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View Diary: Naked Capitalism: "...Democrat Bank Stooges Launch Bills to Permit Bailouts, Deregulate Derivatives" (109 comments)

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  •  Also either Yves is stupid or thinks her readers (3+ / 0-)

    are with this remark:

    Remember Lehman? When the investment bank failed, unsecured creditors (and remember, depositors are unsecured creditors) got eight cents on the dollar. One big reason was that derivatives counterparties require collateral for any exposures, meaning they are secured creditors.
    Lehman had no depositors as they were not a deposit (commercial) bank.

    Had actual depositors existed at Lehman they would have been first in line.

    "The way to see by faith is to shut the eye of reason." - Thomas Paine

    by shrike on Wed Mar 20, 2013 at 04:47:01 PM PDT

    •  Yeah, first in line for 8 cents on the dollar. (11+ / 0-)

      Yves wasn't saying that Lehman had depositors, shrike.  She was emphasizing what depositors of BofA stand to lose as unsecured creditors now that BofA, N.A. holds most of the BofA derivatives.

      •  Ridiculous. Depositors are FDIC insured here. (3+ / 1-)
        Recommended by:
        virginislandsguy, johnny wurster, kefauver
        Hidden by:
        snoopydawg

        She is scare-mongering her feeble readers.

        "The way to see by faith is to shut the eye of reason." - Thomas Paine

        by shrike on Wed Mar 20, 2013 at 05:34:14 PM PDT

        [ Parent ]

        •  Cypriots are supposedly insured, too, (3+ / 0-)

          under the EU constitution.

          Bank of America, N.A. is ranked second in the U.S. in terms of total deposits, shrike.  At the end of 2012, that figure was $1.2 trillion dollars.  Do you honestly think FDIC can cover that?

          •  Last I checked the FDIC had $50 million or so. (3+ / 0-)

            But that is irrelevant.  Bank of America has its capital ratio monitored daily, has passed numerous stress tests, and has a large cash position on reserve at the Fed.

            Yves has been wrong on Bank of America for years.  She talks about their HELOC exposure as fatal since 2009.

            Buffett put $5 billion in BAC and he can read a balance sheet like no other.

            In fact it is sad to mention Buffett here with a rank amateur like Yves Smith.

            "The way to see by faith is to shut the eye of reason." - Thomas Paine

            by shrike on Wed Mar 20, 2013 at 06:02:00 PM PDT

            [ Parent ]

            •  how do you know Buffet hasn't hedged? (2+ / 0-)
              Recommended by:
              lostinamerica, basquebob
              $5 billion in BAC
              do you know for a fact that he did not ?

              The "extreme wing" of the Democratic Party is the wing that is hell-bent on protecting the banks and credit card companies. ~ Kos

              by ozsea1 on Wed Mar 20, 2013 at 07:23:59 PM PDT

              [ Parent ]

            •  You know who else passed the stress tests (3+ / 0-)
              Recommended by:
              Azazello, RageKage, dharmafarmer

              with "flying colors" a year or so ago? The two largest Cypriot banks, the very same two that Schäuble said yesterday are bankrupt. You know why the bank stocks remain so depressed here and elsewhere compared to their pre-2009 valuations? Because no one, in the markets or elsewhere, believes for a second the data that is being shown in public is accurate, except a small cadre of true-believers.

              Perhaps you meant $50 billion which for the $10.34 trillion (as of 2012) in insured deposits in the U.S. is grossly inadequate and many experts think so. The reserves should be $139.6 billion according to FDIC rules and $200.64 billion according to the 2012 target based on $10.34 trillion total insured deposits. In 2010, 157 banks with approximately $92 billion in total assets failed. (source SNL Financial).

              I don't know where you got the $50 million figure from, but as you can see $50 billion, with a b, is not even close to what is needed. By 1995 the S&L losses where estimated to be $97 billion. (U.S. General Accounting Office estimated cost of the crisis to around USD $160.1 billion, about $124.6 billion of which was directly paid for by the U.S. government from 1986 to 1996.[1] That figure does not include thrift insurance funds used before 1986 or after 1996. It also does not include state run thrift insurance funds or state bailouts. sources http://en.wikipedia.org/... ) So I don't know how you can draw so much comfort from $50 million or $50 billion, and $50 billion is a thousand times more than $50 million, something that sadly and surprisingly is not so apparent to a majority of the citizenry.

              Keep trusting what they tell you about the capital ratios of BoA or any of the TBTF at your own peril. Particularly on the week after in a Senate hearing became abundantly clear that Jamie Dimon, "the best bank CEO in the world", lied to the markets and the regulators. Some are blind because they choose to be blind.

              "The great enemy of the truth is very often not the lie -- deliberate, contrived and dishonest, but the myth, persistent, persuasive, and unrealistic. Belief in myths allows the comfort of opinion without the discomfort of thought." -John F. Kennedy

              by basquebob on Wed Mar 20, 2013 at 08:39:29 PM PDT

              [ Parent ]

              •  I last looked at the FDIC balance in 2009 (2+ / 0-)
                Recommended by:
                virginislandsguy, johnny wurster
                The Deposit Insurance Fund (DIF) balance decreased by $18.6 billion (180%) to negative $8.2 billion during the third quarter, the FDIC said in its Third Quarter 2009 CFO Report to the Board. The decrease was primarily due to a $21.7 billion increase in the provision for insurance losses, which was partially offset by a $3 billion increase in assessment revenue.
                When it was close to negative.

                http://www.journalofaccountancy.com/...

                Since then the big banks have beefed up their capital by trillions.

                I won't bother with a link for that...

                I am always right.

                "The way to see by faith is to shut the eye of reason." - Thomas Paine

                by shrike on Wed Mar 20, 2013 at 09:00:04 PM PDT

                [ Parent ]

                •  Have you ever read this quote? (1+ / 0-)
                  Recommended by:
                  RageKage
                  "The way to see by faith is to shut the eye of reason." - Thomas Paine
                  So the $50 million figure was based on faith, thin air, or I guess in 2009 going from $10.4 billion to -$8.2 billion you have to pass by $50 million. I see the rigor of your arguments.

                  Faith by definition is infalible, but that is best left to other realms.

                  "The great enemy of the truth is very often not the lie -- deliberate, contrived and dishonest, but the myth, persistent, persuasive, and unrealistic. Belief in myths allows the comfort of opinion without the discomfort of thought." -John F. Kennedy

                  by basquebob on Wed Mar 20, 2013 at 09:17:28 PM PDT

                  [ Parent ]

        •  You're deflecting (3+ / 0-)
          Recommended by:
          Paper Cup, basquebob, snoopydawg

          by picking up something, anything, to discredit the diarist and Smith's article from which he quotes.

          Bob has addressed this attempt to hijack and deflect by others.

          Clearly, you're unhappy with the content and tone of the diary, assuming you read the entire thing.

          Perhaps you'd be happier elsewhere.

          The "extreme wing" of the Democratic Party is the wing that is hell-bent on protecting the banks and credit card companies. ~ Kos

          by ozsea1 on Wed Mar 20, 2013 at 07:22:02 PM PDT

          [ Parent ]

        •  No, she's informing us that the FDIC would be... (6+ / 0-)

          responsible for the other $.92, and indicating that, given the size of its reserves, taxpayers would have to pick up much of that tab.

          "The Democratic Party is not our friend: it is the only party we can negotiate with."

          by 2020adam on Wed Mar 20, 2013 at 08:30:02 PM PDT

          [ Parent ]

        •  Enough with attacks (1+ / 0-)
          Recommended by:
          Don midwest

          And calling those of us that read her feeble.
          Keep defending Obama and the Dems no matter what damage they do to this country and you enable them and do not hold their actions accountable, then they will keep doing it.

          Gitmo is a Concentration Camp. Not a Detention Center. Torture happens at Concentration Camps. Torture happens at Gitmo. How much further will US values fall? Where is YOUR outrage at what the United States does in OUR names?

          by snoopydawg on Thu Mar 21, 2013 at 12:04:13 AM PDT

          [ Parent ]

      •  they're up to around 30 cents for the bondholders. (0+ / 0-)

        and the bankruptcy estate is still winding down, so they could get more.  

        Smith gets a lot of facts wrong.  if you're interested in knowing true facts, you should trust but verify with her.

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