Skip to comments.Wall Street is back
Posted on 05/13/2013 10:11:18 AM PDT by 1rudeboy
American investment banks dominate global finance once more. Thats not necessarily good for America
FOR a few tense weeks in 2008, as investment-bank executives huddled behind the imposing doors of the New York Federal Reserve, Wall Street seemed to be collapsing around them. Lehman Brothers filed for bankruptcy, Merrill Lynch collapsed into the arms of Bank of America. American International Group (AIG) and Citigroup had to be bailed out and the rot seemed to be spreading. Hank Paulson, the treasury secretary at the time, recalled in his memoir that: Lose Morgan Stanley and Goldman Sachs would be next in lineif they fell the financial system might vaporise.
Across the Atlantic, European politicians saw this as the timely comeuppance of American capitalism. Angela Merkel, Germanys chancellor, blamed her peers in Washington for not having regulated banks and hedge funds more rigorously. European banks saw the crisis as their chance to get one up on the American banks that had long dominated international finance. Barclays quickly pounced on the carcass of Lehman Brothers, buying its American operations in what Bob Diamond, the head of its investment bank at the time, called an incredible opportunity to gain entry to the American market. Deutsche Bank, a German giant, also expanded to take market share from American rivals. The dominance that American firms had long exerted over global capital markets seemed to have come to an abrupt end.
Almost five years on it is Europes banks that are on their knees and Wall Street that is resurgent.
(Excerpt) Read more at economist.com ...
A “resurgent Wall Street”, hm?
The question is, how does The Street lure back the small investors? Because they sure ain’t buying stocks like they used to!
Should this be titled “Wall Street is Back”, or “Big Daddy Government is Now Sleeping on the Couch!”
“Wall Street,” in the context of this column, means “investment banking.” It’s a little surprising that few people get it.
It’s amazing what $20 trillion or so in taxpayer money can do.
$20 trillion? Wow, talk about inflation.
” Should this be titled Wall Street is Back, or Big Daddy Government is Now Sleeping on the Couch!”
Goldman Sachs i.e. The White House, is doing fine, so all is well : )
Watch this video-”electronic run on the banks”-Kanjorski-2009.
At about the 2:15 point in the video, Kanjorski talks about a “tremendous draw-down of money market accounts”-550 BILLION dollars, in less than an hour.
Remember when Hussein and McCain came back from the campaign trail when this happened?
Pres. Bush looked scared to death, McCain looked very concerned, and Hussein looked bored. (thanks, soros-fool us once...)
Someone is trying to bait the little guy back into the market—NONE for me!
Sell! Sell! Sell!
We do want big players to be healthy, but we don’t want it at the expense of the average Joe. And as for as U. S. Government investments in Wall Street, hell no.
Wall Street is back? Did it bring back my money?
This whole idea of an 'investment banker' on 'Wall St' is a crock. In real life the term 'investment banker' can refer to anyone working in the capital markets, but in the Economist/loony-left/Obamafaction world it's the evil exploiting pin stripe capitalist yadda yadda. Even the idea of a Wall St. is bogus. OK, so maybe 50 years ago something actually physically happened there but capital markets have long since gone electronic; even the NYC financial offices have moved uptown. All that's left on south Manhattan is the image:
What toxic debt?
Taxpayer money? Where?
That was funny. And inaccurate.
The Economist was always squishy. In the recent past, it has become more so. I agree. I still look in on it now and then.
Are you claiming the MBS the Fed is buying is toxic?
And you can keep avoiding the question.
What does that have to do with your MBS claim?
And you were working for some company bailed out; as you said before.
Wrong and wrong.
You're on a roll.
We all know people are struggling with house payments.
Some people. But many others have refinanced to ridiculously low rates and reduced their overall debt.
Correcting your errors makes me pro-bailout?
The Fed buying up more home loans isnt the fix and you know it.
I wonder where I claimed it was?
So who are you defending here, Obama? The Fed? Bernanke?
I'll defend to the death, your right to make silly, error-filled claims.
Looking for proof of claims. You keep running from yours.
Absolutely --me too and likewise w/ the NYT, BBC, & the LAT. Sure they can turn the stomach but there are gems. Kind of like picking though a full toilet for the accidently dropped gold ring but always worth the trouble.
Help me out, I can't find where Todd said anything about using the treasury --on this thread.
Yes, you said the Fed was buying toxic debt. So prove it.
Yes, I already saw your silly claim about toxic debt.
Well, tell ya what, ping me back on the thread when The Fed gets all those loans paid back.
They're guaranteed......the opposite of toxic.
They're guaranteed. They trade above par. Tell me your definition of toxic.
So, if that is so, why is QE3 necessary?
I don't think it is, but with the idiot we have in the White House........
Agency MBS is guaranteed. Even if the borrower defaults, payments are made to the bond holder.
What with the deficit just growing and growing.
Yes, Bush spent way too much. Obama makes Bush look like a skinflint.
The Fed buying program does not add to the deficit.
Ah, now I follow you --so Bloomberg says the Fed's buying $40B/month in MBS's. Well, sort of.
It's true that back then the FOMC did say they'd buy 'em up to $40B/mo. and the record of what they actually did buy shows they'd started already w/ $800B worth of MBS's and they've been selling some off while they've been buying. What's interesting is that mortgage interest rates have fallen to 3.5% (as was the Fed's reason for all this stuff in the first place) and the low interest rates helped make the default rate drop to 1% (also the Fed's goal) so that means the Fed's current $1.12T holdings is raking in $28B per month profit. That all means also that the MBS's are still selling at face value so as of today they're not "toxic".
OK, the sky might fall tomorrow and if it does then we can call the MBS's "toxic"; until then we can continue cutting a profit.
The agencies buy mortgages, package them and resell them. They charge a fee.
So the private bankers take the responsibility for the $480 billion?
Taxpayer funds aren't used. The Fed has a printing press. What private bankers?
Your number is off, they only made a total of $91 billion last year.
Nope. It's the government.
If theyre printing money, are they not putting that against something on some sort of balance sheet?
The money they create is their liability, their asset is the bond (Treasury or MBS) they buy.
I guess one could say the loans are assets, and the printing of the money are the liabilities
During the crisis they made lots of loans, not now. Just bond purchases.
Your number is off, they only made a total of $91 billion last year.
Let's see my number was from the Fed links @ $28B = $1.12T X (3.5% - 1%) --wait a sec, that should also have ÷ 12mo./yr so the $28B is per year. Aw what the heck, $28B/yr is still not "toxic". BTW, where did the $91B come from?
This is all way past my bed time...