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Author: WendyBG Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 461106  
Subject: FDIC, small savers & Cyprus Date: 3/26/2013 1:56 PM
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The Federal Deposit Insurance Corporation (FDIC) insures participating banks' depositors up to $250,000 per account. Each depositor may have more than one account (e.g. IRA accounts are insured in addition to savings accounts).

http://www.fdic.gov/

The banks pay premiums into the FDIC insurance fund. While this fund is backed up by the U.S. government, the fund has always been adequate to shut down insolvent banks, so government backup has never been drawn upon.

The FDIC assesses insurance premiums from the banks based on bank risk. Riskier banks pay higher premiums.

http://www.fdic.gov/deposit/insurance/assessments/risk.html

The FDIC creates reports on problem or troubled banks in the aggregate. They do not make the details of this list publicly available. A bank's financial statement does not break out the FDIC premium, so it's impossible to tell what risk category a bank is in from its premiums.

Some commentators (including mungofitch and Mish) think that FDIC insurance should be abolished, placing the onus of judging a bank's solvency and risk on the children, workers and elders who trust their savings to the bank.

In fact, it is impossible for even a sophisticated investor to judge the solvency and risk of a bank from its public financial statements, especially since 2008 when the accounting reporting rules were changed to allow "mark to fantasy."

Only the FDIC, with inside information, knows the real story of each bank's risk...and they aren't telling.

The experience of the Great Depression shows that it is essential for small savers to trust the security of their hard-earned savings. This confidence is what FDIC insurance preserves.

I learned from my grandparents and parents to never exceed the FDIC insurance limit at any bank. Always split savings accounts.

The banks in Cyprus insure small savers, similar to the FDIC. I am not sure whether the premiums are paid by the banks or by the government, because I can't access their "small print," but I suspect that it is by the banks. It really doesn't matter much.

The key is the stupidity of the ECB and Cyprus negotiations attempting to drain small savers' accounts -- an attempt that undermined the confidence in the system, even though they dropped the attempt.

The FDIC and other small savers' insurance is not meant, and was NEVER meant, to protect large depositors. Before bank insurance existed, all depositors, bank bondholders and shareholders expected to be wiped out completely if a bank failed.

The whole point of small deposit insurance is that the average kid, mom and pop are not literate and numerate enough to analyze the risk of a bank. Rich people (large depositors and investors) presumably can hire accountants to research the banks' risk before deciding to commit their money.

The screaming, gnashing of teeth and tearing of hair from large depositors (including foreigners), bondholders and shareholders at the failure of the Cyprus banks should be met with the legal reality: too fu@kin' bad, but that was the deal you agreed to.

As warrl pointed out in a recent post, the blame lies with the 2008 bailout of the U.S. banks (and also the GSEs, Fannie Mae and Freddie Mac, whose trillions of dollars of private bondholders were bailed out) expressly contrary to their written rules!

Shiela Bair has described the process in her book, "Bull by the Horns."
http://www.amazon.com/Bull-Horns-Fighting-Street-Itself/dp/1...

TPTB -- bankers of all nations -- should issue a joint statement that ALL CONTRACTS WILL BE HONORED!

Small, insured savers will not be expropriated. Depositors will be insured up to the limit of deposit insurance, but not more. Shareholders and bondholders will lose in the order of seniority, as determined by law.

Only such a declaration will restore the confidence of Cyprus and other nations whose banks are at risk (especially Italy and Spain).

Unfortunately, this won't happen because of the influence-mongering so prevalent today.

Wendy
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Author: tim443 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 418949 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/26/2013 2:38 PM
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The screaming, gnashing of teeth and tearing of hair from large depositors (including foreigners), bondholders and shareholders at the failure of the Cyprus banks should be met with the legal reality: too fu@kin' bad, but that was the deal you agreed to.

As warrl pointed out in a recent post, the blame lies with the 2008 bailout of the U.S. banks (and also the GSEs, Fannie Mae and Freddie Mac, whose trillions of dollars of private bondholders were bailed out) expressly contrary to their written rules!


Wendy

I'm really not sure how pertinent it is but it would seem our regulators have added another turn to the screws on our "big six" (we only have eight publicly traded banks).

In another article the regulators reminded them that they are not too big to fail.

A note on the threat to small savers in Cyprus, that was an offer made by the Cypriot government not the ECB, the intention was obviously to strike fear but clearly was too nuclear to be allowed.

Tim




http://m.theglobeandmail.com/globe-investor/canadas-big-six-...

Canada's Big Six banks deemed 'systemically important'
TARA PERKINS

The Globe and Mail

Last updated Tuesday, Mar. 26 2013, 2:16 PM EDT

Canada’s banking regulator has singled out the country’s six largest banks as being so vital to the nation’s economy that they will have to carry higher capital levels than their peers.

The move, which was widely expected and discussed in last week’s federal budget, is part of the continuing efforts among global regulators to protect the financial system in the event of another banking crisis.

Big banks on track to meet Basel capital rules ahead of time
Ottawa to explore more competition in banking sector
EU proposes tougher bankers' bonus curbs
The Office of the Superintendent of Financial Institutions said Tuesday morning that it has identified Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada and Toronto-Dominion Bank as “domestic systemically important banks,” or so-called D-SIBS.

As such, they will be forced to comply with a 1 per cent surcharge to their risk-weighted capital by the start of 2016.


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Author: warrl Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 418961 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/26/2013 5:55 PM
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The key is the stupidity of the ECB and Cyprus negotiations attempting to drain small savers' accounts -- an attempt that undermined the confidence in the system, even though they dropped the attempt

That isn't the root stupidity. It's part of the stupidity, but not the root stupidity.

Something closer to the root stupidity is the massive precedent, by both FDIC and ECB and I think also BOJ, of "We only insure accounts up to X amount of money - oh wait, that'll hurt large depositors in this failing bank? OK, we'll cover larger deposits too, no limit, even though we said earlier that we wouldn't and we haven't been collecting the premiums necessary to support even the insurance we said we were providing."

What may actually be part of the root stupidity is "We charge insurance premiums of X% of insured deposits. No, we aren't interested in what level of risk the bank is taking with the deposits we are covering." (FDIC revised this, under orders from Congress - but only into a few categories, some of which are excessively broad.)

Another part of the root stupidity, in the US, is "No single bank may have more than X% of insured deposits. The FDIC reserve fund is not to exceed Y% of insured deposits. Oh, by the way, X is somewhere around 10 times Y."

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Author: Goofyhoofy Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 418977 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/26/2013 10:49 PM
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As warrl pointed out in a recent post, the blame lies with the 2008 bailout of the U.S. banks (and also the GSEs, Fannie Mae and Freddie Mac, whose trillions of dollars of private bondholders were bailed out) expressly contrary to their written rules!

This strikes me as about as logical as complaining that you didn't get to collect on your life insurance policy because your bullet proof vest stopped you from getting killed.

The "blame" is what stopped the economy from descending into a full blown 1929 style panic which would have overwhelmed the system, all systems, including the FDIC (which would have had to have been bailed out by the government anyway.)

There is a strain, in some a particularly strong strain of masochism which says "You are going to suffer, so you might as well suffer now." Then they advocate bleeding the patient, or flogging, or some other remedy which extracts a terrible cruelty, and somehow that is supposed to make everything better - even though it doesn't. It's most well captured in Andrew Mellon's famous quote to "liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate ... it will purge the rottenness out of the system."

But we can find echoes of it today, and for no reason that I can fathom. "We have to dismantle Social Security today, because we might have to make changes in it tomorrow" is one often heard. Another is "let the too big to fail banks fail", as though financial armageddon will be good for the soul. Baloney.

We have a highly interdependent economy, and a catastrophic failure in one sector will cascade through all - as we saw during the Great Depression, and as we almost saw from the cliffside in 2008. That, of course, argues for making no single entity capable of destroying its entire sector, but somehow some people seem to think the opposite: that destroying that sector will somehow be good for people, and that things will rebuild in a better, cleaner, purer way.

That, of course, is poppycock, as silly as telling people after a great fire to rebuild the same houses out of the same wood as close together as before and hoping there won't be another Great Chicago Fire, or allowing food manufacturers to decide for themselves what is proper (as China does) even after contaminants invade multiple sectors of the food chain.

No, the answer to disaster is not to let the disaster just happen and happen again and happen again. The answer is to figure out what went wrong and then avoid doing the same thing over and over and over. We have not learned that, apparently.

Self-flagellation accomplishes nothing, except to make a certain vocal segment pleased that they have convinced others to join them in their pain.
 


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Author: notehound Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 418978 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/26/2013 11:00 PM
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The answer is to figure out what went wrong and then avoid doing the same thing over and over and over. We have not learned that, apparently.

Like allowing derivatives to continue to grow unabated, continuing to ignore counterparty risks, encouraging deceitful and fictitious accounting practices, hiding wrongdoing, protecting wrongdoers, selectively enforcing what little there is left of the rule of law, and allowing "systemically important" financial institutions to grow even bigger - making them ever more systemically important until they overpower every other component in the precious "system," even - and especially - the regulators and the state itself.

Sorry for the run-on sentence, but you get the drift.

You're right once again, Goofy. We have not learned anything.*

*(Well, we've learned one thing: that the bankers are our masters.)

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Author: tim443 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 418979 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/26/2013 11:06 PM
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There is a strain, in some a particularly strong strain of masochism which says "You are going to suffer, so you might as well suffer now." Then they advocate bleeding the patient, or flogging, or some other remedy which extracts a terrible cruelty, .... "liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate ... it will purge the rottenness out of the system."

..."We have to dismantle Social Security today,... "let the too big to fail banks fail", as though financial armageddon will be good for the soul.




Sounds like the Puritan ancestors thing if you ask me?

Much better to flog the bankers regularly along with a warning that if they fork up the flogging will become keel hauling. }};-D


**** absolutely not signed ****

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Author: putnid Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 418980 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/26/2013 11:34 PM
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Well, we've learned one thing: that the bankers are our masters. - notehound

I've said it before, but I thought I'd say it again: You and I have different views on a number of matters BUT when it comes to matters of the scrofulous "Financial Industry" you and I are of like mind.

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Author: xLife Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 418981 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 1:39 AM
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Goofy,

I know you're a fan of the bank bailout, but you really ought to read Bailout. There was not only one way to prevent the financial system from collapsing. The bailout did not have to reward banks for making crazy-bad decisions in order to save them. It did not have to make TBTF banks bigger. It didn't have to abet and even encourage continued fraud and corruption, enriching Wall Street at enormous taxpayers expense and screwing over struggling homeowners.

You're presenting a false choice between the bailout as it happened and the End of the World As We Know It. One can oppose the bailout and not be in favor of letting the system blow up or melt down or whatever. The Paulson-Geithner way was not the only way.

Cheers,

Felix

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Author: tim443 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 418986 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 8:06 AM
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Well, we've learned one thing: that the bankers are our masters. - notehound

I've said it before, but I thought I'd say it again: You and I have different views on a number of matters BUT when it comes to matters of the scrofulous "Financial Industry" you and I are of like mind.



Speak for yourselves guys. }};-D

I'm sort of hoping our Finance Minister will be available after the next election should y'all be interested... no such luck with the BoC governor as the Brits beat y'all to him. In truth they have an easy job as our banking system has always pretty well towed the government line.

While I'm sure the free market capitalist and Jamie D who feel regular financial crashes are normal would be horrified but I sort of like banking being a bit of a utility.


Any <Just because you can reproduce doesn’t mean you should> mouse

http://ca.finance.yahoo.com/news/bank-montreal-returning-con...

Bank of Montreal returning controversial mortgage rate to previous level

By The Canadian Press | The Canadian Press – 13 hours ago

TORONTO - Bank of Montreal will end a controversial low mortgage rate at the end of this week, when the limited-time offer runs out.

The bank (TSX:BMO.TO - News) says the posted rate for a fixed five-year mortgage will return to 3.09 per cent, where it was before BMO lowered it to 2.99 per cent.

Finance Minister Jim Flaherty had called Bank of Montreal to express his disapproval of its decision to offer the special low rate starting on March 4.



Note: While I've often mentioned that between elections the Canuck government runs like a dictatorship... occasionally there are minor rebellions easily crushed.

http://ca.news.yahoo.com/blogs/canada-politics/conservative-...

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Author: notehound Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 418990 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 8:34 AM
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I sort of like banking being a bit of a utility.

Works for me.

;-)

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Author: Goofyhoofy Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 418996 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 8:59 AM
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I know you're a fan of the bank bailout, but you really ought to read Bailout. There was not only one way to prevent the financial system from collapsing. The bailout did not have to reward banks for making crazy-bad decisions in order to save them. It did not have to make TBTF banks bigger. It didn't have to abet and even encourage continued fraud and corruption, enriching Wall Street at enormous taxpayers expense and screwing over struggling homeowners.
You're presenting a false choice between the bailout as it happened and the End of the World As We Know It. One can oppose the bailout and not be in favor of letting the system blow up or melt down or whatever. The Paulson-Geithner way was not the only way.


Oh heavens I know it was not "the only way." It was, however, a way that worked without destroying the world.

I am appalled that the financial goliaths ended up as they did, with these big banks even bigger, and that the collapse was not used as an excuse to make fundamental changes to the system, which, I fear, has just as large systemic risks as previously, just in different ways. No, I am not happy for much except the outcome, which is to say, NOT 1929.

As this is METAR I will try to temper the remarks only by saying that some political philosophy which dominates much thought these days wouldn't have, and still won't abide such changes, they being counter to the "market is always perfect and will fix it" mantra. The strain that says government is too big everywhere should have gotten a big wake up call from the repeal of Glass Steagall, and yet they haven't. They decried the threat of intrusive passenger searches for terrorism in airplanes until tall buildings fell down, and they tell me to "shop around" for health insurance while I am having a heart attack or find a plan that works for me even though no company will accept me - ignoring the hard data that we have the most expensive system which delivers mediocre results in aggregate.

And I'm supposed to be unhappy that the financial system still functions, that the bailout was successful in the end game, even though I do not like much of what happened to make it so? No, I will be happy that my father's portfolio did not sink to zero and destitute him, that I still have money for retirement, that my neighbors are mostly still in their houses, unlike like the farmers if the 1930's who lost theirs.

And I will hope against hope that the Elizabeth Warrens and a few other hardy souls, along with the stupidity of the Jamie Dimons and a few more "near misses" will bring about the changes that should have (I'm not sure could have) been made back in 2008-2009.

Catastrophic disasters - of buildings, ships, airliners, or other systems - are rarely the result of a single factor. It usually takes a cascade of things, all happening in sequence to bring about the final terrible result. I have hope that we won't enter the secret combination to foment such disaster until we have managed to eliminate one or more of the defective gears that make it possible. And TBTF would be first on my list.

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Author: notehound Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 418998 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 9:04 AM
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And I will hope against hope that the Elizabeth Warrens and a few other hardy souls, along with the stupidity of the Jamie Dimons and a few more "near misses" will bring about the changes that should have (I'm not sure could have) been made back in 2008-2009... And TBTF would be first on my list.

And there you and I are in perfect agreement.

:-)

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Author: xLife Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419010 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 9:38 AM
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As this is METAR I will try to temper the remarks only by saying that some political philosophy which dominates much thought these days wouldn't have, and still won't abide such changes, they being counter to the "market is always perfect and will fix it" mantra. The strain that says government is too big everywhere should have gotten a big wake up call from the repeal of Glass Steagall, and yet they haven't. They decried the threat of intrusive passenger searches for terrorism in airplanes until tall buildings fell down, and they tell me to "shop around" for health insurance while I am having a heart attack or find a plan that works for me even though no company will accept me - ignoring the hard data that we have the most expensive system which delivers mediocre results in aggregate.

I agree that that's idiocy. But again, my point is that the choice wasn't between "do nothing, let the market fix it" and "shovel money at crooks." Did shoveling money at crooks "work," i.e. prevent a total economic collapse? Yes, obviously. Or maybe. It may have just kicked the can down the road a bit. Postponing catastrophe to buy time to fix things is a good thing... as long as you use the time to fix things. I think we're not, that the Wall Street has "captured" the government, and that we've bought time for banisters to further enrich themselves. Hope I'm wrong.

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Author: notehound Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419016 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 9:52 AM
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Postponing catastrophe to buy time to fix things is a good thing... as long as you use the time to fix things. I think we're not, that the Wall Street has "captured" the government...

Spot-on, xLife.

And therein lies the problem with trying to circumvent the risk-based, price-discovery rules of capitalism.

The more you meddle, the more you have to meddle - and the most efficient way to increase your power to meddle is to capture the meddlers.

Remember... all this started with clever Wall Street "slicers-and-dicers" of illiquid assets playing "hide the risk." The government, the Fed and the accountants have aided and abetted them every step of the way.

Nothing has been fixed during this postponement of catastrophe except to give the Wall Street perpetrators time to solidify their own ill-gotten gains.

:-o

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Author: xLife Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419019 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 10:21 AM
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Remember... all this started with clever Wall Street "slicers-and-dicers" of illiquid assets playing "hide the risk."

The usual name for that is "fraud."

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Author: Goofyhoofy Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419021 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 10:26 AM
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The more you meddle, the more you have to meddle - and the most efficient way to increase your power to meddle is to capture the meddlers.

Simply not true. It's a tenet of religion, but that doesn't make it accurate.

Glass Steagall worked fine for 60 years, was never modified, even as the financial system changed so dramatically. Then the champions of the free market decided that there really wasn't any risk, after all, and eliminated it. They didn't "have to" meddle, they chose to.

The FDIC was instituted in 1933, and to my knowledge has had no substantive changes for 80 years. (Yes, the limits have been changed, and increased vs. inflation, although not so much vs. personal wealth in the country, and yes, there was a temporary liquidity program in 2008, but I view those as minor, and I am not one to say "Do nothing", as is evident from my postings, I suppose.)

The basic SEC guidelines set forth in 1934 are pretty good, not perfect as high rollers have found ways to subvert them, but still pretty good, historically speaking.

Basic anti-trust laws still perform a service, even if governments become too timid to enforce them at times.

None of these fell to earth perfect in every respect, never to be amended or updated, doo dah, doo dah, but on the whole they've performed pretty well across the past century, at least until the new mantra of "government mustn't ever do anything" took hold.
 


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Author: notehound Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419022 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 10:42 AM
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Glass Steagall worked fine for 60 years, was never modified, even as the financial system changed so dramatically. Then the champions of the free market decided that there really wasn't any risk, after all, and eliminated it. They didn't "have to" meddle, they chose to.

...on the whole they've performed pretty well across the past century, at least until the new mantra of "government mustn't ever do anything" took hold.


My expression failed to convey my intended meaning. Sorry. I agree with you that it was the Wall Street manipulators of the regulated market (the "hide the risk" fraudsters) who are the champions of meddling.

We're back to thinks I talked about when I first started to post on this board in 2007. It was a gross and utterly destructive mistake to repeal Glass-Steagall and then to compound that mistake by passing the Commodity Futures Modernization Act of 2000.

Those two monstrous mistakes could have and should have been undone in the 5 years since it became clear that the game of "banksters can do anything they want" and its appurtenant "hide the risk" game of deceiving the markets was leading us to catastrophe.

Nothing has been done because those who have the power to undo said mistakes are property of the banksters.

I am not a "champion of the free market" that eschews regulation.

I am a champion of the free market price discovery mechanism that punishes some and rewards others based on fully disclosed risks and fair, accurate and transparent accounting.

To have that sort of free market, rules must be in force - and enforced.

We don't have that because the rulemakers have been captured by the manipulators.

Anyway, we're closer to being in agreement than you might think, once you cut through my often-times outsize rhetoric.

:-)

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Author: xLife Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419026 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 11:00 AM
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We don't have that because the rulemakers have been captured by the manipulators.

At risk of sounding like a broken record and touting a book thats been touted here already... if you have any doubt about "regulatory capture" by Wall Street, read Barofsky's Bailout.

I knew it was bad. But Treasury and the SEC aren't just "easy" on Wall Street, they're totally complicit in abetting fraud and massive theft. It's as if the drug cartels were able to stuff DOJ and DEA with their own hand-picked lawyers and cops. Except it's worse because the sums of money stolen are truly astronomical. Drug cartels, at least, sell a product people want to buy.

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Author: EddieLuck Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419029 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 12:15 PM
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<<But Treasury and the SEC aren't just "easy" on Wall Street, they're totally complicit in abetting fraud and massive theft. It's as if the drug cartels were able to stuff DOJ and DEA with their own hand-picked lawyers and cops.>>

They obviously are able to do so. Remember when the media caught the feds supplying the drug cartels with large numbers of automatic weapons, and the feds defended themselves by saying it was some sort of (totally unbelievable) scheme called "Fast and Furious" which was set up "to find out where the guns went" without actually tracking them somehow?

The obvious true explanation is that the feds were just supplying hard-to-get modern guns to their associates in the cartels in exchange for money, and the weird official explanation was just made up.

I blame government brainwashing/education for the ridiculous degree of naive trust in government that currently exists in the Land of the Free, a nation conceived in total distrust of government and equipped with a Constitution that is specifically designed to protect us from our government by limiting their activities to a bare minimum in order to minimize the damage they can do.

Ed.

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Author: xLife Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419033 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 12:55 PM
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<<But Treasury and the SEC aren't just "easy" on Wall Street, they're totally complicit in abetting fraud and massive theft. It's as if the drug cartels were able to stuff DOJ and DEA with their own hand-picked lawyers and cops.>>
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They obviously are able to do so. Remember when the media caught the feds supplying the drug cartels with large numbers of automatic weapons...


Nope. And that's not what happened. The Feds didn't supply the cartels with weapons. They allowed straw buyers to purchase weapons without interdiction, hoping to trace them to higher ups, sort of like how sometimes they don't arrest small-fry "mules" carrying drugs and instead follow them to bigger fish. Dumb idea with cross-border weapons smuggling, though. Backfired big time.


The obvious true explanation is that the feds were just supplying hard-to-get modern guns to their associates in the cartels in exchange for money, and the weird official explanation was just made up.


That's neither obvious nor true. The guns aren't hard to get. But thanks for sharing.

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Author: tim443 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419045 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 2:32 PM
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and equipped with a Constitution that is specifically designed to protect us from our government by limiting their activities to a bare minimum in order to minimize the damage they can do.


er.... you don't think perhaps that might be part of the problem with trying to regulate the bankers?


**** absolutely not signed ****

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Author: steve203 Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419047 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 2:40 PM
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er.... you don't think perhaps that might be part of the problem with trying to regulate the bankers?

Given the rapid consolidation in the industry, banking is interstate commerce, which is explicitly under Federal regulation....it's just that the Feds, "don't wanna". Leave it to your imagination what is motivating the Feds to "don't wanna".

Article I, Section 8, Clause 3:[3]

[The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;


http://en.wikipedia.org/wiki/Commerce_Clause

Steve

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Author: warrl Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419055 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 4:40 PM
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<i.Postponing catastrophe to buy time to fix things is a good thing... as long as you use the time to fix things. I think we're not, that the Wall Street has "captured" the government...

Spot-on, xLife.

And therein lies the problem with trying to circumvent the risk-based, price-discovery rules of capitalism.</i.

AND the problem with thinking that government will (possibly even "can") fix things.

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Author: Volucris Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419062 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 5:30 PM
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and also the GSEs, Fannie Mae and Freddie Mac, whose trillions of dollars of private bondholders were bailed out

And thank goodness for that. My kids get to go to college because of the Fannie Mae bail out. Letting the bond holders take a haircut sounds great until you are a bond holder. Pure selfishness I suppose, but there it is.

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Author: notehound Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419066 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 6:18 PM
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And thank goodness for that. My kids get to go to college because of the Fannie Mae bail out. Letting the bond holders take a haircut sounds great until you are a bond holder.

I'm glad to know someone besides cronies of Congress benefited from the Fannie Mae bailout.

Like SonnyPage, you were one of the ordinary people who were able at least reap a tangible return from your tax dollars poured into banks and the GSEs. (SonnyPage got a short sale with no liability for the deficiency.)

Just don't let it happen again.

;-)

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Author: TheCrusader Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419067 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 7:44 PM
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The question here is Why?

Why did the EU with the Germans signal that depositors will have to pay to bail out failed banks? Thats the real question.

Cyprus is only a little country and it could have been covered and yet the powers that be choose this approach.

This is a message, your money is not safe in banks, depositors will end up paying for if the bank fails. The simple reality is that virtually every bank and government in Europe is broke and it is the prudent individual who is going to pay for it.

If you had substantial monies deposited in a European Bank, would you leave it there, or would you transfer it to some other bank in the US, Asia or Aust etc.

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Author: desertdaveataol Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419070 of 461106
Subject: Re: FDIC, small savers & Cyprus Date: 3/27/2013 8:27 PM
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Why did the EU with the Germans signal that depositors will have to pay to bail out failed banks?

Because the Germans didn't want to pay with their money.

If you begrudge them that then maybe you ought to send them some of your money.

;-)

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