The New GSE's - GS, MS, JPM, C

Discussion in 'Economics' started by MarketMasher, Jun 8, 2011.

  1. The truth is, the US economy is so weak, and the recovery so fragile, that any large bankruptcy will collapse this shaky house of cards. Fundamentally, the US is much, much weaker than we're led to believe.

  2. I agree with him. They gave the banks the power, now the banks have the ability to throw the 'bank failure' card around which would be severe.

    I think jamie dimon's little tout is misunderstood. He's looking out for himself and his company. The bankers are complaining about the new rules when theres a simple solution; break up all the big banks into much smaller operations, Ibanks should not be commercial banks anyway. Separate their trading operations, Ibanking, commercial/mortgages, and it will help out with competition from regional banks as well. By doing this they will be smaller therefore won't have the same strict cap requirements as they would now, so they'll be allowed to lend more (since that was a point dimon made even though banks aren't lending sh!t), and that removes too big to fail from the picture which would help out investor confidence.

    But I guess congress just isn't smart enough to realize what's right in front of them.
  3. jprad


    The Congress and the Senate know full well. They also know who funds their re-election campaigns.
  4. zdreg


    why do you think it has to a large bankruptcy? it could be a small bankruptcy or rise in interest rates could cause a collapse.
  5. Sure, a 200 basis point rise in rates could do it. I doubt a small bankruptcy. Although, a small terror attack would work. A big earthquake etc.
  6. Holy fuck. Look at the euro
  7. zdreg


    it is impossible to tell. a small bank failure in jittery times could start a run on banks. a tax increase could frighten people etc.
  8. he truth is, the US economy is so weak, and the recovery so fragile,

    Unemployment numbers above 400k again.
    ISM numbers are very weak in Eastern Part of the country.
  9. It's hard to predict market psychology when the Government is prepared to make every depositor whole at the expense of the taxpayer. The FED is more than capable of backdoor nationalization, even in the case of massive failures, to stave off a run, as we have seen. At that point, it becomes more a dollar problem, rather than a liquidity one. Which is how I think all this will play out.
    #10     Jun 9, 2011