Comments on: FinSOB Fail: Elizabeth Warren Discounts Treasury’s Self-Assessment

By: readerOfTeaLeaves

readerOfTeaLeaves — Sun, 19 Apr 2009 02:54:28 +0000

What about the metrics themselves? Neither of them relies on data related to the stability of the actual banks. Instead, they rely on the perception of the banks by investors. And not just any investors, the tiny cabal of Wall Streeters who trade in credit default swaps and overnight interest rate swaps (OIS) in secret markets, known only to the insiders.

Oh, excuse me… it appears that revolting stench of burn hair is coming from the spontaneous ignition of my hair when I read this post.

Arggghhhhhhhhhhhhhhhhhhh!!

By: Kassandra

Kassandra — Sat, 18 Apr 2009 22:31:41 +0000

Thank you. I know we have to keep up with the pressure on Obama, but sometimes it’s very discouraging. and I DO get pretty scared of what we’re doing to this beautiful earth.

By: Synoia

Synoia — Sat, 18 Apr 2009 22:03:12 +0000

And she conflates cause and effect.

Specifically:

“This cult of risky behavior was not limited to financial institutions. U.S. households enthusiastically leveraged themselves to the hilt.”

No lady. They were marketed to. Marketing is effective. Without the actions by the lenders, these people would not have been stripped of their equity. The lenders were more interested in fees than ensuring the borrowers had the ability to repay the loans.

A breach of the lenders primary fiduciary responsibility.

It is not that hese people don’t get it. It’s that the don’t want to get it, becuase that requires assigning blame, and pointing fingers at themselves.

By: Synoia

Synoia — Sat, 18 Apr 2009 21:58:03 +0000

Are we to believe the published results to the stres tests was to pick a few statistics that prove the case the the banks are ok?

That’s Constructive Fraud.

By: i4u2bi

i4u2bi — Sat, 18 Apr 2009 21:48:22 +0000

Any so called investments on margin no matter what they are called will bring the same results..pain and suffering for the populace.

By: earlofhuntingdon

earlofhuntingdon — Sat, 18 Apr 2009 20:43:40 +0000

Not getting it seems to be key to staying in power. Otherwise, by admitting a problem you volunteer (or become responsible) to fix it. Kind of like musical chairs: admit the real problems and you stop the music, leaving only yourself without a chair.

That all these well-informed top players, all part of the problem, fail to “get it” in tandem, suggests the metaphor of “concurrent” (not monopoly) pricing as practiced by once-regulated airlines, by Rockefeller’s oil companies and Vanderbilt’s railways.

By: masaccio

masaccio — Sat, 18 Apr 2009 19:52:16 +0000

Thanks!

By: masaccio

masaccio — Sat, 18 Apr 2009 19:51:54 +0000

That $600tn figure includes all kinds of derivatives, including interest rate swaps which are a very large part, along with all kinds of other stuff. Not all of it is toxic.

By: masaccio

masaccio — Sat, 18 Apr 2009 19:49:44 +0000

Take a look at the letter from Treasury attached to the Warren Report, and you will see that these are their metrics. The GAO uses the TED spread, the difference between the interest rate on three month Treasury Bills and three month LIBOR.

By: masaccio

masaccio — Sat, 18 Apr 2009 19:46:45 +0000

Don’t worry. We are going to have to raise taxes, primarily on the richest part of the population. Eventually, we’ll get back in balance. Anyway, this is one of the things we can’t change we shouldn’t let it get to us.

From my perspective, we need to understand what happened and what is being done so we can push in the right direction.