Banks Reopen Global Casino

[Slimprofits]

http://www.spiegel.de/international/...638732,00.html

"The taxpayer is paying for the chips in the casino," the head of the German operations of an international investment bank says quite openly, but anonymously nevertheless. "It doesn't get any better." The government, he says, provided guarantees for banks like Munich's Hypo Real Estate, whose securities are now being traded on the market at a huge discount. Investment banks, for their part, have bought the securities with money they borrowed from central banks at ridiculously low rates.

According to the anonymous bank executive, these investment banks, as well as hedge funds and major investors, expected that governments, in the wake of the Lehman Brothers bankruptcy in September, would ultimately bail out all major banks.

Indeed, rates for bank bonds soon began rising again, and the first aggressive players in the market collected exorbitant profits. "Unfortunately, the bad bonds of the bankruptcy candidates are now sold out," says the bank executive.

[..]

The banks that are actually issuing new loans are the losers in the current equation. Their margins are significantly lower and their risks higher. But the investment banks, which have specialized in the trading of existing loans, have access to the same cheap refinancing through the central banks. In other words, they are making money by simply turning over existing money.

[..]

Financial products like collateralized debt obligations (CDOs), treated as ticking time bombs until recently, are in demand once again, and the process of collateralization, frowned upon since the financial crisis erupted, is back. As if nothing had happened, Morgan Stanley is packaging ("securitizing") downgraded CDOs into new securities, some of which are expected to receive the coveted AAA rating from Moody's.

[..]

"A few years ago, the investment banks got rich on their customers' money," says a former high-flier in the industry. "When that resource became too small, they fell back on their shareholders' money. Now they've reached the biggest pool the world can offer: taxpayers' money."

[tsetsefly]

Re: Banks Reopen Global Casino

We lose again... is there anyone that still says it wouldn't of been good to let these banks go under?

[derelict54]

Re: Banks Reopen Global Casino

I think I just vomited in my mouth.

[don]

Re: Banks Reopen Global Casino

Remember the Yen Carry Trade ;)

[litfuse]

Re: Banks Reopen Global Casino

the whole process of wealth transfer from the poor to the rich needs to be streamlined.

why go through the hassle of creating all these financial instruments and non enforced rules.
just have everyone send a monthly check to the fed that will then be pooled to pay banking bonuses.

no muss no fuss.
i've always felt this way about speeding tickets.
give police wifi credit processing terminals, you get pulled over. pay $100 bucks on the spot and go on with life.

[rjwjr]

Re: Banks Reopen Global Casino

the whole process of wealth transfer from the poor to the rich needs to be streamlined.

why go through the hassle of creating all these financial instruments and non enforced rules.
just have everyone send a monthly check to the fed that will then be pooled to pay banking bonuses.

Come on, you guys, we need to quit blaming "the rich". We all want to get "rich", don't we?! Let's quit whining and let's start discussing actual ideas for improving our own lot in life. Yes, there are some real crooks out in this world, but to engage in class warfare of "the rich" vs the poor is unproductive and misguided. From now on, everytime I run into a post that blames "the rich" I'm going to try to post these comments attributed to Abraham Linclon. Maybe, eventually, we'll stop whining and start having productive discussions rather than unproductive bitch sessions.

Abraham Lincoln once said:

• You cannot help the poor by destroying the rich.
• You cannot strengthen the weak by weakening the strong.
• You cannot bring about prosperity by discouraging thrift.
• You cannot lift the wage earner up by pulling the wage payer down.
• You cannot further the brotherhood of man by inciting class hatred.
• You cannot build character and courage by taking away men's initiative and independence.
• [FONT='Arial','sans-serif']You cannot help men permanently by doing for them, what they could and should do for themselves.[/FONT]

[bcassill]

Re: Banks Reopen Global Casino

Come on, you guys, we need to quit blaming "the rich". We all want to get "rich", don't we?! Let's quit whining and let's start discussing actual ideas for improving our own lot in life. Yes, there are some real crooks out in this world, but to engage in class warfare of "the rich" vs the poor is unproductive and misguided. From now on, everytime I run into a post that blames "the rich" I'm going to try to post these comments attributed to Abraham Linclon. Maybe, eventually, we'll stop whining and start having productive discussions rather than unproductive bitch sessions.

Abraham Lincoln once said:

• You cannot help the poor by destroying the rich.
• You cannot strengthen the weak by weakening the strong.
• You cannot bring about prosperity by discouraging thrift.
• You cannot lift the wage earner up by pulling the wage payer down.
• You cannot further the brotherhood of man by inciting class hatred.
• You cannot build character and courage by taking away men's initiative and independence.
• [FONT='Arial','sans-serif']You cannot help men permanently by doing for them, what they could and should do for themselves.[/font]

rjwjr,

On this one, I completely agree with you. This country was built by hard working entrepreneurs, and we need to have a system that continues to support these people. I think part of what the previous poster was going on about are the folks in the FIRE side of the house who continue to rake it in even via HFT, frontrunning, low cost of credit, etc. to squeeze out the individual and institutional investor after "helping" us into a near depression (see www.zerohedge.com and www.deepcapture.com for more). It's like the party never stopped for some of these folks. Never discount the effect that greed will have on people's willingness to gamble with other people's money (e.g. investors, shareholders, or taxpayers) in the pursuit of making a quick buck.

[derelict54]

Re: Banks Reopen Global Casino

It would be nice to bring this "Once in a Millinium Land Grab" out in the open for once and for all. Like a nice concise "one pager" in every major newspaper in the country. We need some rich old guy to sponsor the ad(perhaps there is one with one ounce of deciency left and perhaps a believer in God, looking to make amends before seeing the pearly gates, Warren Buffet are you out there? or has your heart grown too cold, too close to the dark side?)

These collusal companies, whatever these banks are now (hedge fund/security dealer/blood sucking squid/deities of the worst ideas of man kind) are now using our grandchildrens taxpayer money to buy back all the toxic deeds of OUR LAND back from the world at rock bottom prices. Toxic has turned into Gold.....at the right price, you bet they are. Especially when you are looking at the chasm of darkness the dollar is falling into. Get those senior rights to those deeds!!!! While we are at it, lets get some more liquidity from the taxpayer and wait for the commercial real estate shoe to drop, then "rinse, cycle and repeat"

"We can get all the residential and commercial senior rights for 60 cents or less on the dollar, meanwhile we bleed off all industrial production by not lending, so small businesses file bankruptcy and landowners get foreclosed on. Investors all over the world will be so desperate to sell us back these securitized debts that were made possible by a fractional reserve banking system where 95% (or so, can't find the exact answer, someone help research) of a deferred interest payment on a Ninja Option Arm can then be lent out to the next borrower. When everyone is foreclosed on and we own every note out we can get our hands on, we will then devalue the dollar 50% (or more) and surprise!! When the dust settles and we are on the new normal, who owns the lion share of the most tangible asset in the world? The Bankstas.

"Its all going according to plan master" "good....."

If you guys want a timeline on when the dollar REALLY devalues, (or the POOM in KaPOOM) sometime after the banks buy up most of the commercial real estate for pennies on the dollar. "Why be in such a hurry, This feast has just started."

It took until 1933 for the Roosevelt to finally do it, we are still in 1929 of this thing. However, with technology and trading these deeds made easy, that timeline could shrink by half.

So whether monetization kills the dollar, or our politicans kill the dollar, look for a new currency tie (gold, Amero, whatever) AFTER the commercial real estate is all bought up by the Bankstas.

Personally, I think the Amero will probably be brought out, nothing like a nice opaque currency like the Euro to help them mask more thievery in the 21st century. When Dumpster diving hits its peak in America, look for America to spread those overwhelming debts over the natural resources and industry of our neighbors to the N and S. It also serves the purpose of ultimately opening the door to those resources for what will be colussal bank entities with massive land holdings of the good ole USA to leverage and buy those countries assets. Chase, Citi, BofA, Goldman, I just swallowed my vomit again.

"I'm sure America's heartland can't wait to be competitive with Mexican labor can you? " Well its already so bad here, many are ready. Turn off your MSM and your American Idol and take a look.

In the meantime, they start laying the political framework for more profits.
Maybe after they steal our land, they can securitize the remaining mineral rights in our Nation. "Naw, we own most of that already." "Lets securitize Air & Carbon" Perfect.

Keep spending most our lives living in a banksta paradise--

[ze100]

Re: Banks Reopen Global Casino

Great quote from Abraham Lincoln. I think the root cause of the problem lies in the fact that banking (like many other industries) - is becoming cartel like. It's is not to say it operates like a cartel, it is just that the barriers to entry are extremely high, and that leverage of large corporations have with government is an unfair advantage.

I also find that when laws are changed "in the interest of the consumer" - such as the elimination of the glass stiegal act, or allowing mergers of large corporations etc... it is most often in the interest of the consumer in the short run, but would probably not be in the interest of the consumer in the long run (which is obvious in the case of the elimination of the glass stiegal act). There is too much centralization occuring in the market place, and this reduces competition - not enhances it.

Ze100

[ThePythonicCow]

Re: Banks Reopen Global Casino

Come on, you guys, we need to quit blaming "the rich".

Well, yes and no.

I don't think that the ideal wealth distribution is everyone exactly equal, nor is it the opposite extreme with one person owning everything and the rest of us his indentured servants.

Since the world lacks enough resources for six billion Bill Gates, and since some people lack enough talent to get out of their own way, the only way to get perfect equality is for everyone to be poor. Since in the natural order some will be more productive than others, the only way to get perfect imbalance is tyranny.

The optimum is somewhere between. Those who work harder or have more valuable talents or perhaps a bit more luck should gain more, while the lazy, stupid, good for nothing bums should have less.

We should not be debating which extreme is best; that's pointless as both extremes suck.

Rather we should ask what is the healthy range of inequality, and whether our current economy is more or less than that.

One way for an economy to become a little too unequal is for the richer to gain too much control of the government regulators, beauracrats, legislators, administrators or judges. It would be like the LA Lakers and Boston Celtics "owning" most of the referees in the NBA. That's not good.

Presently I believe we have too much imbalance. In too many industries there are oligarchies that have pretty much closed the door on serious competitors using in part legislation and regulation that they steer in their own self interest.

I can't site references, but I am pretty sure that I've seen statistics showing that the wealth imbalance in America peaked in the late 1920's, and has recently peaked again. This is another indicator that the distribution of wealth can become, and has become, too imbalanced, leading to a less stable economy.

So it is not a question of blame the rich, nor is it a question of it being "unfair" for some to earn more, even much more, than others. It's really not about individuals at all. Some will be more productive than others and as many as possible should have a decent opportunity to make good use of their particular talents and ambitions.

Rather it is about the structure of society and government. A good government provides a well structured, level playing field on which we can all endeavor to lead a good life. A good government does not provide unfair advantage to those wealthy enough or powerful enough to extract special priviledge.

Once again we seem to have one of those never ending discussions:

White sucks! No, Black sucks!

Rather the more useful discussion is what shade of grey is best.

[ThePythonicCow]

Re: Banks Reopen Global Casino

I think the root cause of the problem lies in the fact that banking (like many other industries) - is becoming cartel like.

Yes - well said.

[derelict54]

Re: Banks Reopen Global Casino

BCassill, Well said. We are looking for the rules of the game to be FAIR, that's all. The government to represent the people, make an even playing field, not to use our money for the descretions of a few. To represent our nations people an

On this one, I completely agree with you. This country was built by hard working entrepreneurs, and we need to have a system that continues to support these people. I think part of what the previous poster was going on about are the folks in the FIRE side of the house who continue to rake it in even via HFT, frontrunning, low cost of credit, etc. to squeeze out the individual and institutional investor after "helping" us into a near depression (see www.zerohedge.com and www.deepcapture.com for more). It's like the party never stopped for some of these folks. Never discount the effect that greed will have on people's willingness to gamble with other people's money (e.g. investors, shareholders, or taxpayers) in the pursuit of making a quick buck.

Bcassill,

Well said, I will echo. The people of the USA are looking for a FAIR GAME, that's all. An even playing field. We don't have it, the bankers and their bought politicians have taken it. The government needs to represent the people of this nation and not the lobbyists of international corporate conglomerates. The rule bending, game changing BS has resulted in the International Elephants that we helped build, are now trampling the small businesses of America, and are now being allowed to strip the the assets from fellow citizens. Put back in Galss Steagle, regulate CDS markets, wind down monopolies and ogiliopolies. Where is the game in Ogilopolies?

[rjwjr]

Re: Banks Reopen Global Casino

BCassill, Well said. We are looking for the rules of the game to be FAIR, that's all. The government to represent the people, make an even playing field, not to use our money for the descretions of a few. To represent our nations people an



Bcassill,

Well said, I will echo. The people of the USA are looking for a FAIR GAME, that's all. An even playing field. We don't have it, the bankers and their bought politicians have taken it. The government needs to represent the people of this nation and not the lobbyists of international corporate conglomerates. The rule bending, game changing BS has resulted in the International Elephants that we helped build, are now trampling the small businesses of America, and are now being allowed to strip the the assets from fellow citizens. Put back in Galss Steagle, regulate CDS markets, wind down monopolies and ogiliopolies. Where is the game in Ogilopolies?

Much better and more productive discussion. Thanks, guys.

So the problem is not "the rich", the problem is our elected "representatives" and "defenders of the constitution" that are more concerned about re-election and self-enrichment than serving the constituency. We have the wrong people in positions of power, we have no forced term limits to get them out, and they have stacked the deck to make it hard to vote them out. While there, they create rules for us, but exempt themselves, and they use our tax dollars to increase their power and influence. It's our politicians that need an overhaul, not our Constitution or our capitalist society.

[Jim Nickerson]

Re: Banks Reopen Global Casino

Much better and more productive discussion. Thanks, guys.

So the problem is not "the rich", the problem is our elected "representatives" and "defenders of the constitution" that are more concerned about re-election and self-enrichment than serving the constituency. We have the wrong people in positions of power, we have no forced term limits to get them out, and they have stacked the deck to make it hard to vote them out. While there, they create rules for us, but exempt themselves, and they use our tax dollars to increase their power and influence. It's our politicians that need an overhaul, not our Constitution or our capitalist society.

I've written the same here more than five times at least, and I see it as an absolute fact.

The question is what is going to change how the system currently operates?

There is unending bitching about our system here, and no doubt many other sites/venues, but I am pressed to recall any serious solutions being advanced. Over the past few months I have become of the opinion that perhaps the 9/11 Islamic extremists came closest to making a real change in how this country might operate than has any other action I readily recall. In some respects what they attacked were at least symbolic of a lot of the ills this country faces.

Is the populace becoming more intelligent and educated or less on average? My guess it less, and as such, it is difficult for me to imagine how voters are going to make the system change.

[sunskyfan]

Re: Banks Reopen Global Casino

I'll step and blame "the rich". This is not like we are dealing with a weather event or a comet coming from outer space we are dealing with a system whose rules are set up and exploited by people who are, by definition, rich. That is the point of capitalism. If you have money it indicates you should be the ones who get to make money. Give me a break. We are not talking about about the kid mowing lawns and showing initiative getting screwed by the mob. We are talking about people with highly honed skills for selling and generally their product the last 15 years has been shown to be bullshit. They have been called on it because the accountability of the complexity of the global system caught up with the size of their lies and the magnitude of their greed. Their behavior is so decorrelated with actually producing something they think that destruction is creation and that risk is certainty.

I think a person has a right to defend and exploit that which they create but don't use a legitimate defense of prosperity to cover for a bunch of pilots that irresponsibly flew the plane into the ground and parachuted just before the crash while they are strutting around the debris like they are hot shit because they survived.

Remember: the great weakness of collective thinking is that it is easier to legitimize failure than to actualize success. "The Rich" in this go round are the ones legitimizing failure. That is why the system is collapsing.