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g10, she’s probably talking about your typical sponge cake with some fruits in btwn the layers or on top of the cake. you’ll see what I mean if you ever visit a bakery in chinatown.
btw, I hold your baking skillz pretty high and would love to get some brownie treats the next time you show up at the gatherings
snappy, it’s not completely clear until all the details are out.
But the main thing he’s doing is saying banks that take deposits cannot trade for themselves. So iow, Bank of America, which bought Merill, or JP Morgan (which bought Bear Stearns) both at the behest of the guvment, will no be allowed to trade for themselves. They will not be allowed to buy 100 shares of IBM. Supposedly, this will allow them to better serve their customer’s best interests.
Most likely this is based on the news that GS had sold short certain mortgage backed securities (which means they expected them to go down) while at the same time selling them to other clients. But that’s what investment banks do.
not a finance guy but from what I understand, the President is proposing to limit a financial insitution’s (like Goldman Sachs) ability to do other things outside of the institution’s given business thatmight be construed as solely for the benefit of the institution or in conflict with the primary business.
So if Bank of America’s business is lending and mortgages, it could not package and start selling collataralized debt obligations (high risk morgtgages for instance)on the side.
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.
I’ll have a go, Snappy. Anyone feel free to add / correct:
The proposal is aimed at splitting the activities of investment banks, with the objective of reducing the risk of one division blowing up and ‘infecting’ the whole bank (e.g. bad decisions in Citi’s investment bank causing it’s Main Street retail bank, which stand alone was healthy, to be at risk).
Critics argue, however, that it would lead to smaller, weaker institutions overall, and a less efficient market. They would have less propensity to lend and the economic recovery would be much weaker (or we will double dip) because there would be a higher cost of capital and less capital formation.
am with Snappy – HUH? what’s Obamarama doing to the banks?
DH – highlarious!
M4L – well am busy doing my side gig of baking goods as I have quite the reputation brewing and I am trying to do it on the side. My husband’s coworker is chinese and wants me to bake some treats to send off as favors at the end of her son’s Bday party, so she mentioned some Chinese cakes have fruit in them, so I was going to try my hand at a chinese cake! –
I’m sure Obama right now is getting a bunch of “What the f*&ck are you trying to do?” from people like Summers and anyone else with half a sense for how things actually work.
He’s come out with this to take the focus off the disaster called healthcare.
g10, she’s probably talking about your typical sponge cake with some fruits in btwn the layers or on top of the cake. you’ll see what I mean if you ever visit a bakery in chinatown.
btw, I hold your baking skillz pretty high and would love to get some brownie treats the next time you show up at the gatherings
snappy, it’s not completely clear until all the details are out.
But the main thing he’s doing is saying banks that take deposits cannot trade for themselves. So iow, Bank of America, which bought Merill, or JP Morgan (which bought Bear Stearns) both at the behest of the guvment, will no be allowed to trade for themselves. They will not be allowed to buy 100 shares of IBM. Supposedly, this will allow them to better serve their customer’s best interests.
Most likely this is based on the news that GS had sold short certain mortgage backed securities (which means they expected them to go down) while at the same time selling them to other clients. But that’s what investment banks do.
hi snappy,
not a finance guy but from what I understand, the President is proposing to limit a financial insitution’s (like Goldman Sachs) ability to do other things outside of the institution’s given business thatmight be construed as solely for the benefit of the institution or in conflict with the primary business.
So if Bank of America’s business is lending and mortgages, it could not package and start selling collataralized debt obligations (high risk morgtgages for instance)on the side.
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.
I’ll have a go, Snappy. Anyone feel free to add / correct:
The proposal is aimed at splitting the activities of investment banks, with the objective of reducing the risk of one division blowing up and ‘infecting’ the whole bank (e.g. bad decisions in Citi’s investment bank causing it’s Main Street retail bank, which stand alone was healthy, to be at risk).
Critics argue, however, that it would lead to smaller, weaker institutions overall, and a less efficient market. They would have less propensity to lend and the economic recovery would be much weaker (or we will double dip) because there would be a higher cost of capital and less capital formation.
could hedge with a cameltoe collar
am with Snappy – HUH? what’s Obamarama doing to the banks?
DH – highlarious!
M4L – well am busy doing my side gig of baking goods as I have quite the reputation brewing and I am trying to do it on the side. My husband’s coworker is chinese and wants me to bake some treats to send off as favors at the end of her son’s Bday party, so she mentioned some Chinese cakes have fruit in them, so I was going to try my hand at a chinese cake! –
The price of CDOs would rise proportionately to the price of MBSs.
You’d never be able to put on a straddle or a butterfly and therefore Goldman won’t make any money on these so there won’t be an efficient market.
haha broke-d!!
I’m sure Obama right now is getting a bunch of “What the f*&ck are you trying to do?” from people like Summers and anyone else with half a sense for how things actually work.
He’s come out with this to take the focus off the disaster called healthcare.