Bank Transfer Day

[Vendetta]

https://www.commondreams.org/sites/commondreams.org/files/imagecache/headline_image/article_images/btd_full-flyer.gif

[boutons_deux]

git 'er done!

[Yonivore]

It won't be noticed.

By the way, I participated in "Bank Transfer Day" about 20 years ago.

Do I get a free Flea Bag Party bumper sticker?

[Blake]

https://www.commondreams.org/sites/commondreams.org/files/imagecache/headline_image/article_images/btd_full-flyer.gif

:rollin:rollin:rollin

[boutons_deux]

do the transfer by cashing out, not by wire transfer which only hands transfer fee to the criminal, bankrupt, gambling bank

[The_Worlds_finest]

http://i.imgur.com/Q35Dl.jpg

[Blake]

B of A is obviously scared of the 6500+ that will participate in this.

[boutons_deux]

yep, the banks know that customers are too lazy to move their accounts, so they continue to abuse their customers.

[The_Worlds_finest]

BD..humor me how does a bank abuse their customers??

[mavs>spurs]

BD..humor me how does a bank abuse their customers??

the fees ARE getting a bit out of hand..

[The_Worlds_finest]

i bank with the big bad boa and i get zero fees. Infact i get the keep the change return where they pay me money....also one time i had 3 over draft charges due to a missing link to my savings. I called they refunded the cost and apologized..

[mavs>spurs]

i bank with the big bad boa and i get zero fees. Infact i get the keep the change return where they pay me money....also one time i had 3 over draft charges due to a missing link to my savings. I called they refunded the cost and apologized..

it probably wasn't so much of an "accident," wells fargo has done the same thing to me a few times to the point it was getting ridiculous. of course whenever you catch it they are so sorry and have no idea how it happened!

once i had an overdraft fee because after i paid off the remaining balance of my car, they removed the balance from my CHECKING instead of my savings and wiped it out. i'm all happy i paid the thing off and i stop to get a shake from jack in the box on my way home and get charged an overdraft fee LOL

another time, i noticed that they randomly started charging me a monthly "maintenance fee" which had always previously been waived because i allowed them to remove 25 dollars a month from checking and put it into my savings account. i had been doing this for the entire 3 years i banked with wells fargo, well one day they randomly decided to stop doing this out of the blue as if i cancelled it. i don't think it's always "accidental" they just hope that they can sneak in some bullshit and that you won't check your statement like a hawk.

[ElNono]

By the way, I participated in "Bank Transfer Day" about 20 years ago.

You mean you were making poor decisions and blaming it on somebody else then?

[hater]

BD..humor me how does a bank abuse their customers??

let's see:
- banks cause the real estate crash that pushes citizens towards poverty
- US goverment sets up new regulations so this does not happen again
- banks counterback with new ridiculous fees to these same citizens to make up and make even more bread:

- $5 for each undeliverable bank statement
- 6% fees for using banks coin machines
- $9 per for talking to a human teller(ebanking customers)
- $5 for replace a lost debit card
- $1 /month to keep paper statements
- $3 per for old statements
- $15 per incoming wire transfer

don't you get it? these are nickel/dime fees. They can keep making more up till the end of time. I could even make up my own and would you blindly accept them?

not to mention BOA's bullshit of shutting down their website to stop ppl from closing their accounts.


yes. banks are NOT walking all over its customers :rolleyes

[Yonivore]

the fees ARE getting a bit out of hand..
Don't pay them. Hire another bank.

I don't pay them because, I put my money in a financial institution that doesn't let the fees get "a bit out of hand." And, if they do, I'll go elsewhere.

[Yonivore]

let's see:
- banks cause the real estate crash that pushes citizens towards poverty
Government caused the real estate crash. Dodd and his cozy affair with the Countrywide mortgage group. Barney Frank and his protection racket over Fannie Mae and Freddie Mac. Carter and Clinton along with ACORN, NAACP, and Obama (in his days as a community organizer) forcing banks to lend money to people who couldn't pay them back.



- US goverment sets up new regulations so this does not happen again
- banks counterback with new ridiculous fees to these same citizens to make up and make even more bread:
The government isn't very good at regulating.


- $5 for each undeliverable bank statement
- 6% fees for using banks coin machines
- $9 per for talking to a human teller(ebanking customers)
- $5 for replace a lost debit card
- $1 /month to keep paper statements
- $3 per for old statements
- $15 per incoming wire transfer
I don't pay any of these fees.


don't you get it? these are nickel/dime fees. They can keep making more up till the end of time. I could even make up my own and would you blindly accept them?
No. I'd take my business elsewhere, which is exactly what I did.


not to mention BOA's bullshit of shutting down their website to stop ppl from closing their accounts.
They probably have more branches than almost any bank in the country. Walk your ass into one of them and take your money out.


yes. banks are NOT walking all over its customers :rolleyes
Are you still a BOA customer?

Because, if you are, you're stupid.

[mavs>spurs]

Don't pay them. Hire another bank.

I don't pay them because, I put my money in a financial institution that doesn't let the fees get "a bit out of hand." And, if they do, I'll go elsewhere.

yeah i plan to go to a credit union if wells fargo actually implements any of this shit and tries to fuck me, so far they haven't, really didn't want to leave just yet because there is a wells fargo right by the house and it's convenient, anywhere else i'd have to travel a ways.

[hater]

Government caused the real estate crash.

the Bush goverment?

:lmao :lmao :lmao

[Yonivore]

the Bush goverment?

:lmao :lmao :lmao
Nope. The party of Barney Frank, Christopher Dodd, Maxine Waters, Bill Clinton, Barack Obama, Jimmy Carter...

President Bush spent much of his administration trying to reign in Fannie Mae and Freddie Mac.

[ChuckD]

.

[scott]

Your deposits are loans you make to banks so they can lend it back to you at a higher rate. If you aren't already with a Credit Union or Mutually Owned bank, then you're guilty of letting the banks rape you.

Every day should be bank transfer day. The big banks screw their customers, but you can't call it rape because they are willing.

[Wild Cobra]

let's see:
- banks cause the real estate crash that pushes citizens towards poverty

LOL... They didn't cause it. The consumers did, and it was a guarantee bubble to burst. If they are guilty of anything, it's not protecting their own asses better over it.

[mavs>spurs]

No, the banks were definitely at least at partial fault. They made loans to people they knew were likely to default, then misrepresented the amount of risk and packaged those mortgage loans together and sold them off as mortgage backed securities.

[Wild Cobra]

No, the banks were definitely at least at partial fault. They made loans to people they knew were likely to default, then misrepresented the amount of risk and packaged those mortgage loans together and sold them off as mortgage backed securities.
Yes, I know that's the skuttlebut...

Have proof?

They were required to make ways of making the loans possible. They didn't cause people to default.

[boutons_deux]

"the banks were definitely at least at partial fault."

The banks didn't write most of the sub-prime mortgages, the non-regulated, non-bank lenders did.

Yoni is repeating the Wall St lies, that's what he does.

Wall St MBSs, CDOs, and insanely high risk betting and betting on bets caused the crisis.

[The_Worlds_finest]

dont forget S&P rating subprime loans as AAA

[Yonivore]

Yes, I know that's the skuttlebut...

Have proof?

They were required to make ways of making the loans possible. They didn't cause people to default.
Not only did the '96 amendments to the Community Reinvestment Act require the lowering of lending standards, ACORN and the NAACP ran around pulling Jesse Jackson Rainbow Coalition extortion rackets on banks that deigned to deny loans, "make these loans and we won't tell everyone what a racist bank you are."

[boutons_deux]

Yoni's lying.

Nobody, esp not "community organizers", can force banks to do give their money away and take on bad borrowers.

Banks wrote (sub-prime) mortgages when it was to their advantage, not to hand out charity to red-line neighborhoods. It was mortgage flipping, to pocket fees and then sell mortages into the Wall St casino and/or FF as falsely rated AAA mortgages.

Again, most of the sub-prime mortgages to under qualified people were written by non-regulated non-banks. Regulated banks even created subsidiaries to be unregulated and get into the sub-prime game.

Yoni is a fucking liar, and he knows it. Fucking shilling for and protecting/defending the banks as "victims" of the govt and communistic community organzers?

G M A F F B

[cheguevara]

:lmao pulling the race card to defend the banks


the black ppl and their shitty credit caused it

:lmao

[Blake]

ACORN and the NAACP ran around pulling Jesse Jackson Rainbow Coalition extortion rackets on banks that deigned to deny loans, "make these loans and we won't tell everyone what a racist bank you are."

:lmao:lmao:lmao:rollin:rollin:lmao

[Yonivore]

:lmao:lmao:lmao:rollin:rollin:lmao



U.S. House of Representatives
Committee on Oversight and Government Reform
Darrell Issa (CA-49), Ranking Member (http://republicans.oversight.house.gov/images/stories/Reports/20100218followthemoneyacornseiuandtheirpoliticalal lies.pdf)

The last of six findings in the report:


The AHC used the Community Reinvestment Act provisions and coercive threats to force banks into lowering loan underwriting standards and entering into agreements that funneled profits to ACORN
Why were unqualified mortgage applicants directed to the subprime loans? Because conventional mortgage rules would not tolerate the ACORN invention known as "undocumented income."

Banks didn't trick anybody in to subprime mortgages. It was the only vehicle available to people who they were being extorted into loaning money.

[hater]

:lol Banks got bullied :lol

[Yonivore]

:lol Banks got bullied :lol
True that.

[MannyIsGod]

Yoni, you're just wrong. Its not about the loans because if the deregulation of the financial industry has proven anything is that those smart people on Wall St will create instruments that they can use to make money even if the risk to the economy at large is too hard.

I can completely ignore your incorrect assertion that sub prime loans were due to the government and STILL pin the blame squarely on the Wall St because:

-of the way MBS were sold.
-of the ratings these horrible securities and the companies that sold them received
-of the way firms like Goldman Sachs not only sold these securities, but bet on them failing by buying CDS on the very MBS they sold as AAA. As much as you guys foam at the mouth over Climategate emails taken out of context I would have thought you would have a field day with the emails from some of these firms.
-By the way these firms manipulated the bailout to ensure that the CDS were paid out IN FULL even though they knew what was going on the whole time.

Its not about the loans. Its about the way Wall St leveraged our entire economy on bad investments and bet on the investments failing that is the real issue here.

I don't concede your points on the loans because they're flat out wrong but I don't even think its what matters.

[MannyIsGod]

To make an analogy, its like a homeowner taking out fire insurance on a home, lighting it on fire, collecting the money from the insurance and then turning around and saying it was the home builders fault for not making the house out of non flammable material.

Oh yeah, and since you don't have to prove a vested interest in order to get a CDS - you could extend this to the homeowner burning down all of his neighbors houses as well in order to collect on insurance he took out on their homes.

But yes, it was the homebuilders fault. :lol

[Yonivore]

Yoni, you're just wrong. Its not about the loans because if the deregulation of the financial industry has proven anything is that those smart people on Wall St will create instruments that they can use to make money even if the risk to the economy at large is too hard.

I can completely ignore your incorrect assertion that sub prime loans were due to the government and STILL pin the blame squarely on the Wall St because:

-of the way MBS were sold.
-of the ratings these horrible securities and the companies that sold them received
-of the way firms like Goldman Sachs not only sold these securities, but bet on them failing by buying CDS on the very MBS they sold as AAA. As much as you guys foam at the mouth over Climategate emails taken out of context I would have thought you would have a field day with the emails from some of these firms.
-By the way these firms manipulated the bailout to ensure that the CDS were paid out IN FULL even though they knew what was going on the whole time.

Its not about the loans. Its about the way Wall St leveraged our entire economy on bad investments and bet on the investments failing that is the real issue here.

I don't concede your points on the loans because they're flat out wrong but I don't even think its what matters.
And, that's where Fannie Mae and Freddie Mac come in.

The activities in which they engaged in the early '00's are the real scandal. That's why Newt Gingrich suggested Barnie Franks should be in jail.

More on that later. Lunch!

[MannyIsGod]

Fannie and Freddie has absolutely nothing to do with every bullet point I outlined. Nothing. That was ALL Wall St.

[Blake]

U.S. House of Representatives
Committee on Oversight and Government Reform
Darrell Issa (CA-49), Ranking Member (http://republicans.oversight.house.gov/images/stories/Reports/20100218followthemoneyacornseiuandtheirpoliticalal lies.pdf)

The last of six findings in the report:


Why were unqualified mortgage applicants directed to the subprime loans? Because conventional mortgage rules would not tolerate the ACORN invention known as "undocumented income."

Banks didn't trick anybody in to subprime mortgages. It was the only vehicle available to people who they were being extorted into loaning money.


so who exactly from ACORN has gone to jail for such blatant criminal activities?

[boutons_deux]

"unqualified mortgage applicants directed to the subprime loans"

no lender WAS FORCED to sell the mortgage.

"the ACORN invention known as "undocumented income." "

You LIE. "stated income"/liar's loans were available in all the markets, certainly those that got hit bad, FL, CA, AZ, NV. Had NOTHING to do with ACORN or CRA. Same for 2nd and 3rd mortgages.

[Yonivore]

so who exactly from ACORN has gone to jail for such blatant criminal activities?
Yeah, right.

ACORN pulled the same racket on banks as Jesse Jackson did on major corporations. "Nice company you have there, be a shame if someone smeared it all over the country as being racist because your management is insufficiently diverse for our liking. Tell you what, promote a few brothahs and sistahs, and throw a bit of coin at my Rainbow Coalition, and we'll move on to some other racist company."

It wasn't any different except, ACORN had the Community Reinvestment Act with the threat of fines and penalties for not playing along. I believe Barack Obama was on a team of ACORN attorneys that filed a few suits against banks for not lending to people that were clearly unqualified. So, the banks capitulated or settled, lent money using the subprime mortgages (because traditional mortgages wouldn't tolerate the lax qualification standards that had to be developed for the borrowers), and even threw money at ACORN pet projects.

[boutons_deux]

Yoni's consolidating his total lack of credibility and seriousness with every post. That's a damn deep hole he's digging for himself.

banks "capitulated"??? :lol :lol :lol

[Yonivore]

To make an analogy, its like a homeowner taking out fire insurance on a home, lighting it on fire, collecting the money from the insurance and then turning around and saying it was the home builders fault for not making the house out of non flammable material.

Oh yeah, and since you don't have to prove a vested interest in order to get a CDS - you could extend this to the homeowner burning down all of his neighbors houses as well in order to collect on insurance he took out on their homes.

But yes, it was the homebuilders fault. :lol
Ah, found the article...

Blame Fannie Mae and Congress For the Credit Mess (http://online.wsj.com/article/SB122212948811465427.html)


By CHARLES W. CALOMIRIS and PETER J. WALLISON

Many monumental errors and misjudgments contributed to the acute financial turmoil in which we now find ourselves. Nevertheless, the vast accumulation of toxic mortgage debt that poisoned the global financial system was driven by the aggressive buying of subprime and Alt-A mortgages, and mortgage-backed securities, by Fannie Mae and Freddie Mac. The poor choices of these two government-sponsored enterprises (GSEs) -- and their sponsors in Washington -- are largely to blame for our current mess.

How did we get here? Let's review: In order to curry congressional support after their accounting scandals in 2003 and 2004, Fannie Mae and Freddie Mac committed to increased financing of "affordable housing." They became the largest buyers of subprime and Alt-A mortgages between 2004 and 2007, with total GSE exposure eventually exceeding $1 trillion. In doing so, they stimulated the growth of the subpar mortgage market and substantially magnified the costs of its collapse.

It is important to understand that, as GSEs, Fannie and Freddie were viewed in the capital markets as government-backed buyers (a belief that has now been reduced to fact). Thus they were able to borrow as much as they wanted for the purpose of buying mortgages and mortgage-backed securities. Their buying patterns and interests were followed closely in the markets. If Fannie and Freddie wanted subprime or Alt-A loans, the mortgage markets would produce them. By late 2004, Fannie and Freddie very much wanted subprime and Alt-A loans. Their accounting had just been revealed as fraudulent, and they were under pressure from Congress to demonstrate that they deserved their considerable privileges. Among other problems, economists at the Federal Reserve and Congressional Budget Office had begun to study them in detail, and found that -- despite their subsidized borrowing rates -- they did not significantly reduce mortgage interest rates. In the wake of Freddie's 2003 accounting scandal, Fed Chairman Alan Greenspan became a powerful opponent, and began to call for stricter regulation of the GSEs and limitations on the growth of their highly profitable, but risky, retained portfolios.

If they were not making mortgages cheaper and were creating risks for the taxpayers and the economy, what value were they providing? The answer was their affordable-housing mission. So it was that, beginning in 2004, their portfolios of subprime and Alt-A loans and securities began to grow. Subprime and Alt-A originations in the U.S. rose from less than 8% of all mortgages in 2003 to over 20% in 2006. During this period the quality of subprime loans also declined, going from fixed rate, long-term amortizing loans to loans with low down payments and low (but adjustable) initial rates, indicating that originators were scraping the bottom of the barrel to find product for buyers like the GSEs.

The strategy of presenting themselves to Congress as the champions of affordable housing appears to have worked. Fannie and Freddie retained the support of many in Congress, particularly Democrats, and they were allowed to continue unrestrained. Rep. Barney Frank (D., Mass), for example, now the chair of the House Financial Services Committee, openly described the "arrangement" with the GSEs at a committee hearing on GSE reform in 2003: "Fannie Mae and Freddie Mac have played a very useful role in helping to make housing more affordable . . . a mission that this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing." The hint to Fannie and Freddie was obvious: Concentrate on affordable housing and, despite your problems, your congressional support is secure.

In light of the collapse of Fannie and Freddie, both John McCain and Barack Obama now criticize the risk-tolerant regulatory regime that produced the current crisis. But Sen. McCain's criticisms are at least credible, since he has been pointing to systemic risks in the mortgage market and trying to do something about them for years. In contrast, Sen. Obama's conversion as a financial reformer marks a reversal from his actions in previous years, when he did nothing to disturb the status quo. The first head of Mr. Obama's vice-presidential search committee, Jim Johnson, a former chairman of Fannie Mae, was the one who announced Fannie's original affordable-housing program in 1991 -- just as Congress was taking up the first GSE regulatory legislation.

In 2005, the Senate Banking Committee, then under Republican control, adopted a strong reform bill, introduced by Republican Sens. Elizabeth Dole, John Sununu and Chuck Hagel, and supported by then chairman Richard Shelby. The bill prohibited the GSEs from holding portfolios, and gave their regulator prudential authority (such as setting capital requirements) roughly equivalent to a bank regulator. In light of the current financial crisis, this bill was probably the most important piece of financial regulation before Congress in 2005 and 2006. All the Republicans on the Committee supported the bill, and all the Democrats voted against it. Mr. McCain endorsed the legislation in a speech on the Senate floor. Mr. Obama, like all other Democrats, remained silent.

Now the Democrats are blaming the financial crisis on "deregulation." This is a canard. There has indeed been deregulation in our economy -- in long-distance telephone rates, airline fares, securities brokerage and trucking, to name just a few -- and this has produced much innovation and lower consumer prices. But the primary "deregulation" in the financial world in the last 30 years permitted banks to diversify their risks geographically and across different products, which is one of the things that has kept banks relatively stable in this storm.

As a result, U.S. commercial banks have been able to attract more than $100 billion of new capital in the past year to replace most of their subprime-related write-downs. Deregulation of branching restrictions and limitations on bank product offerings also made possible bank acquisition of Bear Stearns and Merrill Lynch, saving billions in likely resolution costs for taxpayers.

If the Democrats had let the 2005 legislation come to a vote, the huge growth in the subprime and Alt-A loan portfolios of Fannie and Freddie could not have occurred, and the scale of the financial meltdown would have been substantially less. The same politicians who today decry the lack of intervention to stop excess risk taking in 2005-2006 were the ones who blocked the only legislative effort that could have stopped it.

Mr. Calomiris is a professor of finance and economics at Columbia Business School and a scholar at the American Enterprise Institute. Mr. Wallison, a senior fellow at the American Enterprise Institute, was general counsel of the Treasury Department in the Reagan administration.
Once again, it can be boiled down to one root cause. Government.

[MannyIsGod]

Its amazing that you think that article addresses anything I brought it up.

[Yonivore]

Its amazing that you think that article addresses anything I brought it up.
It addresses the origins of the 2008 financial meltdown. Who cares what you bring up...it's pretty much drivel, anyway.

[MannyIsGod]

If the Democrats had let the 2005 legislation come to a vote, the huge growth in the subprime and Alt-A loan portfolios of Fannie and Freddie could not have occurred, and the scale of the financial meltdown would have been substantially less. The same politicians who today decry the lack of intervention to stop excess risk taking in 2005-2006 were the ones who blocked the only legislative effort that could have stopped it.

This is just patently false. Wall St has concocted all sorts of investment vehicles for all manner of securities. Thinking that it had to be tied to homes is foolish as hell and ignores so much.

[Blake]

Yeah, right.

ACORN pulled the same racket on banks as Jesse Jackson did on major corporations. "Nice company you have there, be a shame if someone smeared it all over the country as being racist because your management is insufficiently diverse for our liking. Tell you what, promote a few brothahs and sistahs, and throw a bit of coin at my Rainbow Coalition, and we'll move on to some other racist company."


:lmao:lmao:lmao

[Blake]

Who cares what you bring up...it's pretty much drivel, anyway.

:lmao:lmao:lmao:lmao:lmao

[MannyIsGod]

It addresses the origins of the 2008 financial meltdown. Who cares what you bring up...it's pretty much drivel, anyway.

I brought up extremely valid points. Anyone who was actually interested in understanding the causes of the financial crisis would have already come across all of them and made an effort to understand their roles as opposed to regurgitating some tired simplicity of "government and democrats are bad". Its sad to see the state of intellectual honesty and curiosity you display.

Furthermore, you're a weak man, Yoni. You challenge yourself to be a better poster and then fail to live up to it time and time again. I would be ashamed to have your lack of a spine and will power.

Carry on.

[boutons_deux]

"Mr. Calomiris is a professor of finance and economics at Columbia Business School and a scholar at the American Enterprise Institute. Mr. Wallison, a senior fellow at the American Enterprise Institute, was general counsel of the Treasury Department in the Reagan administration."

AEI is about as fair-and-balanced as Fox Repug Network. Just another UCA-financed stink tank pumping out pro-UCA/anti-govt propaganda.

[MannyIsGod]

Well, Economics academia is quite a corrupt pile of crap in general (due respect, Scott). These guys take money to publish "studies" that say shit that isn't close to reality.

[Yonivore]

I brought up extremely valid points. Anyone who was actually interested in understanding the causes of the financial crisis would have already come across all of them and made an effort to understand their roles as opposed to regurgitating some tired simplicity of "government and democrats are bad". Its sad to see the state of intellectual honesty and curiosity you display.

Furthermore, you're a weak man, Yoni. You challenge yourself to be a better poster and then fail to live up to it time and time again. I would be ashamed to have your lack of a spine and will power.

Carry on.
Wall Street became "creative" because they were looking for ways to reduce their risk. They relied on Fannie Mae's and Freddie Mac's huge position in sub-prime mortgages as indicating more security than actually existed. The MBS and CDS's were developed with the understanding that Goverment back loans were pretty safe. After all, Government back mortgages used to be a pretty good risk. Yes, it was a mistake but, it wasn't criminal. What was criminal is how Fannie Mae and Freddie Mac were allowed to hide the fiasco that was the subprime market, pump them up as good credit risks and then feign disbelief when the house of cards fell.

And boo-fucking-hoo that you can't stop yourself from responding to my posts and thinking I give a fuck about your idiotic characterizations of a person you've only known through this medium. It's no wonder you hold the view you do, you're obviously only informed by what you can find on the internet.

[Yonivore]

And, whoever said subprime mortgages weren't the biggest problem fails to realize that by 2008, Fannie Mae and Freddie Mac, alone, were holding over $1 Trillion in such debt. Throw in the rest, and it's a big fucking deal.

[boutons_deux]

"Fannie Mae and Freddie Mac, alone, were holding over $1 Trillion in such debt"

They didn't write the mortgages, they bought them in good faith from the retail lenders that wrote them and then committed fraud by selling them as solid mortgages. F&F tried, perhaps is still trying to have the lenders buy them back.

[MannyIsGod]

Wall Street became "creative" because they were looking for ways to reduce their risk. They relied on Fannie Mae's and Freddie Mac's huge position in sub-prime mortgages as indicating more security than actually existed. The MBS and CDS's were developed with the understanding that Goverment back loans were pretty safe. After all, Government back mortgages used to be a pretty good risk. Yes, it was a mistake but, it wasn't criminal. What was criminal is how Fannie Mae and Freddie Mac were allowed to hide the fiasco that was the subprime market, pump them up as good credit risks and then feign disbelief when the house of cards fell.


Where did you learn this? Its unbelievably wrong. MBS and CDS




And boo-fucking-hoo that you can't stop yourself from responding to my posts and thinking I give a fuck about your idiotic characterizations of a person you've only known through this medium. It's no wonder you hold the view you do, you're obviously only informed by what you can find on the internet.

You're a funny guy, Yoni. You pretty much value this forum when it suits the argument you want to make and otherwise you try to act like you don't. In the climate thread you lamented how we weren't using this medium well because I wouldn't hold your hand to the answer that was right there and in other threads you try to act like the medium is worthless and you're sooooooooooooo above it.

As for not being able to stop myself from responding, thats fairly laughable. I don't read the majority of your posts and I'm not sure why you think that mean responding to you a few times somehow represents an inability to tune you out other than your very odd sense sense of self importance. You might have a case when I respond to more than a small fraction of your posts or even bother to read the majority of your ellipse ridden threads.

Its pretty funny that you try to smack down "the view" I hold by acting as though you're more informed on the subject than I am. Its very clear by your absolute ignorance on the subject of MBS and CDS this is not the case.

In any event, Yoni, I want you to remember that I never set some arbitrary bar for you to meet with your posting. YOU did that. You decided your posting sucked (one of the more rational decisions you've ever made) and then you subsequently failed to reach the bar you tried to raise for yourself. You failed, Yoni. You failed, yourself. That is what makes you weak.

[MannyIsGod]

Oh my - 1 trillion in sub prime debt.

That really fucking compares to the 63 trillion of outstanding CDS debt, doesn't it Yoni?

[xrayzebra]

yep, the banks know that customers are too lazy to move their accounts, so they continue to abuse their customers.

Banks have always charged fees for keeping your money. In years past
10 cents a check, you paid when they were printed. Then they had
fees for two bucks a month to maintain an account even if you didn't
write a check.

It is only in recent years that these no fee, no charge for checks, accounts
have come about. And you cant still get them if you maintain a certain
balance in your account or savings account. Otherwise you can do like
most people used to do. Live out of their hip pocket and go around every
pay day and make a payment on your bills.

[Drachen]

It addresses the origins of the 2008 financial meltdown. Who cares what you bring up...it's pretty much drivel, anyway.

I have to ask do you know that the CDS market on MBS was far FAR FAR larger than the actual face value of all of the MBS's.

Edit: oops! this was already covered.


Also, if banks believed that these were so safe (being that they were government backed), why did they buy CDS's on them???


Lastly MBS and CDS were developed in the late late 70's to mid 80s

[MannyIsGod]

Of course they were worth more. When I have AA in the hole, I bet the fucking house. Well, if I could bet against myself losing when I had shit cards I'd make WAY more money. Its a surefire bet when you're allowed to write the securities that are going to fail.

[ElNono]

It addresses the origins of the 2008 financial meltdown. Who cares what you bring up...it's pretty much drivel, anyway.

Pot kettle, look in mirror, et all

[ElNono]

Wall Street became "creative" because they were looking for ways to reduce their risk.

:lmao:lmao:lmao:lmao:lmao:lmao:lmao

[boutons_deux]

Wall st made very risky bets because the higher the risk, the higher the payoff.

then Wall St made bets on the bets, etc, etc. The total casino was estimated to reach over $50T.

Yoni defending the Wall St criminals as a funny as Yoni defending dubya's war-for-oil

[4>0rings]

B of A is obviously scared of the 6500+ that will participate in this.
Oh, they're scared. I cashed out my accounts the other day and the manager asked me what bank I was going to. We talked a little and he said a lot of people are leaving BofA every day. He had the 'damn, not another one' when I was cashing out look/attitude also. :lol

[4>0rings]

. Otherwise you can do like
most people used to do. Live out of their hip pocket and go around every
pay day and make a payment on your bills.Or just support a bank that doesn't charge you to use your money like many other banks do not do.

[belindaB]

Critics of Occupy Wall Street stated the protest lacked focus, and Occupy Wall Street has replied, reports The Street. The motion has spawned “Bank Transfer Day,” where customers can put action at the rear of their words against the banking institution by moving their money. Occupy Wall Street introduces Bank Transfer Day (http://personalmoneynetwork.com/moneyblog/2011/10/12/bank-transfer-day-nov-5/). Even if specific action on Nov 5th is symbolically important, one should still have have a plan well in advance. It is often a good idea to overlap the old and new accounts for a few days, to allow everything to clear out of the old while you begin using the new. This is especially true if there are automatic things which post to the old account — many of those may not hit on exactly the same, predictable calendar day each month, plus the initiator may need some time to set up for the new account.

[belindaB]

Not all banks are evil; not all credit unions are blameless. It would seem that the better path to take would be to remove money from the large, culpable institutions. Even if specific action on Nov 5th is symbolically important, one should still have have a plan well in advance. It is often a good idea to overlap the old and new accounts for a few days, to allow everything to clear out of the old while you begin using the new. This is especially true if there are automatic things which post to the old account — many of those may not hit on exactly the same, predictable calendar day each month, plus the initiator may need some time to set up for the new account.

[Blake]

Oh, they're scared. I cashed out my accounts the other day and the manager asked me what bank I was going to. We talked a little and he said a lot of people are leaving BofA every day. He had the 'damn, not another one' when I was cashing out look/attitude also. :lol

BofA has other massive concerns to worry about aside from a few thousand people closing their bank accounts on a Saturday.

Their stock shares have been in a virtual freefall since January.

[boutons_deux]

Krugman, right on target once again, trashes the Alice-in-Wonderland rabbit-hole economics of Repugs.

Rabbit-Hole Economics

By PAUL KRUGMAN

Reading the transcript of Tuesday’s Republican debate on the economy is, for anyone who has actually been following economic events these past few years, like falling down a rabbit hole. Suddenly, you find yourself in a fantasy world where nothing looks or behaves the way it does in real life.

And since economic policy has to deal with the world we live in, not the fantasy world of the G.O.P.’s imagination, the prospect that one of these people may well be our next president is, frankly, terrifying.

In the real world, recent events were a devastating refutation of the free-market orthodoxy that has ruled American politics these past three decades. Above all, the long crusade against financial regulation, the successful effort to unravel the prudential rules established after the Great Depression on the grounds that they were unnecessary, ended up demonstrating — at immense cost to the nation — that those rules were necessary, after all.

But down the rabbit hole, none of that happened. We didn’t find ourselves in a crisis because of runaway private lenders like Countrywide Financial. We didn’t find ourselves in a crisis because Wall Street pretended that slicing, dicing and rearranging bad loans could somehow create AAA assets — and private rating agencies played along. We didn’t find ourselves in a crisis because “shadow banks” like Lehman Brothers exploited gaps in financial regulation to create bank-type threats to the financial system without being subject to bank-type limits on risk-taking.

No, in the universe of the Republican Party we found ourselves in a crisis because Representative Barney Frank forced helpless bankers to lend money to the undeserving poor.

O.K., I’m exaggerating a bit — but not much. Mr. Frank’s name did come up repeatedly as a villain in the crisis, and not just in the context of the Dodd-Frank financial reform bill, which Republicans want to repeal. You have to marvel at his alleged influence given the fact that he’s a Democrat and the vast bulk of the bad loans now afflicting our economy were made while George W. Bush was president and Republicans controlled the House with an iron grip. But he’s their preferred villain all the same.

The demonization of Mr. Frank aside, it’s now obviously orthodoxy on the Republican side that government caused the whole problem. So what you need to know is that this orthodoxy has hardened even as the supposed evidence for government as a major villain in the crisis has been discredited. The fact is that government rules didn’t force banks to make bad loans, and that government-sponsored lenders, while they behaved badly in many ways, accounted for few of the truly high-risk loans that fueled the housing bubble.

But that’s history. What do the Republicans want to do now? In particular, what do they want to do about unemployment?

Well, they want to fire Ben Bernanke, the chairman of the Federal Reserve — not for doing too little, which is a case one can make, but for doing too much. So they’re obviously not proposing any job-creation action via monetary policy.

Incidentally, during Tuesday’s debate, Mitt Romney named Harvard’s N. Gregory Mankiw as one of his advisers. How many Republicans know that Mr. Mankiw at least used to advocate — correctly, in my view — deliberate inflation by the Fed to solve our economic woes?

So, no monetary relief. What else? Well, the Cheshire Cat-like Rick Perry — he seems to be fading out, bit by bit, until only the hair remains — claimed, implausibly, that he could create 1.2 million jobs in the energy sector. Mr. Romney, meanwhile, called for permanent tax cuts — basically, let’s replay the Bush years! And Herman Cain? Oh, never mind.

By the way, has anyone else noticed the disappearance of budget deficits as a major concern for Republicans once they start talking about tax cuts for corporations and the wealthy?

It’s all pretty funny. But it’s also, as I said, terrifying.

The Great Recession should have been a huge wake-up call. Nothing like this was supposed to be possible in the modern world. Everyone, and I mean everyone, should be engaged in serious soul-searching, asking how much of what he or she thought was true actually isn’t.

But the G.O.P. has responded to the crisis not by rethinking its dogma but by adopting an even cruder version of that dogma, becoming a caricature of itself. During the debate, the hosts played a clip of Ronald Reagan calling for increased revenue; today, no politician hoping to get anywhere in Reagan’s party would dare say such a thing.

It’s a terrible thing when an individual loses his or her grip on reality. But it’s much worse when the same thing happens to a whole political party, one that already has the power to block anything the president proposes — and which may soon control the whole government.

http://www.nytimes.com/2011/10/14/opinion/rabbit-hole-economics.html?_r=1&hp=&pagewanted=print

[boutons_deux]

The Banks Falter

As the first of the major banks to report its earnings each quarter, JPMorgan Chase is a barometer of conditions in the financial industry. The mercury is falling.

JPMorgan reported on Thursday that its third-quarter revenue had dropped by 11 percent from the second quarter; its profit fell by 4 percent from a year earlier. And since JPMorgan is arguably one of the nation’s healthier banks, results for firms like Bank of America, Citigroup, Goldman Sachs and Morgan Stanley are likely to be considerably worse.

These declines are worrisome in the sense that they reflect the weakness of the broader economy. Joblessness, damaged credit and falling home values have left people unable to borrow or to repay debt and businesses reluctant to hire and invest. But the results also reflect how the banks built profits abusing their customers.

Long overdue federal restrictions on hidden overdraft charges and excessive debit card fees have begun to take a bite out of bank profits, and that should be happening. But the banks and their investors tend to see any rules and regulations that slow revenue growth as undue and overly burdensome, and they are pushing back. The question is whether lawmakers and regulators will stand up for the new fee restrictions and other rules as banks resist.

Banks, habituated to gouging their customers, are already trying to recoup lost revenue with dubious new charges, like Bank of America’s $5 monthly fee for using a debit card. The move has infuriated customers and led President Obama to rightly warn against mistreatment of customers in the pursuit of profit. But Bank of America has yet to relent — a stubbornness that may be from of a belief that aggrieved customers won’t do better elsewhere. On Thursday, five Democratic congressmen led by Peter Welch of Vermont asked the Justice Department to investigate whether the big banks were engaging in “price signaling,” a form of collusion in the setting of prices.

The big banks are also resisting proposed regulations on capital levels, derivatives and investing practices. If successfully implemented, the new rules will help to curb the kind of reckless trading and irresponsible lending that caused the crash and recession. That will slow revenue growth, but it is the price of a more stable system.

The banks also have gotten themselves into a legal mess for which they have no one to blame but themselves. JPMorgan had to set aside another $1 billion last quarter to prepare for legal claims from investors who want to recoup their loss from mortgage bonds backed by bad loans.

The banks face legal challenges from federal and state governments over foreclosure abuses and other mortgage-related issues. In all, analysts say mortgage problems could cost JPMorgan up to $9 billion. Bank of America, the most exposed of the big banks to mortgage-related litigation, is potentially on the hook for far more.

Investors, meanwhile, are pricing banks’ stocks below the banks’ book value — a sign that they don’t believe the banks are worth what the banks say they are. The questions generally involve whether banks are properly valuing their loans and investments and the extent of their exposure to shaky European debt. Banks could fix this with increased and detailed disclosure. Government officials and regulators could compel that disclosure. The general failure on this front feeds the air of skepticism.

One of the lessons from the financial crash is that there is no substitute for transparency. In the new earnings season, investors are still in the dark.

http://www.nytimes.com/2011/10/14/opinion/the-big-banks-falter.html?hp=&pagewanted=print

=======

btw, banks (eg, the VISA cartel) make about 75% margin on ATM/CC payment transactions. I'd love to be in any business that makes 75% by turning on a computer network. What other $T activity makes 75% on a low-tech commodity like electronic payments? Why 75%? They screw you because they can. And scream bloody murder if the govt tries reduce (not elimnate) the screwing, and go screw you someplace else.

Without income from automated electronic money shifting, $38B/year from bank overdrafts, and Shylockingly usurious CC rates, all the big banks would be bankrupt (and much smaller).

[MannyIsGod]

Pretty funny how Yonivore tucked tail and ran from this shit show.

[boutons_deux]

Online Banking Keeps Customers on Hook for Fees

Customers frustrated by banks’ controversial new fees are finding out what industry insiders have known for years: it is not so easy to disentangle your life from your bank.

The Internet banking services that have been sold to customers as conveniences, like online bill paying, serve as powerful tethers that keep them from jumping to another institution.

Tedd Speck, a 49-year-old market researcher in Kent, Conn., was furious about Bank of America’s planned $5 monthly fee for debit card use.

But he is staying put after being overwhelmed by the inconvenience of moving dozens of online bill paying arrangements to another bank.

“I’m really annoyed,” he said, “but someone at Bank of America made that calculation and they made it right.”

Former bankers and market researchers say that it’s no accident. The steady expansion of online bill paying, they say, has emboldened Bank of America, as well as rivals like Wells Fargo, JPMorgan Chase and SunTrust, to turn to new fees on customer accounts as other sources of revenue dry up. The fees have caused an uproar among consumers and drawn sharp criticism from politicians, including President Obama.

“The technology locks you in and they’re keenly aware of it,” said Robert Smith, who was chief executive of Security Pacific when it was bought by Bank of America in 1992. “It’s very hard for consumers to just ditch that.”

For years, banks have openly sought to attach as many loans and services as they can to a customer, like credit cards, mortgages and mobile phone banking.

What they haven’t mentioned are marketing studies like the one commissioned by Fiserv, which develops online bill paying systems, showing that using the Internet to pay bills, do automatic deductions and send electronic checks reduced customer turnover for banks by up to 95 percent in some cases.

With 44 million households having used the Internet to pay a bill in the past 30 days — up from 32 million five years ago and projected to reach 55 million by 2016 — it’s a shift that has major ramifications for competition.

There’s even evidence that fewer consumers are switching banks, with 7 percent of them estimated to be moving their primary account to a different institution in 2011, down from 12 percent last year, according to surveys by Javelin Strategy and Research.

Emmett Higdon, a consultant who managed Citibank’s online bill payment product from 2004 to 2007, said that “for the consumer, it’s a double-edged sword.” While customers value the convenience, inside the industry “it was known that it would be a powerful retention tool. That’s why online bill paying went free in the first place. Inertia is powerful in the banking industry.”

Bank of America today has 29 million account holders banking online and 15 million using the service to pay bills, but company officials say there is no connection between the stickiness of Internet bill paying and the decision to impose the $5 monthly debit card fee.

“People like online bill pay, it’s convenient and safe,” said Anne Pace, a spokeswoman for the company. “The lower attrition rate that came along with it was simply a result of offering a valuable service.”

The fee, she said, “allows us to continue offering the benefits that customers have come to expect from our debit card,” like fraud protection, overdraft prevention and a wide-reaching A.T.M. network.

Asked if the bank calculated how many online-bill-pay customers a new fee could drive away, Ms. Pace said, “We did extensive research on how they would react to a new fee and whether it was fair.”

The new fee will not apply to customers with a Bank of America mortgage or those who have an account balance of $20,000 or more.

Members of Congress have taken notice of the fee uproar — and the ties that bind customers to their banks.

“The difficulty of moving accounts is deliberate and unnecessary,” said Representative Brad Miller, who introduced a bill this month that would make it easier for customers to switch.

“If you decide another bank is better, you should be able to change, just like you’d take your business from Wal-Mart to Target,” said Mr. Miller, a Democrat from North Carolina who is a member of the House Financial Services Committee.

Mr. Miller’s bill reflects a rising anger centered on Bank of America’s proposed debit card fee, which the bank plans to impose in 2012, and similar charges under consideration by other financial institutions.

On Thursday, Democratic lawmakers asked the Justice Department to investigate whether the banks had colluded in setting the fees.

The Occupy Wall Street protesters in Lower Manhattan have also jumped on the debit card fee as one more example of corporate greed. And activists are calling on account holders to switch to nonprofit credit unions en masse on Nov. 5, which they have named Bank Transfer Day; a Facebook page devoted to the effort has drawn more than 38,000 supporters.

As a result, the question of whether consumers will indeed vote with their feet is being closely watched by the banking industry, consumer advocates and legislators. The banks don’t release detailed data on customer defections.

“There’s a certain amount of pain you can inflict on customers without losing them and the banks are all doing careful calculations about what customers are willing to pay for,” said Mark Schwanhausser, a senior analyst with Javelin. Just as airline passengers swallowed fees to check bags, he predicts, many consumers will stay put.

To be sure, holding on to customers is the goal of every business. The distinction in this case, critics say, is that a product that was marketed to customers as a convenience is now being used against them. “If they were only offering a service, that’s one thing,” said Ed Mierzwinski, consumer program director of U.S. Pirg, a nonprofit consumer advocacy group. But banks, he said, consciously make it harder to switch “in order to make their customers sticky.”

Customer satisfaction, rather than the annoyance factor, is what makes consumers reluctant to switch, according to the banks and the companies that develop Internet banking technology.

“I disagree with the notion that the consumer is a victim in all of this,” said Eric Leiserson, senior research analyst with Fiserv, which counts Bank of America among its customers. “These services were developed to bring convenience to consumers. It’s a win for all.”

Studies commissioned by Fiserv using data from SunTrust and Wachovia in 2007 and 2008 emphasize how online banking and e-bills reduce customer turnover while substantially raising profits per customer.

“For many consumer banks, actively lowering customer attrition rates is one of the most important strategic imperatives for the bank as a whole,” one survey concluded.

But while keeping customers happy is critical, just as important is keeping them captive.

“The name of the game is to find the levers that increase customer loyalty and retention at a reasonable cost,” said Kirk Gripenstraw, an expert on customer analytics who worked on the Fiserv studies.

The 2008 study showed that customers who made five or more payments online a month were 95 percent less likely “to churn,” while consumers who didn’t bank online were 43 percent more likely to leave.

Like Mr. Speck, Adam Zaharchuk of Gilbert, Ariz., is upset about the fee, but he also concedes he’s too tied in to leave Bank of America. “They’re nickeling and diming the little guys out there,” he said. “But it’s very convenient.”

http://www.nytimes.com/2011/10/16/business/online-banking-keeps-customers-on-hook-for-fees.html?_r=1&pagewanted=print

[Drachen]

Online Banking Keeps Customers on Hook for Fees

Customers frustrated by banks’ controversial new fees are finding out what industry insiders have known for years: it is not so easy to disentangle your life from your bank.

The Internet banking services that have been sold to customers as conveniences, like online bill paying, serve as powerful tethers that keep them from jumping to another institution.

Tedd Speck, a 49-year-old market researcher in Kent, Conn., was furious about Bank of America’s planned $5 monthly fee for debit card use.

But he is staying put after being overwhelmed by the inconvenience of moving dozens of online bill paying arrangements to another bank.

“I’m really annoyed,” he said, “but someone at Bank of America made that calculation and they made it right.”

Former bankers and market researchers say that it’s no accident. The steady expansion of online bill paying, they say, has emboldened Bank of America, as well as rivals like Wells Fargo, JPMorgan Chase and SunTrust, to turn to new fees on customer accounts as other sources of revenue dry up. The fees have caused an uproar among consumers and drawn sharp criticism from politicians, including President Obama.

“The technology locks you in and they’re keenly aware of it,” said Robert Smith, who was chief executive of Security Pacific when it was bought by Bank of America in 1992. “It’s very hard for consumers to just ditch that.”

For years, banks have openly sought to attach as many loans and services as they can to a customer, like credit cards, mortgages and mobile phone banking.

What they haven’t mentioned are marketing studies like the one commissioned by Fiserv, which develops online bill paying systems, showing that using the Internet to pay bills, do automatic deductions and send electronic checks reduced customer turnover for banks by up to 95 percent in some cases.

With 44 million households having used the Internet to pay a bill in the past 30 days — up from 32 million five years ago and projected to reach 55 million by 2016 — it’s a shift that has major ramifications for competition.

There’s even evidence that fewer consumers are switching banks, with 7 percent of them estimated to be moving their primary account to a different institution in 2011, down from 12 percent last year, according to surveys by Javelin Strategy and Research.

Emmett Higdon, a consultant who managed Citibank’s online bill payment product from 2004 to 2007, said that “for the consumer, it’s a double-edged sword.” While customers value the convenience, inside the industry “it was known that it would be a powerful retention tool. That’s why online bill paying went free in the first place. Inertia is powerful in the banking industry.”

Bank of America today has 29 million account holders banking online and 15 million using the service to pay bills, but company officials say there is no connection between the stickiness of Internet bill paying and the decision to impose the $5 monthly debit card fee.

“People like online bill pay, it’s convenient and safe,” said Anne Pace, a spokeswoman for the company. “The lower attrition rate that came along with it was simply a result of offering a valuable service.”

The fee, she said, “allows us to continue offering the benefits that customers have come to expect from our debit card,” like fraud protection, overdraft prevention and a wide-reaching A.T.M. network.

Asked if the bank calculated how many online-bill-pay customers a new fee could drive away, Ms. Pace said, “We did extensive research on how they would react to a new fee and whether it was fair.”

The new fee will not apply to customers with a Bank of America mortgage or those who have an account balance of $20,000 or more.

Members of Congress have taken notice of the fee uproar — and the ties that bind customers to their banks.

“The difficulty of moving accounts is deliberate and unnecessary,” said Representative Brad Miller, who introduced a bill this month that would make it easier for customers to switch.

“If you decide another bank is better, you should be able to change, just like you’d take your business from Wal-Mart to Target,” said Mr. Miller, a Democrat from North Carolina who is a member of the House Financial Services Committee.

Mr. Miller’s bill reflects a rising anger centered on Bank of America’s proposed debit card fee, which the bank plans to impose in 2012, and similar charges under consideration by other financial institutions.

On Thursday, Democratic lawmakers asked the Justice Department to investigate whether the banks had colluded in setting the fees.

The Occupy Wall Street protesters in Lower Manhattan have also jumped on the debit card fee as one more example of corporate greed. And activists are calling on account holders to switch to nonprofit credit unions en masse on Nov. 5, which they have named Bank Transfer Day; a Facebook page devoted to the effort has drawn more than 38,000 supporters.

As a result, the question of whether consumers will indeed vote with their feet is being closely watched by the banking industry, consumer advocates and legislators. The banks don’t release detailed data on customer defections.

“There’s a certain amount of pain you can inflict on customers without losing them and the banks are all doing careful calculations about what customers are willing to pay for,” said Mark Schwanhausser, a senior analyst with Javelin. Just as airline passengers swallowed fees to check bags, he predicts, many consumers will stay put.

To be sure, holding on to customers is the goal of every business. The distinction in this case, critics say, is that a product that was marketed to customers as a convenience is now being used against them. “If they were only offering a service, that’s one thing,” said Ed Mierzwinski, consumer program director of U.S. Pirg, a nonprofit consumer advocacy group. But banks, he said, consciously make it harder to switch “in order to make their customers sticky.”

Customer satisfaction, rather than the annoyance factor, is what makes consumers reluctant to switch, according to the banks and the companies that develop Internet banking technology.

“I disagree with the notion that the consumer is a victim in all of this,” said Eric Leiserson, senior research analyst with Fiserv, which counts Bank of America among its customers. “These services were developed to bring convenience to consumers. It’s a win for all.”

Studies commissioned by Fiserv using data from SunTrust and Wachovia in 2007 and 2008 emphasize how online banking and e-bills reduce customer turnover while substantially raising profits per customer.

“For many consumer banks, actively lowering customer attrition rates is one of the most important strategic imperatives for the bank as a whole,” one survey concluded.

But while keeping customers happy is critical, just as important is keeping them captive.

“The name of the game is to find the levers that increase customer loyalty and retention at a reasonable cost,” said Kirk Gripenstraw, an expert on customer analytics who worked on the Fiserv studies.

The 2008 study showed that customers who made five or more payments online a month were 95 percent less likely “to churn,” while consumers who didn’t bank online were 43 percent more likely to leave.

Like Mr. Speck, Adam Zaharchuk of Gilbert, Ariz., is upset about the fee, but he also concedes he’s too tied in to leave Bank of America. “They’re nickeling and diming the little guys out there,” he said. “But it’s very convenient.”

http://www.nytimes.com/2011/10/16/business/online-banking-keeps-customers-on-hook-for-fees.html?_r=1&pagewanted=print

So B_D, the only thing that this article proved to me is that people are whiny lazy bitches. They absolutely deserve to be charged $5 a month (or more) as a lazy moron tax.

[Yonivore]

Pretty funny how Yonivore tucked tail and ran from this shit show.
It's hard to stay serious when someone conflates the national debt with the amount of toxic debt.

$63 Trillion. :lmao

[MannyIsGod]

It's hard to stay serious when someone conflates the national debt with the amount of toxic debt.

$63 Trillion. :lmao

You obviously have no idea how big the derivatives market was at the height of the financial crisis. I find your smugness quite funny in this case because of how wrong you are. I'm not even the only one who pointed it out in this thread.

Want some links?

[boutons_deux]

Yoni's ideological blindness doesn't need no links, except the ones that align with his ideology.

[Yonivore]

You obviously have no idea how big the derivatives market was at the height of the financial crisis. I find your smugness quite funny in this case because of how wrong you are. I'm not even the only one who pointed it out in this thread.

Want some links?
Sure, throw me some knowledge, Manny.

[MannyIsGod]

http://www.markit.com/cds/announcements/resource/cds_big_bang.pdf

Page 4.

[MannyIsGod]

Smaller estimate, still FAR greater than 1 trillion.

http://moneymorning.com/2008/04/02/credit-default-swaps-a-50-trillion-problem/

EDIT: The date explains the lower estimate.

[MannyIsGod]

Slide 5

http://www.google.com/url?sa=t&source=web&cd=11&ved=0CCwQFjAAOAo&url=http%3A%2F%2Fwww.imf.org%2Fexternal%2Fnp%2Fsem inars%2Feng%2F2009%2Fusersconf%2Fpdf%2Fchui.ppt&rct=j&q=CDS%20Market%20size%202009&ei=u0WcTs71CsWqrAf9qpyCBA&usg=AFQjCNFj8ocRLkhHDLMsf6Q6aMJE0LzVaA&cad=rja

Once again - before the peak and thus the smaller amount that is still FAR greater than 1 trillion.

[MannyIsGod]

[/URL]

Banks and insurance companies are regulated; the credit swaps market is not. As a result, contracts can be traded — or swapped — from investor to investor without anyone overseeing the trades to ensure the buyer has the resources to cover the losses if the security defaults.

Read more: [URL]http://www.time.com/time/business/article/0,8599,1723152,00.html#ixzz1b3JqYESy (http://www.time.com/time/business/article/0,8599,1723152,00.html)



So, all of a sudden in 2008 it becomes apparent that all Wall St is hugely leveraged on MBS which are pretty toxic but whats worse is the insane amount of CDS that are written on those MBS. When it becomes apparent that those CDS are going to have to be paid off because these firms failing it then becomes apparent that there are CDS written ON TOP of other CDS which will have to come in and that the money isn't there to cover any of them.

Yeah, that didn't have anything to do with the cascading fall of confidence in the system. It was those damn people and their loans.

[RandomGuy]

ACORN [was one of the main causes of the housing bubble].

:lmao

Man, that has got to take the cake for stupid shit said here.

Move over "man evolved from a snail, you igmo", here comes a new Yoni-ism.

[RandomGuy]

Oh my - 1 trillion in sub prime debt.

That really fucking compares to the 63 trillion of outstanding CDS debt, doesn't it Yoni?

CDS debt, especially naked swaps basically double the losses to an economy from every bond default.

Before it used to be just the people who held the bond that lost money.

Now the hedge fund that issued the swap also takes the hit.

But this is private sector innovation. That would never cause any ill-effects. Musta bin the big bad gubmint.

[Yonivore]

Smaller estimate, still FAR greater than 1 trillion.

http://moneymorning.com/2008/04/02/credit-default-swaps-a-50-trillion-problem/

EDIT: The date explains the lower estimate.
$50 Trillion is total assets involved in CDS's. They don't say how much of that is related to the mortgage crisis but they do suppose, down in the article...


Big Defaults, Big Trouble

Suddenly home mortgages along with corporate credit and other types of consumer credit are in question and loss rates, which were very low in 2005-06, are soaring.

That spells big trouble for credit default swaps.

If just 10% of CDS underlying risks go bust, somewhere in the financial system there will be $5 trillion in losses.

Yes, there could well be $5 trillion of profits elsewhere in the system, because derivative transactions theoretically balance out. But once defaults start piling up, it's possible that many of those losses will become real, while the profits simply won't.

For example, hedge funds that have offered credit protection on risks far in excess of their current capital will quickly be unable to pay claims. Their counterparties will suffer unexpected losses, even though they thought they were protected by a CDS.
There's no certainty the losses would even approach $50 or $63 Trillion.

This article seems to unjustly paint the CDS market as inherently unstable when, it seems to me they don't adequately dispel their own premise "derivative transactions theoretically balance out."


http://www.markit.com/cds/announceme...s_big_bang.pdf

Page 4.
Again, how much of the CDS involved are represented by toxic debt?


Slide 5

http://www.google.com/url?sa=t&sourc...0LzVaA&cad=rja

Once again - before the peak and thus the smaller amount that is still FAR greater than 1 trillion.
Nothing about the amount related to the toxic debt.

[MannyIsGod]

You don't understand the amount related to toxic debt is irrelevant because the largest firms that wrote all of these were going down. When AIG failed it wasn't just failing on its CDS written on toxic debt. It was failing on all of them. Confidence in the entire system went through the floor.

Why do you think the amount of CDS outstanding debt has been falling fairly fast since the crisis?

Of course all of the CDS's won't be defaulted on. Just like not all sub prime loans will be defaulted on. Are you claiming 1 trillion in defaulted loans, Yoni? Thats not the point. When you're heavily leveraged on an investment vehicle you don't go "Oh, well I'll get 80 cents on the dollar so ITS OK".

[boutons_deux]

The Treasury did eat $1.1T in toxic debt to get it off the financial sector's books.

the CDO/MBS/derivatives market is separate has been variously estimated to at least $40T, and I too have seen the $60T numbers.

[MannyIsGod]

I love how you put up a claim of 1 trillion in toxic debt and then move the goal posts to how much has actually failed when you get shown that 1 trillion was a pretty small drop in the bucket. :lol At least you've backed off your stupid claim that I was somehow confusing CDS outstanding debt with the national debt. :lmao

I intentionally bumped this thread because it was incredibly clear just how wrong you were. Thanks for biting hard and sinking that hook even deeper.

[Yonivore]

[/URL]

Banks and insurance companies are regulated; the credit swaps market is not. As a result, contracts can be traded — or swapped — from investor to investor without anyone overseeing the trades to ensure the buyer has the resources to cover the losses if the security defaults.

Read more: [URL]http://www.time.com/time/business/article/0,8599,1723152,00.html#ixzz1b3JqYESy (http://www.time.com/time/business/article/0,8599,1723152,00.html)


So, all of a sudden in 2008 it becomes apparent that all Wall St is hugely leveraged on MBS which are pretty toxic but whats worse is the insane amount of CDS that are written on those MBS. When it becomes apparent that those CDS are going to have to be paid off because these firms failing it then becomes apparent that there are CDS written ON TOP of other CDS which will have to come in and that the money isn't there to cover any of them.

Yeah, that didn't have anything to do with the cascading fall of confidence in the system. It was those damn people and their loans.
Pretty ominous.

I think it's important, to your position in the debate, to actually quantify the amount of assets affected by CDS's underwriting toxic debt. Because Credit Default Swaps are not necessarily the bad thing your blanket argument would suggest.

That's why I laughed at the $63 Trillion dollar figure and decided you weren't serious.

[Yonivore]

I love how you put up a claim of 1 trillion in toxic debt and then move the goal posts to how much has actually failed when you get shown that 1 trillion was a pretty small drop in the bucket. :lol At least you've backed off your stupid claim that I was somehow confusing CDS outstanding debt with the national debt. :lmao

I intentionally bumped this thread because it was incredibly clear just how wrong you were. Thanks for biting hard and sinking that hook even deeper.
My figure is closer to the truth than $63 Trillion.

[MannyIsGod]

Derivatives can certainly play a role in any economy assuming they are properly regulated. When people can write contracts and sell them non stop while having absolutely no ability to pay then of course they are a terribly bad thing. Thats exactly what happened in the build up to the financial crisis. Thats why those companies failed. It wasn't the sub prime mortgages. THATS the point.

[MannyIsGod]

My figure is closer to the truth than $63 Trillion.

Even if I go with the lower end of estimates on the outstanding derivatives debt it still dwarfs your figure. It is likely more fair for me to do that, but that in no way helps your point.

[RandomGuy]

U.S. House of Representatives
Committee on Oversight and Government Reform
Darrell Issa (CA-49), Ranking Member (http://republicans.oversight.house.gov/images/stories/Reports/20100218followthemoneyacornseiuandtheirpoliticalal lies.pdf)

The last of six findings in the report:


Why were unqualified mortgage applicants directed to the subprime loans? Because conventional mortgage rules would not tolerate the ACORN invention known as "undocumented income."

Banks didn't trick anybody in to subprime mortgages. It was the only vehicle available to people who they were being extorted into loaning money.

Uh-huh. A Republican-led witch hunt found witches.

Shocking.

Given for a second that ACORN, the multimillion-dollar organization, strong-armed the billion dollar banks into making loans in the housing crisis, the scale of the bubble was such that any such lending directly caused by this organization would have paled in comparison to the scope of the problem.

You are, in essence, attempting to make the argument that a guy pissing in the Mississipi is one of the main causes of the flooding 200 miles downstream.

Sure the guy contributed to the flooding. Was he one of the main causes? No.



The Dunning–Kruger effect is a cognitive bias in which unskilled people make poor decisions and reach erroneous conclusions, but their incompetence denies them the metacognitive ability to recognize their mistakes.[1] The unskilled therefore suffer from illusory superiority, rating their ability as above average, much higher than it actually is, while the highly skilled underrate their own abilities, suffering from illusory inferiority.


Kruger and Dunning proposed that, for a given skill, incompetent people will:

1.tend to overestimate their own level of skill;
2.fail to recognize genuine skill in others;
3.fail to recognize the extremity of their inadequacy;
4.recognize and acknowledge their own previous lack of skill, if they can be trained to substantially improve.

You got no critical thinking skillz, homie, if you present an obviously politically motivated hit piece's conclusions as proof that a multi-trillion dollar bubble was caused to any large degree by some community organization with a laughably small budget.

[RandomGuy]

Oh my - 1 trillion in sub prime debt.

That really fucking compares to the 63 trillion of outstanding CDS debt, doesn't it Yoni?

The $63 trillion dollars of CDS's are only those that are voluntarily reported to the non-profit organization that tracks them.

The real figure must therefore be higher, but how much is not known.


Sources of market dataData about the credit default swaps market is available from three main sources. Data on an annual and semiannual basis is available from the International Swaps and Derivatives Association (ISDA) since 2001[22] and from the Bank for International Settlements (BIS) since 2004.[23] The Depository Trust & Clearing Corporation (DTCC), through its global repository Trade Information Warehouse (TIW), provides weekly data but publicly available information goes back only one year.[24] The numbers provided by each source do not always match because each provider uses different sampling methods.[3]

According to DTCC, the Trade Information Warehouse maintains the only "global electronic database for virtually all CDS contracts outstanding in the marketplace."[25]

The Office of the Comptroller of the Currency publishes quarterly credit derivative data about insured U.S commercial banks and trust companies.[26]

Of course, nothing stops an entity from issuing multiple naked CDS' on one entity in theory.

That would mean that if ten entities took out CDS' on some company's bonds and that company went under, that would create $11 worth of losses to the economy for each $1 of bond, potentially magnifying losses to the financial sector by many times over.

(edit)
62.2 trillion in 2007:
http://www.isda.org/statistics/pdf/ISDA-Market-Survey-annual-data.pdf

You were off by $800 billion, which, in this case, was a minor rounding error, as scary as that sounds. :D

[MannyIsGod]

Whats even greater is that if you sell bonds you know you are going to fail and buy CDS that will be paid off when those bonds fail. Win Win! Conflict of interest my ass!

[Yonivore]

Derivatives can certainly play a role in any economy assuming they are properly regulated. When people can write contracts and sell them non stop while having absolutely no ability to pay then of course they are a terribly bad thing. Thats exactly what happened in the build up to the financial crisis. Thats why those companies failed. It wasn't the sub prime mortgages. THATS the point.
I notice you have been remarkably silent on the role played by Fannie and Freddie gobbling up over $1 Trillion dollars in Sub Prime and Alt A mortgage loans at a time when they were nearly fiscally insolvent...and, continuing to project their outlays as being government-backed and damn near impervious to default. Of course, this was made possible with the help of Barney Frank and Maxine Waters who blocked every attempt to reign them in.

So, just what is your figure? Now that we've determined $63 Trillion is laughable...just where is the needle?

[MannyIsGod]

I notice you have been remarkably silent on the role played by Fannie and Freddie gobbling up over $1 Trillion dollars in Sub Prime and Alt A mortgage loans at a time when they were nearly fiscally insolvent...and, continuing to project their outlays as being government-backed and damn near impervious to default. Of course, this was made possible with the help of Barney Frank and Maxine Waters who blocked every attempt to reign them in.

So, just what is your figure? Now that we've determined $63 Trillion is laughable...just where is the needle?


Fannie and Freddie's role was bad.

I don't think we've determined any such thing. You may wish for it to be laughable, but there are documented sources with that figure so I'm not sure how you can say its laughable.

I'll say its on the high side of a range. A range that dwarfs the out standing sub prime mortgages and thus had much more of an influence over the economy.

[Yonivore]

Fannie and Freddie's role was bad.

I don't think we've determined any such thing. You may wish for it to be laughable, but there are documented sources with that figure so I'm not sure how you can say its laughable.

I'll say its on the high side of a range. A range that dwarfs the out standing sub prime mortgages and thus had much more of an influence over the economy.
So, you're suggesting the amount in bad CDS's approaches $63 Trillion or the amount involved in CDS's is $63 Trillion?

I just want to be clear.

[MannyIsGod]

The amount invested in the CDS market in total. Obviously not all of that was bad but nor does it all need to be bad for reasons laid out before.

[Yonivore]

The amount invested in the CDS market in total. Obviously not all of that was bad but nor does it all need to be bad for reasons laid out before.
Okay, so how much of it is bad? Bad, as in underwriting bad/toxic debt not, bad as in I don't like CDSs so they're bad.

[MannyIsGod]

How much of your 1 trillion dollar in toxic debt is bad? Neither is relevant. When underlying confidence in a system goes then how much of it is actually bad is not important. Whether you get 95 cents on the dollar or 80 cents on the dollar is of no real importance when diagnosing whether something is a good investment. Obviously both are bad investments. If all of of those CDS were called in today how many would be paid? Quite a small fraction of them, of course. I don't have an exact number, but you really don't need one.

I'll give you another system where this is a similar case. Deposit accounts. If everyone were to make a run on the bank today and withdrawl the amount in their account how much would actually be able to be paid out? The entirety of the accounts? Yeah fucking right. Why does the system work then? Because of confidence in the system.

When confidence ran out of the CDS market, it had disastrous effects.

[Winehole23]

I notice you have been remarkably silent on the role played by Fannie and Freddie gobbling up over $1 Trillion dollars in Sub Prime and Alt A mortgage loans at a time when they were nearly fiscally insolvent...and, continuing to project their outlays as being government-backed and damn near impervious to default.http://www.spurstalk.com/forums/showthread.php?t=120065

http://www.spurstalk.com/forums/showthread.php?p=3945670&highlight=Fannie#post3945670

[Winehole23]

http://www.spurstalk.com/forums/showthread.php?p=4630816&highlight=Fannie#post4630816

[Winehole23]

My own own personal feeling is that our recent bubbles weren’t much different than pyramid scams and lotteries; they’re the handiwork of an essentially regressive and deeply cynical political organization that systematically hoovers up taxes and investment money mainly from middle-class suckers, where it eventually gets eaten in short-term cashouts and mostly blown on sports cars and tropical vacations and eye jobs for the trophy wives of Wall Street executives. Crackonomics: take literally all the spare money from four square city blocks and turn it into one tricked-out Escalade.

For me the basic dynamic of the mortgage bubble is some Ivy League dickwad hawking a billion dollars of securitized subprime mortgages to a pension fund, and then Hobie-sailing off into the sunset with a bonus after they all blow up. Of course my seeing it that way might have a lot to do with my own personal psychological prejudices, and I get that some other person with different hangups might choose to focus on Barney Frank deciding to “roll the dice on home ownership” with the GSEs.


But what I don’t see is how anybody can say that all of this happened because Fannie and Freddie rigged the game to get Mexicans in homes, and then the banks and the ratings agencies just reacted organically to the corrupted market and helped the bubble along through no fault of their own. That’s just another (albeit more convincing) version of the early attempt to pin the disaster on the Community Reinvestment Act, which in turn is just another way of playing the red-blue blame game, which in turn is missing the point.


This GSE story is a big one, but if it gets used as a path back to a “The Market Reacted Rationally” version of history, we’re screwed. It has to be looked at as an important part of a diabolical whole, a symbiotic scheme in which the banks and the state were irreversibly intertwined in an enterprise that on both sides was never about market economics, but crime. Because otherwise… the diversionary notion that one side or the other is wholly to blame is part of what makes the whole scam possible.


p.s. Just to get this out of the way, I love Zero Hedge, and Marla Singer has been really nice to me personally. I just don’t completely agree with this particular thing. I don’t see any reason why focusing blame on the banks and the ratings agencies and AIG was “fundamentally flawed,” because, well, shit, they were to blame. The fact that Fannie and Freddie now get to jump in the pigpen with them doesn’t change that for me.


I think in the end what we’re going to find is that all the relevant actors had their own motivations for getting involved in the bubble. Two and now three presidential administrations let the Fed overheat the economy for political reasons that should be obvious. Alan Greenspan, hell, he did it because he loves seeing himself on magazine covers and wanted to keep getting invited to the right Manhattan parties. There were congressmen that converted the expansion of cheap credit into low-income votes. The bankers and lenders went along because the system of compensation on Wall Street is fucked and rewards short-term thinking while ignoring long-term consequences.


To me all of these people were equally guilty of making bad decisions to benefit themselves in the here and now at the expense of the whole in the future. When it comes to bubbles, It Takes a Village, and blaming the whole mess on the “socialist” aims of a pair of government agencies seems off base — particularly since the Randian protocapitalists running the banks benefited every bit as much from this socialism as actual homeowners, and perhaps even more, when one considers that homeowners get foreclosed upon, while bonuses are forever.http://www.spurstalk.com/forums/showthread.php?p=3968989

[RandomGuy]

Okay, so how much of it is bad? Bad, as in underwriting bad/toxic debt not, bad as in I don't like CDSs so they're bad.

It is impossible to tell how much is bad. They are bets, only you don't have to have to hold a lot to lay off bad bets.

There are no guidelines to say how much of each dollar given to the issuer has to be set aside in case of default.

Given that the amount of issued CDS' has fallen off markedly, I would say people are being a LOT more hesitant to buy/sell them. Probably a good thing, from a system stability standpoint.

Here's a fun thought:

Let's say you are a large company. You know you are in trouble.

You form a subsidiary and a bunch of layered shells. At the end of it, you give juuuusst enough cash to purchase some CDS' on your own parent's bonds.

Then you default and go into bankruptcy, then have your itty bitty subsidiary cash out.

Bam. You have now turned your liabilities into assets.


I would hope this would be illegal. The fact that CDS' make it possible to think about, should be of concern to people who think capitalism is a good idea.

[Yonivore]

It is impossible to tell how much is bad. They are bets, only you don't have to have to hold a lot to lay off bad bets.

There are no guidelines to say how much of each dollar given to the issuer has to be set aside in case of default.

Given that the amount of issued CDS' has fallen off markedly, I would say people are being a LOT more hesitant to buy/sell them. Probably a good thing, from a system stability standpoint.

Here's a fun thought:

Let's say you are a large company. You know you are in trouble.

You form a subsidiary and a bunch of layered shells. At the end of it, you give juuuusst enough cash to purchase some CDS' on your own parent's bonds.

Then you default and go into bankruptcy, then have your itty bitty subsidiary cash out.

Bam. You have now turned your liabilities into assets.


I would hope this would be illegal. The fact that CDS' make it possible to think about, should be of concern to people who think capitalism is a good idea.
All that to say, you don't know? Then why are CDS's such a bad thing? Because you're told they are? And, if you can't relate the quantity of debt at risk in CDS's to the toxic debts that built up in the mortgage crisis, why all the caterwauling?

[FuzzyLumpkins]

You don't understand the amount related to toxic debt is irrelevant because the largest firms that wrote all of these were going down. When AIG failed it wasn't just failing on its CDS written on toxic debt. It was failing on all of them. Confidence in the entire system went through the floor.

Why do you think the amount of CDS outstanding debt has been falling fairly fast since the crisis?

Of course all of the CDS's won't be defaulted on. Just like not all sub prime loans will be defaulted on. Are you claiming 1 trillion in defaulted loans, Yoni? Thats not the point. When you're heavily leveraged on an investment vehicle you don't go "Oh, well I'll get 80 cents on the dollar so ITS OK".

You can explain it to him all day but his sources that he has decided to trust cherry pick and view in a vacuum. I have gottent ot the point where i do not even try to reason with them. I just ridicule.


A stupid man's report of what a clever man says can never be accurate, because he unconsciously translates what he hears into something he can understand.

[boutons_deux]

Another angle showing Yoni's horribly wrong, again:

Bank of America Deathwatch: Moves Risky Derivatives from Holding Company to Taxpayer-Backstopped Depository

Bank of America’s holding company — the parent of both the retail bank and the Merrill Lynch securities unit — held almost $75 trillion of derivatives at the end of June, according to data compiled by the OCC. About $53 trillion, or 71 percent, were within Bank of America NA, according to the data, which represent the notional values of the trades.

That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.

http://www.nakedcapitalism.com/2011/10/bank-of-america-deathwatch-moves-risky-derivatives-from-holding-company-to-taxpayer-backstopped-depositors.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capi talism%29

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derivatives only for BoA.