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“Denton, you mean GS was short selling the securities as an investment move yet still selling the securities to their clients and saying that those securities were a good buy”
That’s right snappy. Seems unethical. But not really. GS is a huge enterprise with many divisions. They also have huge clients. If a client was in the market for MBS, it’s up to them to provide them. It’s also part of hedging a position to keep your risk profile down, and GS did that better than anyone (and still does)
“snappy, the banks are seeing this as limiting their ability to take risks (which many would say is a good thing, others bad). Since risk taking is what makes many insitutitions stronger in the long run. If, IF they know what they’re doing.”
Well investment necessarily involves risk. I don’t know much (well, anything) about this, but that much I do know.
M4L – YES! that’s what she said – sponge cake with fruit cup type fruit!
well see that’s my plan – am trying to get my logo/website off the ground and then I want to come to the Brownstoner gathering with treat bags for everyone to see if you guys like them and can pass the word around…..
Yeah, that’s basically it Snappy. I think my second reply gives a better ‘critics’ argument.
Thinking about it some more, I think the default risk of smaller weaker investment banks is a bigger deal initially than smaller retail banks not lending (although both would likely happen).
So it’s materially increasing the risk of something really bad (another big slowdown) to hopefully offset the risk of something completely disastrous (investment bank losses bringing down retail banking).
etson, you’re forgetting the under the new regime, presumably, these institutions would never have reached the brink of disaster, albeit at the lost of less adventurous lending
“it is being received as a lurch towards stricter regulation but in a shaky economic atmosphere many are wondering if this is the right time.
I could be wrong.”
legion, I am all in favor of more regulation in the financial sector. But not this set.
“Denton, you mean GS was short selling the securities as an investment move yet still selling the securities to their clients and saying that those securities were a good buy”
That’s right snappy. Seems unethical. But not really. GS is a huge enterprise with many divisions. They also have huge clients. If a client was in the market for MBS, it’s up to them to provide them. It’s also part of hedging a position to keep your risk profile down, and GS did that better than anyone (and still does)
“snappy, the banks are seeing this as limiting their ability to take risks (which many would say is a good thing, others bad). Since risk taking is what makes many insitutitions stronger in the long run. If, IF they know what they’re doing.”
Well investment necessarily involves risk. I don’t know much (well, anything) about this, but that much I do know.
M4L – YES! that’s what she said – sponge cake with fruit cup type fruit!
well see that’s my plan – am trying to get my logo/website off the ground and then I want to come to the Brownstoner gathering with treat bags for everyone to see if you guys like them and can pass the word around…..
“legion, I am all in favor of more regulation in the financial sector. But not this set.”
Yes, of course, Mr. Sticky Fingers, but this is the issue the public understands: No More Too Big to Fail!
Yeah, that’s basically it Snappy. I think my second reply gives a better ‘critics’ argument.
Thinking about it some more, I think the default risk of smaller weaker investment banks is a bigger deal initially than smaller retail banks not lending (although both would likely happen).
So it’s materially increasing the risk of something really bad (another big slowdown) to hopefully offset the risk of something completely disastrous (investment bank losses bringing down retail banking).
etson, you’re forgetting the under the new regime, presumably, these institutions would never have reached the brink of disaster, albeit at the lost of less adventurous lending
time to welcome back mark to market on bank balance sheets
So is everyone here saying that the banks should not be split or else we could watch countless more banks fail and fold?
“it is being received as a lurch towards stricter regulation but in a shaky economic atmosphere many are wondering if this is the right time.
I could be wrong.”
legion, I am all in favor of more regulation in the financial sector. But not this set.