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http://www.milkeninstitute.com/pdf/TBTF.pdf
To get an idea of just how big the big banks are, two measures are used: asset size and asset
size as a percentage of U.S. GDP; then on the global level, asset size and asset size per world
GDP. In the U.S. analysis, the top five bank holding companies account for slightly over half of
all U.S. bank holding company assets, while the 50 largest BHCs account for 89 percent of total
assets. The biggest BHC, JPMorgan Chase, has $2.3 trillion in assets; by comparison, the worlds
largest publicly traded bank is Deutsche Bank, with $3 trillion of assets. As one adds the assets
of more BHCs, the cumulative total relative to GDP reaches 98 percent for the 50 biggest U.S.
companies. The assets of just the 10 biggest companies equal 75 percent of GDP. It could only
take trouble at a few large financial companies to sharply curtail available credit and disrupt
real economic activity. A catastrophic scenario would be one in which difficulty at key banks
disrupts the payments system that constitutes the central nervous system of the U.S. economy.
Worldwide, based on asset size, the five biggest banks accounted for 14 percent of total bank
assets in Q4 2011. The 50 biggest banks or BHCs accounted for nearly 70 percent of total bank
assets. The banks are headquartered in 16 countries that account for 71 percent of world GDP.
The assets of these 50 big banks were nearly equal to world GDP in the Q4 2011. Furthermore,
seven of these banks have assets that exceed 100 percent of the GDP of their home countries.
These are indeed big banks. But will the reforms being undertaken help or hinder the TBTF
problem?
Economics: Break Up the Big Banks - APDAWeb Wiki
Since the early 1970s, the share of assets controlled by the 12 largest banks in the United States has ballooned to over 70% of total banking assets, leading many to call these megabanks too big to fail. Our case is very simple: we say the US federal government should break up the big banks
Have You Heard About The 16 Trillion Dollar Bailout The Federal Reserve Handed To The Too Big To Fail Banks?
According to the GAO audit, $16.1 trillion in secret loans were made by the Federal Reserve between December 1, 2007 and July 21, 2010. The following list of firms and the amount of money that they received was taken directly from page 131 of the GAO audit report....
Citigroup - $2.513 trillion
Morgan Stanley - $2.041 trillion
Merrill Lynch - $1.949 trillion
Bank of America - $1.344 trillion
Barclays PLC - $868 billion
Bear Sterns - $853 billion
Goldman Sachs - $814 billion
Royal Bank of Scotland - $541 billion
JP Morgan Chase - $391 billion
Deutsche Bank - $354 billion
UBS - $287 billion
Credit Suisse - $262 billion
Lehman Brothers - $183 billion
Bank of Scotland - $181 billion
BNP Paribas - $175 billion
Wells Fargo - $159 billion
Dexia - $159 billion
Wachovia - $142 billion
Dresdner Bank - $135 billion
Societe Generale - $124 billion
"All Other Borrowers" - $2.639 trillion
How Too Big to Fail gets created........Allowed by Clinton, supported by both parties in the votes.
You can't absolve the Dems in this mess Dad, no matter how much BS you post.
9 Wall Street Execs Who Cashed In on the Crisis | Mother Jones
9 Wall Street Execs Who Cashed In on the Crisis
All from the Too Big to Fail Crowd.
The mergers in my post before this one weren't allowed under the Glass Act.
Another forgotten element. An element of the Glass Steagall Act.
Again, leading to larger banks and mergers.....a necessity to overturn to allow the mergers that happened later under waivers and the Graham Leahy Act.
Creating TOO BIG TO FAIL COMPANIES..............
Dems claim they didn't do any of this. Yet both sides did this.
Yep, this was done for the people, so they could use the same bank in another state. LOL
It was all part of the deal to remove all restrictions on the banks to allow them to bet Fiat Currency out the ass and crush the economy in the end.
Which is EXACTLY why the Glass Steagall Act should be brought back.
Why The Glass-Steagall Myth Persists
There is zero evidence this change unleashed the financial crisis. If you tally the institutions that ran into severe problems in 2008-09, the list includes Bear Stearns, Lehman Brothers, Merrill Lynch, AIG, and Fannie Mae and Freddie Mac, none of which would have come under Glass-Steagalls restrictions. Even President Obama has recently acknowledged that there is not evidence that having Glass-Steagall in place would somehow change the dynamic.
As for the FDIC-insured commercial banks that ran into trouble, the record is also clear: what got them into trouble were not activities restricted by Glass-Steagall. Their problems arose from investments in residential mortgages and residential mortgage-backed securitiesinvestments they had always been free to engage in.
We're members at the Ayn Rand Center, covering economics and liberty.
Why The Glass-Steagall Myth Persists - Forbes
And where were those mortgage backed securities coming from you might ask. But you didn't.
Yea. commercial banks COULD participate in MBS trades. But many didn't until the returns being shown by some banks, brokers and investment houses started rolling in. And greed took over. They started buying mortgages packaged by lenders that should have never been in the market. There were more little mortgage brokers making shit loans and selling them off, that there was no way to fully realize how much bad debt was being made. Till it caved in. And you know where those brokers were getting their funding for these loans?
It was Wall Street. Not local, regional or even most national banks. It was investment houses on Wall street. Being able to participate in the housing markets for the first time.
Because Glass Steagall had been repealed.
Lots of mid size regional banks did not fail or even get in financial trouble. They did mortgage banking business the old fashioned Glass Stegall way. And never got in trouble.
Why you think that happened?
it-s-the-derivatives-stupid-[/B]why-fannie-freddie-aig-had-to-be-bailed-out/10265]It?s the Derivatives, Stupid! Why Fannie, Freddie, AIG had to be Bailed Out | Global Research
The Anatomy of a Bubble
Until recently, most people had never even heard of derivatives; but in terms of money traded, these investments represent the biggest financial market in the world. Derivatives are financial instruments that have no intrinsic value but derive their value from something else. Basically, they are just bets. You can hedge your bet that something you own will go up by placing a side bet that it will go down. Hedge funds hedge bets in the derivatives market. Bets can be placed on anything, from the price of tea in China to the movements of specific markets.
The point everyone misses, wrote economist Robert Chapman a decade ago, is that buying derivatives is not investing. It is gambling, insurance and high stakes bookmaking. Derivatives create nothing.1 They not only create nothing, but they serve to enrich non-producers at the expense of the people who do create real goods and services. In congressional hearings in the early 1990s, derivatives trading was challenged as being an illegal form of gambling. But the practice was legitimized by Fed Chairman Alan Greenspan, who not only lent legal and regulatory support to the trade but actively promoted derivatives as a way to improve risk management. Partly, this was to boost the flagging profits of the banks; and at the larger banks and dealers, it worked. But the cost was an increase in risk to the financial system as a whole.2
Since then, derivative trades have grown exponentially, until now they are larger than the entire global economy. The Bank for International Settlements recently reported that total derivatives trades exceeded one quadrillion dollars thats 1,000 trillion dollars.3 How is that figure even possible? The gross domestic product of all the countries in the world is only about 60 trillion dollars. The answer is that gamblers can bet as much as they want. They can bet money they dont have, and that is where the huge increase in risk comes in.
Another forgotten element. An element of the Glass Steagall Act.
Again, leading to larger banks and mergers.....a necessity to overturn to allow the mergers that happened later under waivers and the Graham Leahy Act.
Creating TOO BIG TO FAIL COMPANIES..............
Dems claim they didn't do any of this. Yet both sides did this.
Yep, this was done for the people, so they could use the same bank in another state. LOL
It was all part of the deal to remove all restrictions on the banks to allow them to bet Fiat Currency out the ass and crush the economy in the end.
Which is EXACTLY why the Glass Steagall Act should be brought back.
Why The Glass-Steagall Myth Persists
There is zero evidence this change unleashed the financial crisis. If you tally the institutions that ran into severe problems in 2008-09, the list includes Bear Stearns, Lehman Brothers, Merrill Lynch, AIG, and Fannie Mae and Freddie Mac, none of which would have come under Glass-Steagalls restrictions. Even President Obama has recently acknowledged that there is not evidence that having Glass-Steagall in place would somehow change the dynamic.
As for the FDIC-insured commercial banks that ran into trouble, the record is also clear: what got them into trouble were not activities restricted by Glass-Steagall. Their problems arose from investments in residential mortgages and residential mortgage-backed securitiesinvestments they had always been free to engage in.
We're members at the Ayn Rand Center, covering economics and liberty.
Why The Glass-Steagall Myth Persists - Forbes
And where were those mortgage backed securities coming from you might ask. But you didn't.
Yea. commercial banks COULD participate in MBS trades. But many didn't until the returns being shown by some banks, brokers and investment houses started rolling in. And greed took over. They started buying mortgages packaged by lenders that should have never been in the market. There were more little mortgage brokers making shit loans and selling them off, that there was no way to fully realize how much bad debt was being made. Till it caved in. And you know where those brokers were getting their funding for these loans?
It was Wall Street. Not local, regional or even most national banks. It was investment houses on Wall street. Being able to participate in the housing markets for the first time.
Because Glass Steagall had been repealed.
Lots of mid size regional banks did not fail or even get in financial trouble. They did mortgage banking business the old fashioned Glass Stegall way. And never got in trouble.
Why you think that happened?
Easy does it Vern.
Is it a FACT that the 1977 Community Reinvestment Act (CRA), compels banks to make loans to low-income borrowers and in what the supporters of the Act call "communities of color" that they might not otherwise make based on purely economic criteria.?
.
RIGHT WING GARBAGE. I'm shocked
George W. Bush was a major proponent of the kind of mortgages that banks had started making under the CRA. .
HUH?
Was George Bush a member of a community group like ACORN?
"So-called "community groups" like ACORN benefit themselves from the CRA through a process that sounds like legalized extortion. The CRA is enforced by four federal government bureaucracies: the Fed, the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation. The law is set up so that any bank merger, branch expansion, or new branch creation can be postponed or prohibited by any of these four bureaucracies if a CRA "protest" is issued by a "community group." This can cost banks great sums of money, and the "community groups" understand this perfectly well. It is their leverage. They use this leverage to get the banks to give them millions of dollars as well as promising to make a certain amount of bad loans in their communities."
.
Easy does it Vern.
Is it a FACT that the 1977 Community Reinvestment Act (CRA), compels banks to make loans to low-income borrowers and in what the supporters of the Act call "communities of color" that they might not otherwise make based on purely economic criteria.?
.
RIGHT WING GARBAGE. I'm shocked
George W. Bush was a major proponent of the kind of mortgages that banks had started making under the CRA. .
HUH?
Was George Bush a member of a community group like ACORN?
"So-called "community groups" like ACORN benefit themselves from the CRA through a process that sounds like legalized extortion. The CRA is enforced by four federal government bureaucracies: the Fed, the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation. The law is set up so that any bank merger, branch expansion, or new branch creation can be postponed or prohibited by any of these four bureaucracies if a CRA "protest" is issued by a "community group." This can cost banks great sums of money, and the "community groups" understand this perfectly well. It is their leverage. They use this leverage to get the banks to give them millions of dollars as well as promising to make a certain amount of bad loans in their communities."
.
For the Economically challenged, like myself, would it have been possible for Chase, BofA, and Wells to engage in the derivatives game to the extent they did if GS had not been repealed?Lehman Brothers was an investment bank. It did not do Commercial. It did not do Retail. It did not do insurance.
No amount of Glass Steagall would have done ANYTHING to Lehman Brothers either way.
There you go again! Lehman (who bilked ME out of $130K) isn't the issue here. It's Chase, BofA, and Wells Fargo (to a lesser extent) who got into the derivatives game after GS was repealed. They had no idea they'd end up like they did.....pawning off crap mortgages all over the world. To this day, you better do one HELL of a title search before you buy a distressed property because nobody knows who really owns a lot of them....you can be in for a BIG SURPRISE down the road when you get a letter stating the property you bought didn't belong to the party who sold it to you.
Again, what banks.... would have been prevented from failing.... under Glass Steagall?
Name the banks!
WTF is the matter with you? You continue chanting "NAME THE BANKS" when bank failures have little to do with the topic...ie should banks taking deposits be allowed to participate in leveraged high risk derivatives. I would tell you that several community bank "failures" happened that you never heard about because they were quietly acquired by the big chains for pennies on the dollar.
It's been made clear in this thread that Clinturd's CRA loans were the major culprit in the outcome of leveraged bets made by major banks and "insured" by AIG. This would have been illegal under the original GS. Of course banking lobbyists campaigned for years to get their restrictions lifted. But nobody had ever heard of MORTGAGES being bundled as financial instruments outside of the commercial banking community. Any of this getting through?
The crisis that we all felt came about because CREDIT dried up. Firms unable to finance projects in the pipeline and future had to pull back. Employers cut to the bone creating massive unemployment, which worsened the mortgage failures problem. Small business depending on normal economic activity failed by the bushel...dominoes fell and continued falling because the banks locked their vaults.
A total panic was avoided when Bush told his Treasury Secretary to bring these banker assholes into the WH and sign up for government loans at a stout rate to provide them with operating capital. None of them were allowed to leave until they signed. That's how a PRESIDENT deals with a crisis. The same bankers laughed all the way home after meeting with Dubya's replacement. Obozo did nothing about their treachery, and even hustled them for campaign contributions.
Nobody is saying a 1933 law should be put back on the books without accounting for the changes in the banking industry ie instant movement of funds around the world including cultures and currencies without western rules and regulations. From what I understand, Dodd/Frank, both enablers of the meltdown, is simply more bullshit the bankers bean counters have already found ways around.
A simple rule is all that's needed. A bank cannot accept deposits for checking and savings accounts and then BET that money in derivatives schemes. PERIOD.
Again, what banks.... would have been prevented from failing.... under Glass Steagall?
Name the banks!
WTF is the matter with you? You continue chanting "NAME THE BANKS" when bank failures have little to do with the topic...ie should banks taking deposits be allowed to participate in leveraged high risk derivatives. I would tell you that several community bank "failures" happened that you never heard about because they were quietly acquired by the big chains for pennies on the dollar.
It's been made clear in this thread that Clinturd's CRA loans were the major culprit in the outcome of leveraged bets made by major banks and "insured" by AIG. This would have been illegal under the original GS.
You know what Dad23. I agree with most everything you have to say on this subject.........with one exception.
Bill Clinton DID sign the legislation into law, opening the door to what followed. Why he did it, I don't know. Maybe to gain favor during his impeachment hearings. They were going on at pretty much the same time.
He had advice as to what could happen if this Graham Leach bill was enacted. That does put a lot of the blame on Bill IMO.
Other than that, attribute a lot of the actions in housing markets that followed to greed and you can see how things got out of hand. Some people made fortunes on the mess. It just wasn't you or I.
It's kinda like the Patriot Act. Bush signed it, owns it and put in place all the abuses that have followed.
But Obama has taken advantage of it too.
All we have to do is get Government out of loaning people money for homes...
For the Economically challenged, like myself, would it have been possible for Chase, BofA, and Wells to engage in the derivatives game to the extent they did if GS had not been repealed?Lehman Brothers was an investment bank. It did not do Commercial. It did not do Retail. It did not do insurance.
No amount of Glass Steagall would have done ANYTHING to Lehman Brothers either way.
There you go again! Lehman (who bilked ME out of $130K) isn't the issue here. It's Chase, BofA, and Wells Fargo (to a lesser extent) who got into the derivatives game after GS was repealed. They had no idea they'd end up like they did.....pawning off crap mortgages all over the world. To this day, you better do one HELL of a title search before you buy a distressed property because nobody knows who really owns a lot of them....you can be in for a BIG SURPRISE down the road when you get a letter stating the property you bought didn't belong to the party who sold it to you.
For the Economically challenged, like myself, would it have been possible for Chase, BofA, and Wells to engage in the derivatives game to the extent they did if GS had not been repealed?Lehman Brothers was an investment bank. It did not do Commercial. It did not do Retail. It did not do insurance.
No amount of Glass Steagall would have done ANYTHING to Lehman Brothers either way.
There you go again! Lehman (who bilked ME out of $130K) isn't the issue here. It's Chase, BofA, and Wells Fargo (to a lesser extent) who got into the derivatives game after GS was repealed. They had no idea they'd end up like they did.....pawning off crap mortgages all over the world. To this day, you better do one HELL of a title search before you buy a distressed property because nobody knows who really owns a lot of them....you can be in for a BIG SURPRISE down the road when you get a letter stating the property you bought didn't belong to the party who sold it to you.
it-s-the-derivatives-stupid-[/B]why-fannie-freddie-aig-had-to-be-bailed-out/10265]It?s the Derivatives, Stupid! Why Fannie, Freddie, AIG had to be Bailed Out | Global Research
The Anatomy of a Bubble
Until recently, most people had never even heard of derivatives; but in terms of money traded, these investments represent the biggest financial market in the world. Derivatives are financial instruments that have no intrinsic value but derive their value from something else. Basically, they are just bets. You can “hedge your bet” that something you own will go up by placing a side bet that it will go down. “Hedge funds” hedge bets in the derivatives market. Bets can be placed on anything, from the price of tea in China to the movements of specific markets.
“The point everyone misses,” wrote economist Robert Chapman a decade ago, “is that buying derivatives is not investing. It is gambling, insurance and high stakes bookmaking. Derivatives create nothing.”1 They not only create nothing, but they serve to enrich non-producers at the expense of the people who do create real goods and services. In congressional hearings in the early 1990s, derivatives trading was challenged as being an illegal form of gambling. But the practice was legitimized by Fed Chairman Alan Greenspan, who not only lent legal and regulatory support to the trade but actively promoted derivatives as a way to improve “risk management.” Partly, this was to boost the flagging profits of the banks; and at the larger banks and dealers, it worked. But the cost was an increase in risk to the financial system as a whole.2
Since then, derivative trades have grown exponentially, until now they are larger than the entire global economy. The Bank for International Settlements recently reported that total derivatives trades exceeded one quadrillion dollars – that’s 1,000 trillion dollars.3 How is that figure even possible? The gross domestic product of all the countries in the world is only about 60 trillion dollars. The answer is that gamblers can bet as much as they want. They can bet money they don’t have, and that is where the huge increase in risk comes in.
Fannie and Freddie didn't fail because of derivatives.
Born, who pushed to strictly regulate derivatives under the Clinton Administration, but lost the battle to, among other people, Alan Greenspan, told the former Federal Reserve chair that his agency failed to prevent housing bubble, failed to prevent the predatory lending scandal, failed to prevent the activities that would bring the financial system to the verge of collapse.
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