Banks Archive

Galbraith on Keynes vs Hayek

Well worth a quick read. John Maynard Keynes Knew What Occupy Wall Street Tells Us Today: “Banks and bankers are by nature blind.” By James Galbraith November 11 (Alternet) — Economist Friedrich Hayek is the darling of conservatives. Progressives prefer John Maynard Keynes. But when it comes to sensible policy, there’s really ...Read More

China Extends Crackdown on Off-Balance-Sheet Loans

Cutbacks now will further slow things: China Extends Crackdown on Off-Balance-Sheet Loans July 4 (Reuters) — China’s bank regulator has cracked down on off-balance-sheet lending by the country’s banks, sources told Reuters on Monday, its latest step to prevent over-zealous and risky lending from hurting its financial system. China Banking Regulatory Commission ...Read More

Major Banks Likely to Get Reprieve on New Capital Rules

The real problem is if you understand what a bank is, you wouldn’t be trying to use capital ratios to protect taxpayer money. First, notice that the many of the same people clamoring for higher capital ratios have also supported ‘nationalization’ of banks, which means there is no private capital. So it ...Read More

Why it is likely the banks ARE solvent

[Skip to the end] The FDIC has a legal responsibility to take over insolvent banks. They have aggressively done that, including taking over WAMU for liquidity concerns when it was legally solvent. I view that as overly aggressive, as the banking model includes FDIC insured deposits for the further purpose of not ...Read More

Re: fixing the banks and the economy

[Skip to the end] (email exchange) Comes down to the fundamentals of banking and public purpose. Presumably it serves public purpose for banks to have private equity capital as a ‘first loss’ piece to ‘protect’ government from loss due to deposit insurance. Either it does or it doesn’t suit public purpose to ...Read More

A blurb from a broker

(email) > > An impressive November Factory Orders report offered a respite from the > recent round of weak economic data. Yes, and maybe even nudge up Q4 forecasts (forecasting the past). Also, if you look at the continuing claims graph since 1980, it is very low, especially when considering the growth ...Read More

Re: liquidity or insolvency–does it matter?

(email with Randall Wray) On Dec 15, 2007 9:05 PM, Wray, Randall wrote: > By ________ > > This time the magic isn’t working. > > Why not? Because the problem with the markets isn’t just a lack of liquidity – there’s also a fundamental problem of solvency. > > Let me ...Read More

Fed’s best move

From the Fed’s theoretical framework, their best move is: ♦ Cut the discount rate to 4.5 ♦  Leave fed funds at 4.5 ♦ Remove the stigma from the window ♦ Allow term window borrowing over the turn ♦ Accept any ‘legal’ bank assets as collateral from member banks in good standing ♦ ...Read More

UBS to sell stakes after $10 billion in subprime losses

Another example of a chunk of the losses being contained on Wall Street, and not leaking to Main Street this will now have zero effect on aggregate demand and there seems to be no business interruption. So as long as the losses stay spread out enough to not impair business operations and ...Read More