tag:blogger.com,1999:blog-2761684730989137546.post8207806839017905421..comments2024-03-18T19:09:18.510-04:00Comments on Mike Norman Economics: William Nelson — Setting the record straight on why leverage ratio must changemike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger47125tag:blogger.com,1999:blog-2761684730989137546.post-41406520546552122132017-08-13T08:25:11.911-04:002017-08-13T08:25:11.911-04:00MRW explain to me the functional relationship wher...MRW explain to me the functional relationship where some people were committing mortgage fraud and then 2 years later oil price collapses to $33...Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-63998213302667882512017-08-13T07:23:34.991-04:002017-08-13T07:23:34.991-04:00And it's a simple algebraic relationship...And it's a simple algebraic relationship...Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-9476682471090868252017-08-13T07:21:54.703-04:002017-08-13T07:21:54.703-04:00It's funny they make shit up all the time like...It's funny they make shit up all the time like "$29T!" and all their "neoliberal conspiracy!" theories but then here we have an actual event where the industry is asking for a regulatory modification and they don't exhibit any understanding of it...Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-90459091750376719142017-08-13T07:14:51.352-04:002017-08-13T07:14:51.352-04:00That's why they get nowhere they are FOS....That's why they get nowhere they are FOS....Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-58246284664635627212017-08-13T01:14:35.730-04:002017-08-13T01:14:35.730-04:00”FBI warns of mortgage fraud 'epidemic’”
http:...<i>”FBI warns of mortgage fraud 'epidemic’”</i><br />http://www.cnn.com/2004/LAW/09/17/mortgage.fraud/<br />MRWhttps://www.blogger.com/profile/13878920695841363553noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-10624351454843406052017-08-13T00:59:17.210-04:002017-08-13T00:59:17.210-04:00Matt,
”Economist: True Fed Exposure $29 Trillion”...Matt,<br /><br /><i>”Economist: True Fed Exposure $29 Trillion”</i><br />http://www.newsmax.com/StreetTalk/Economist-Fed-Exposure-Trillion/2011/12/13/id/420763/<br /><br /><i>”$29,000,000,000,000: A Detailed Look at the Fed’s Bailout by Funding Facility and Recipient”</i><br />http://www.levyinstitute.org/publications/29000000000000-a-detailed-look-at-the-feds-bailout-by-funding-facility-and-recipient<br /><br />Here’s Bill Black to explain how the fraud happened, and <i>how it was engineered</i>. Interview with Harry Shearer, May 1, 2011. Not boring.<br />http://harryshearer.com/le-shows/may-1/?tag=bill%20black#MRWhttps://www.blogger.com/profile/13878920695841363553noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-42944893061559972082017-08-12T22:57:27.805-04:002017-08-12T22:57:27.805-04:00Well if they commit fraud all the time why are the...Well if they commit fraud all the time why are they coming in here and asking for a change in the regulations?<br /><br />Total bank assets back then were like 8 or 9 $T why would they need $29T that is a BS #<br /><br />Your whole view is BS....<br /><br />Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-73424449967910120242017-08-12T21:39:57.869-04:002017-08-12T21:39:57.869-04:00As Bill Black suggested, the Feds could have taken...<i>As Bill Black suggested, the Feds could have taken over the banks and pumped liquidity into them to restore solvency -- but retained ownership while the bank managers went to jail.</i><br /><br />An idea I liked. And I’m sure the general public too. Remember the hordes that hit bank CEO’s private houses in CT and parts of NY threatening to kill them for what they did to them?<br /><br /><i>Or Steve Keen's $75,000 debt jubilee could have bailed out homeowners rather than banks, and that would have indirectly restored bank solvency.</i><br /><br />Instead the Fed gave $29T to the banks. Main Street? Go fuck yourself.<br /><br /><i>Deal with WHAT? They caused it... </i><br /><br />And that goes back to the S&L crisis that identified the culprits and put in place rules and regs that Timothy Geithner was legally bound to regulate. The FBI had warned in open testimony before Congress in Sept 2004 that there was “an epidemic of mortgage fraud” in the US and that 90% of mortgages were fraudulent. As NY Fed head, it was his <b>responsibility</b> to regulate the mortgage banks, because mortgage banks do not come under the federal bank charter.<br /><br /><i>It may take WWIII to force us to do national planning for those sorts of things.</i><br /><br />Why could FDR do it in a year and a half?<br />MRWhttps://www.blogger.com/profile/13878920695841363553noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-13470419875675944342017-08-12T18:50:08.999-04:002017-08-12T18:50:08.999-04:00... there is no excuse for not having a 100% relia...<i> ... there is no excuse for not having a 100% reliable payments system. </i> Dan Lynch<br /><br />Absolutely. But in addition to 100% reliability, we should make also make sure the system is 100% ethical. That way, for example, we won't have the injustice of workers being replaced with automation financed with what is, in essence, because of government privileges for the banks, the PUBLIC'S CREDIT, but for private gain.<br /><br />Andrew Andersonhttps://www.blogger.com/profile/14296407661618321637noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-22160349612218125782017-08-12T18:36:52.917-04:002017-08-12T18:36:52.917-04:00This comment has been removed by the author.Andrew Andersonhttps://www.blogger.com/profile/14296407661618321637noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-6729970879992180422017-08-12T17:57:08.329-04:002017-08-12T17:57:08.329-04:00"because the powers that be had no plan to de..."because the powers that be had no plan to deal with it "<br /><br />Deal with WHAT? They caused it... <br /><br />Go back and look at Reserve assets from back in 2006 thru summer of 2008 steady at $300b... then by Dec 2008 they ran them up to $1T which is 700B increase in like 90 days ... where the hell are banks going to get another $70b of capital that fast?????<br /><br />N-O-W-H-E-R-E....<br /><br />Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-12389127651123502972017-08-12T16:59:49.873-04:002017-08-12T16:59:49.873-04:00Allowing bad businesses to fail is no panacea. The...<i>Allowing bad businesses to fail is no panacea. They allowed Lehman Brothers to fail in September 2008 and it precipitated the Global Financial Crisis.</i><br /><br />Right, because the powers that be had no plan to deal with it -- and they still don't. In their worldview, the system wasn't supposed to fail in the first place so they never had a plan to deal with failure.<br /><br />There are alternatives. As Bill Black suggested, the Feds could have taken over the banks and pumped liquidity into them to restore solvency -- but retained ownership while the bank managers went to jail. Later the banks could have been sold back to the private sector.<br /><br />Or Steve Keen's $75,000 debt jubilee could have bailed out homeowners rather than banks, and that would have indirectly restored bank solvency.<br /><br />Either way, there is no excuse for not having a 100% reliable payments system. <br /><br />Remember when Greece debated leaving the Euro, and one of the reasons they chickened out was because they didn't have their own payments system and it might have taken them 2 - 3 years to create a payments system from scratch? <br /><br />That's crazy. The payments system should be considered a public utility similar in importance to the electric grid or the internet. It may take WWIII to force us to do national planning for those sorts of things.<br />Dan Lynchhttps://www.blogger.com/profile/11189866002273597534noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-1860262133687624972017-08-12T16:29:28.328-04:002017-08-12T16:29:28.328-04:00The problem with bailing out banks is not money, w...<i>The problem with bailing out banks is not money, which the government can create with keystrokes, but that it rewards bad behavior and misallocation of resources. The whole point of capitalism is that it supposedly does a better job of allocating resources -- but that only works if we allow bad businesses to fail.</i><br /><br />Allowing bad businesses to fail is no panacea. They allowed Lehman Brothers to fail in September 2008 and it precipitated the Global Financial Crisis. And 8 million people lost their jobs almost overnight.<br /><br />The ‘recovery’ didn’t allocate resources, and still hasn’t. People still don’t have sufficient jobs. I know I know I know, the rosy figures touted about the unemployment figures improving, but they are neither accurate nor complete. You only have to look around your own neighborhoods: have the businesses returned?<br /><br />And pouring through the numbers on the Bureau of Labor Statistics site carefully doesn’t show improvements. Maybe for some sectors, but not for the general population in total. In fact, the Civilian labor force participation rate is still the lowest it’s been since Feb 1987. https://data.bls.gov/timeseries/LNS11300000<br /><br />Trump better get people jobs, but he doesn’t know how.MRWhttps://www.blogger.com/profile/13878920695841363553noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-36974809327539603922017-08-12T15:33:47.255-04:002017-08-12T15:33:47.255-04:00The article on Bloomberg you link to is unavailabl...The article on Bloomberg you link to is unavailable. Is Matthew Klein the person recommending killing banks? If so, who is he? What are his credentials? Or is he a Bloomberg journalist? If so, who is he quoting?MRWhttps://www.blogger.com/profile/13878920695841363553noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-79982373137595601062017-08-12T13:47:57.379-04:002017-08-12T13:47:57.379-04:00@Ralph, I disagree with much of Minsky but did app...@Ralph, I disagree with much of Minsky but did appreciate his comments on the importance of preserving the payments system during a crisis, and the notion of banks as deposit creators.<br /><br />I have not read your book so I can't comment on it. Banking is not my area of knowledge. Minsky seemed to dance around the banking issue and never actually endorsed a banking plan as far as I know.<br /><br />The problem with bailing out banks is not money, which the government can create with keystrokes, but that it rewards bad behavior and misallocation of resources. The whole point of capitalism is that it supposedly does a better job of allocating resources -- but that only works if we allow bad businesses to fail.Dan Lynchhttps://www.blogger.com/profile/11189866002273597534noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-60874831796245742742017-08-12T13:22:30.097-04:002017-08-12T13:22:30.097-04:00The link at the start of Dan Lynch’s first comment...The link at the start of Dan Lynch’s first comment above (“How would Minsky regulate banks?”) links to an article by Jan Kregel in which Kregel explains why Minsky eventually rejected what Kregel calls narrow banking and what most people call “full reserve” banking.<br /><br />Kregel’s article is largely nonsense. I dealt with some of the nonsense in my book a year or two ago. The book is available for free here (word-search for “Kregel”).<br /><br />https://www.yumpu.com/en/document/view/57025889/fulresbk179senttocrspto<br /><br />According to Kregel, Minsky rejected narrow banking because “nar-<br />row bank on this definition is not a bank…”. See Kregel’s last para. Well the simple answer to that is that advocates of “narrow/full reserve” banking are well aware that banks in their current form cease to exist under narrow banking and are replaced with very different entities. A Bloomberg article by Matthew Klein (link just below) is very explicit about that. In fact the title of the article is, “The best way to save banking is to kill it”. Can’t get clearer than that, can you?<br /><br />http://www.bloomberg.com/news/2013-03-27/the-best-way-to-save-banking-is-to-kill-it.html <br /><br />Seems that Kregel’s and Minsky’s reasons for rejecting narrow/full reserve are not too clever.<br /><br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-67233041099185204132017-08-12T12:22:38.400-04:002017-08-12T12:22:38.400-04:00I quite agree with this sentence of Dan Lynch'...I quite agree with this sentence of Dan Lynch's:<br /><br />"My suggestion is that we should have postal banking (tied to the central bank) for payments, savings, checking, and debit cards, but leave investment banking and lending to private banks."<br /><br />That actually comes to the same thing as "full reserve" or "100% reserve" banking long proposed by a long list of luminaries (half of them Nobel laureate economists)including: Milton Friedman, Lawrence Kotlikoff, Merton Miller, Maurice Allais, James Tobin, John Cochrane, and (in the 1930s) Irving Fisher.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-9985231978813097062017-08-12T11:26:19.701-04:002017-08-12T11:26:19.701-04:00‘Lender of last resort’ was designed to protect th...<i>‘Lender of last resort’ was designed to protect the public from bank runs and panics.</i> MRW<br /><br />Once individual citizens, their businesses, organizations, state and local governments, etc. may have inherently risk-free checking accounts at the central bank itself or equivalent (e.g. at the US Treasury) and all other privileges for the banks, credit unions, etc. have been abolished, then we shall have two payment systems:<br /><br />1) a risk-free, 100% liquid payment system consisting of individual citizen, business, organization, state and local governments, etc. checking accounts at the central bank itself or equivalent<br />AND<br />2) an at-risk, not-necessarily-liquid payment system consisting of checking accounts at the banks, credit unions, etc.<br /><br />1) is immune to bank runs since the liabilities of the central bank are not redeemable.<br /><br />2) would and SHOULD be susceptible to bank runs since its liabilities would be genuine liabilities wrt the non-bank private sector and not largely the sham they are today.Andrew Andersonhttps://www.blogger.com/profile/14296407661618321637noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-20484401463090561182017-08-12T10:13:32.431-04:002017-08-12T10:13:32.431-04:00Well it "must" because they will end up ...Well it "must" because they will end up with 100s of $b of excess munnie LOL!Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-14880973353105664342017-08-11T20:47:43.685-04:002017-08-11T20:47:43.685-04:00He never uses "must" anywhere in his art...He never uses "must" anywhere in his article. Probably an <i>American Banker</i> editor. Editors determine headlines, not the authors. Authors propose. But editors usually recast to either reflect the lede or the gist of the article.MRWhttps://www.blogger.com/profile/13878920695841363553noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-45546251670494758872017-08-11T19:59:34.350-04:002017-08-11T19:59:34.350-04:00Btw as far as the post I think the guy more or les...Btw as far as the post I think the guy more or less is onto things correctly but his use of "must" here is self serving ... Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-82621252707118290322017-08-11T19:56:48.420-04:002017-08-11T19:56:48.420-04:00MRW you have to remember the context of all of tha...MRW you have to remember the context of all of that was we were still using the metals...Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-18949659074106405702017-08-11T19:55:40.831-04:002017-08-11T19:55:40.831-04:00Which is not good...Which is not good...Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-80771226437800336812017-08-11T19:55:19.465-04:002017-08-11T19:55:19.465-04:00I have it as Milton Friedman's idea originally...I have it as Milton Friedman's idea originally ... Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-28964303472455214392017-08-11T18:22:50.380-04:002017-08-11T18:22:50.380-04:00When I find it, I'll let you know.When I find it, I'll let you know.MRWhttps://www.blogger.com/profile/13878920695841363553noreply@blogger.com