the finance industry / wall street

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As you probably know, I'm not a lawyer; I'm an amateur asshole.

(just a joek, kidz)

World Congress of Itch (Dr Morbius), Thursday, 10 May 2012 21:53 (1 year ago) Permalink

improvised explosive advice (WmC), Thursday, 10 May 2012 22:22 (1 year ago) Permalink

Anyway my gripe about that line ("why haven't these guys gone to jail?") is that actionable criminal fraud makes up a tiny portion of what went wrong with our economy, and while it is often metaphorically accurate to say "these guys are crooks", it's rarely literally provably true. Further, it seems to me that the lust for a public hanging kind of distracts from the much bigger, harder systemic problems that need addressing.

Scott, bass player for Tenth Avenue North (Hurting 2), Thursday, 10 May 2012 23:35 (1 year ago) Permalink

if criminal prosecution leads to nationalizing the financial institutions responsible, that seems like a great step forward towards addressing the systemic problems.

Philip Nunez, Thursday, 10 May 2012 23:43 (1 year ago) Permalink

how would criminal prosecution lead to nationalizing financial institutions?

Scott, bass player for Tenth Avenue North (Hurting 2), Thursday, 10 May 2012 23:44 (1 year ago) Permalink

if nobody's left to run it because they're all in jail, that seems like an excellent rationale for govt seizing control. i'm not sure, but can the govt be plaintiff against banks in a civil suit? that seems like another avenue to seize assets.

Philip Nunez, Thursday, 10 May 2012 23:46 (1 year ago) Permalink

so not gonna happen

mookieproof, Thursday, 10 May 2012 23:56 (1 year ago) Permalink

oh nothing good's gonna actually happen, but we have to go out Alamo-style.

World Congress of Itch (Dr Morbius), Friday, 11 May 2012 01:09 (1 year ago) Permalink

Right, inflation is bad for savers of money and people on fixed income, good for people with debt, and kind of neutral for everyone else as long as it doesn't get out of control (all other things being equal, wages rise with inflation).

this is true but again, we don't really have inflation. we just have low rates, which are also good for debtors and bad for savers (but are also good for equities since it forces money [that wants returns] out of bonds and into riskier investments.). but we don't have prices increasing at a striking rate (recent episodic commodities bubble aside). and i've said this before, but i'm pretty dubious that the low rates are a result of fed policy at all, actually. There's enough demand for relatively safe assets that rates would probably be very low anyway.

s.clover, Friday, 11 May 2012 01:21 (1 year ago) Permalink

Right, didn't mean to suggest we are seeing inflation, although I do think that the expanded money supply has contributed to mini-asset-bubbles. I think what it HAS maybe done is exerted enough upward pressure on prices to keep them from deflating, which is what I meant in my prior post.

That's an interesting theory about the demand for safe assets, and one I hadn't heard. But it seems like it almost has to be true that rates are lower than they would be without fed intervention. I mean the fed has spent, what, over a trillion dollars buying treasuries? And how big is the entire treasury market? 10 trillion? I can't find a clear number in my quick google search, but the additional demand added by the fed's buying would have to make a significant difference to rates, even if they'd be low anyway, I'd think.

Scott, bass player for Tenth Avenue North (Hurting 2), Friday, 11 May 2012 14:00 (1 year ago) Permalink

hahaha yeah I was going to post about that

Scott, bass player for Tenth Avenue North (Hurting 2), Friday, 11 May 2012 15:05 (1 year ago) Permalink

Wait, so JPM literally just did the math wrong? Like they didn't underestimate the risks of anything, but rather actually crunched numbers wrong? That's a little unsatisfying.

Scott, bass player for Tenth Avenue North (Hurting 2), Friday, 11 May 2012 15:09 (1 year ago) Permalink

I don't think anyone really knows. I think it really is about underestimating the risks. Not like adding numbers wrong, but adding the wrong numbers, so to speak.

s.clover, Friday, 11 May 2012 15:28 (1 year ago) Permalink

Anyway my gripe about that line ("why haven't these guys gone to jail?") is that actionable criminal fraud makes up a tiny portion of what went wrong with our economy, and while it is often metaphorically accurate to say "these guys are crooks", it's rarely literally provably true. Further, it seems to me that the lust for a public hanging kind of distracts from the much bigger, harder systemic problems that need addressing.
--Scott, bass player for Tenth Avenue North (Hurting 2)

Seriously JAIL THE BANKSTERS makes me want to throw myself off a bridge.

BIG HOOS aka the steendriver, Tuesday, 15 May 2012 13:24 (1 year ago) Permalink

i don't even know where to put this:

http://www.bloomberg.com/news/2012-05-17/dental-abuse-seen-driven-by-private-equity-investments.html

almost too fucked up to comprehend

goole, Thursday, 17 May 2012 20:36 (1 year ago) Permalink

with each passing day I am more and more 'lol capitalism' (but also sad)

dayo, Thursday, 17 May 2012 22:42 (1 year ago) Permalink

kind of lol but mostly smash

BIG HOOS aka the steendriver, Thursday, 17 May 2012 22:46 (1 year ago) Permalink

i know it for true that plenty of med mal lawyers really don't like to sue dentists, though medicare/medicaid fraud is beyond the scope of private lawsuits.

Boris Kutyurkokhov (Eisbaer), Thursday, 17 May 2012 22:54 (1 year ago) Permalink

if i had a kid, who came home from school one day with a bunch of dental work i didn't know anything about, somebody would be taking a bat to the head by the end of that day

goole, Thursday, 17 May 2012 22:56 (1 year ago) Permalink

that story gives me freaky marathon man vibes.

s.clover, Friday, 18 May 2012 00:34 (1 year ago) Permalink

Ok so I know this isn't EXACTLY within the thread, but since this has kind of become the smart-people-explain-finance-related-stuff thread, can anyone explain a bit about what a Greece Euro exit would mean?

this guy's a gangsta? his real name's mittens. (Hurting 2), Wednesday, 23 May 2012 14:22 (1 year ago) Permalink

This is one of the more provocative scenarios I've read for a Greek Euro exit:

http://brontecapital.blogspot.com/2011/09/models-for-greek-sovereign-default.html

o. nate, Wednesday, 23 May 2012 18:08 (1 year ago) Permalink

wait i popped in here because the ows thread was getting too ideological for my taste but did somebody seriously just advocate for nationalizing investment banks?!?

the late great, Wednesday, 23 May 2012 18:26 (1 year ago) Permalink

nobody really knows what a greece euro exit would mean or how it would happen at the moment, i suspect. The new 'geuro' proposal (http://www.cnbc.com/id/47505085) strikes me as not completely insane and unworkable as a medium term solution that would probably just be a step towards ultimate euro exit.

s.clover, Wednesday, 23 May 2012 20:26 (1 year ago) Permalink

can anyone explain a bit about what a Greece Euro exit would mean?

― this guy's a gangsta? his real name's mittens. (Hurting 2), Wednesday, May 23, 2012 10:22 AM (6 hours ago) Bookmark Flag Post Permalink

most likely the end of the euro and the world

lag∞n, Wednesday, 23 May 2012 20:29 (1 year ago) Permalink

pretty good BBC Radio4 Analysis from February about what contingency plans might be put in place and how things might shake down if there's a Euro exit: http://www.bbc.co.uk/programmes/b01bwm1h

Fas Ro Duh (Gukbe), Wednesday, 23 May 2012 21:54 (1 year ago) Permalink

I don't find Yglesias on finance very convincing, somehow.

this guy's a gangsta? his real name's mittens. (Hurting 2), Wednesday, 23 May 2012 22:09 (1 year ago) Permalink

What you're hearing lately from the Powers That Be about the survivability of Greece leaving the eurozone is all about liquidity contagion. They're saying that balance sheets are arranged such that the direct financial losses are survivable. But what about fear? It's harder to assess, but anyone who's sanguine about this is either bluffing optimistically or deluded. Ground zero for fear is going to be Cyprus. Most people probably don't even know that Cyprus is an independent country at all, and if they do know anything about it what they know is that it's some kind of ethnic Greek proxy state. So if Greece is gone, so is Cyprus, which is basically part of Greece. And if one island is gone, then what about Malta? So Malta's down. Now Cyprus and Malta matter even less than Greece. But once the policy rule isn't "Greece is different" but "Greece and Malta and Cyprus are all different" then who really knows. Does anyone even know anything about Portugal? Again, not really. Except it's close to Spain! And so now Spain's melting down. Not because of losses on Greek debt, but because the Greek exit and subsequent collapse of Cyprus have us new information about the limits of the German political class' level of commitment to the eurozone and now everyone's alarmed.

The only way to halt the pattern is to provide some very clear and very salient informational point separating the countries that are exiting from the countries that aren't exiting. And that's hard to do.

Like this. Not very convincing. Whose fear are we talking about? The American public? The German public? Institutional bond investors?

this guy's a gangsta? his real name's mittens. (Hurting 2), Wednesday, 23 May 2012 22:16 (1 year ago) Permalink

I mean there actually are, like, giant financial institutions who DO know something about Portugal besides it being next to Spain.

this guy's a gangsta? his real name's mittens. (Hurting 2), Wednesday, 23 May 2012 22:16 (1 year ago) Permalink

sure just like the giant financial institutions knew abt greece

lag∞n, Wednesday, 23 May 2012 22:27 (1 year ago) Permalink

but if you were to make list of people whos fear matters the most in this situation it would prob start with

1 people who have euros in greek/italian/portuguese/etc banks

lag∞n, Wednesday, 23 May 2012 22:29 (1 year ago) Permalink

then i guess

2 the people loaning money to those banks

lag∞n, Wednesday, 23 May 2012 22:30 (1 year ago) Permalink

actually I think it would be holders of sovereign debt of those countries

this guy's a gangsta? his real name's mittens. (Hurting 2), Wednesday, 23 May 2012 22:32 (1 year ago) Permalink

yes thats number 2

lag∞n, Wednesday, 23 May 2012 22:33 (1 year ago) Permalink

but people moving their euros from greek etc banks to german banks is necessary to get the ball rolling

lag∞n, Wednesday, 23 May 2012 22:34 (1 year ago) Permalink

holders of sovereign debt = people loaning money to the countries themselves

this guy's a gangsta? his real name's mittens. (Hurting 2), Wednesday, 23 May 2012 22:34 (1 year ago) Permalink

people = big institutions, mostly

this guy's a gangsta? his real name's mittens. (Hurting 2), Wednesday, 23 May 2012 22:35 (1 year ago) Permalink

corporation are people my friend

lag∞n, Wednesday, 23 May 2012 22:35 (1 year ago) Permalink

holders of sovereign debt = people loaning money to the countries themselves

― this guy's a gangsta? his real name's mittens. (Hurting 2), Wednesday, May 23, 2012 6:34 PM (1 minute ago) Bookmark Flag Post Permalink

lol rilly thx cool tip

lag∞n, Wednesday, 23 May 2012 22:36 (1 year ago) Permalink

another term for these people at this point would be 'germany'

lag∞n, Wednesday, 23 May 2012 22:38 (1 year ago) Permalink

well, to recap, you said:

but if you were to make list of people whos fear matters the most in this situation it would prob start with

1 people who have euros in greek/italian/portuguese/etc banks

― lag∞n, Wednesday, May 23, 2012 6:29 PM Bookmark Flag Post Permalink

then i guess

2 the people loaning money to those banks

― lag∞n, Wednesday, May 23, 2012 6:30 PM Bookmark Flag Post Permalink

And then I said "holders of sovereign debt"

And then you said "yes thats number 2"

And then I said "holders of sovereign debt = people loaning money to the countries themselves"

which is not the same thing at all as people loaning money to some greek banks that have euros in them, or whatever.

this guy's a gangsta? his real name's mittens. (Hurting 2), Wednesday, 23 May 2012 22:40 (1 year ago) Permalink

Also I don't think Germany is a major holder of Greek sovereign debt, it just doesn't want to help bail out Greece.

this guy's a gangsta? his real name's mittens. (Hurting 2), Wednesday, 23 May 2012 22:45 (1 year ago) Permalink

as we saw in the american finical crisis the line between government and banks can become p abstract, the same thing has been going on for a while in the eurozone, germany et al is pumping a bunch of money into the greek government/banks, the distinction is p academic at this point

lag∞n, Wednesday, 23 May 2012 22:48 (1 year ago) Permalink

germany may not want to help bail greece out but thats exactly what its doing, uncertainty as to whether they will keep doing it is whats causing the fear which is resulting in the charmingly named 'bank jog' of euros flowing out of at risk nations banks to more robust ones

lag∞n, Wednesday, 23 May 2012 22:50 (1 year ago) Permalink

god the euro is such a piece of shit

lag∞n, Wednesday, 23 May 2012 22:52 (1 year ago) Permalink

this is an aside but i think france has 3-4x as much exposure to greek debt as germany

the late great, Wednesday, 23 May 2012 22:52 (1 year ago) Permalink

exposure to grek debt isnt really the issue because greece isnt really a v big economy, the issue is if the eurozone lets greece default then people start to wonder if theyll let italy and spain default too, which are obvs much larger/dangerouser economies

lag∞n, Wednesday, 23 May 2012 22:55 (1 year ago) Permalink

I guess I thought, though, that Germany's concern is that it DOESN'T especially want to be a part of the saving of those countries, i.e. Germany's fear isn't "don't let them default" it's "don't force me to help rescue them."

this guy's a gangsta? his real name's mittens. (Hurting 2), Wednesday, 23 May 2012 23:00 (1 year ago) Permalink


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