel I like I do, break up big banks most likely will have some inconvenience.
It's pretty nice to stick BoA card in a random local ATM and get cash I have to say
Now, breaking the banking and investment sector would be nice, but banking is a pretty fruitless service on its own,
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The banks can be as large as they want as long as people go to jail for fraud and gross negligence when they take place. Currently that is not taking place. I don’t believe there is any reason to believe that the banks being huge is a benefit to the economy either. Their size is one of the main reasons why they are so difficult to regulate. From personal experience, finding someone who is able to make decisions about cases is very difficult due to the way they diffuse responsibility.
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Cayman Islands24199 Posts
the size with banks is mainly to compete internationally with other financial centers. size gives a lot of advantages in banking, particularly when balance sheet strength is important
big banks do bring down systems when they fail, but so would a bunch of small banks all doing the same group think/faced with cyclic conditions that encourage bubbles. but big banks also have bigger buffers and are harder to fail, and in some sense easier to regulate directly.
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Because size is an important consideration vis a vie banking influence and ability to compete, there needs to be a legal framework through which liability for fraud and other sorts of misdealings can be assessed without jeopardizing the financial security of the environment in which the bank operates. Chopping things up doesn't really fix the problem and it raises new ones on its own.
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