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Bank Profits Are Shrinking, as They Should - Room for Debate
The market no longer determines the success or failure of banks.-
Shrinking, as They Should
Nicole Gelinas, Manhattan Institute
Ms. Gelinas correctly concludes that the big banks should shrink and that many if not most of them should fail.Her argument is simply wrong."The financial industry has grown too quickly for more than 25 years. Between the early 1980s and 2007, financial-industry profits more than quadrupled as a share of the nation’s income. Why the financial industry enjoyed this growth is no great mystery. Beginning in the early ’80s, Washington treated the financial industry’s big lenders -- global bondholders -- as a class of investors immune from losses. The phrase “too big to fail” entered the financial press lexicon."I am not at all sure that there is such a thing as too rapid growth.The way the bankers did it was the problem. They under priced risk.They learned to "game" the rating agencies so that very unstable collateralised debt obligation bonds rated as absolutely secure. They then built great structures of bets on these mislabeled risks and laid off the bets for a fee. "Too big to fail" entered the lexicon not as a guarantee but as a statement of confidence. When the Minsky moment came and the bets were called Government was called in to prevent a catastrophic failure of the monetary system. Those global bond holders are central banks, union pension funds, government retirement funds and other uninsured depositors. If those funds evaporated as they threatened to do commerce and government would halt in a blizzard of suits. Until the large depositors and the bond holders can be protected the discipline of the marketplace cannot be allowed.Europe is struggling with just this problem. Greece will not be able to pay its debts.There are two solutions. They can default or healthier economies can pay those debts and hope for eventual repayment when times are better. I do think they should prepay. Interest is a killer. -
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A.D.H.D. Is a Misdiagnosis - Room for Debate
By making an A.D.H.D. diagnosis, we ignore and stop looking for what is really going on with the child.
There is something there. It is far too easy to see it where it is not.Testing is required. Look at the child. -
Michael Kittle
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With Maison Ilan, an American Winemaker Hears the Call of Burgundy
“With Maison Ilan, an American Winemaker Hears the Call of Burgundy - http://nyti.ms/oPdkPF”I am very glad he is happy.The craft is far too likely to destroy you if you let it.-
The Flock Comedies - Readers' Comments - NYTimes.com
Flocks can be very demanding.-
Showing Gay Teens a Happy Future
A new online video channel is reaching out to teenagers who are bullied at school for being gay. The message: life really does get better after high school.
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Have Regulations Hurt Bank Profits? - Room for Debate
If recent rules have brought Wall Street revenue back down to earth, is that healthy or a sign of heavy-handed regulation?Yes. Any effective regulation would be considered heavy handed.The banking business was desperately in need of regulation.The present level of regulation is almost certainly insufficient. -
Banks Should Welcome Rules - Room for Debate
The costs of regulation are trivial relative to the costs of an economic crisis like the recent one.This event has not cost the bankers that much. The cost of effective regulation would be great in that it would prevent a repetition of the cycle. The banks will fight. -
parisexpat
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The Flock Comedies - Readers' Comments - NYTimes.com
Flocks can get very demanding.
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With Maison Ilan, an American Winemaker Hears the Call of Burgundy
“With Maison Ilan, an American Winemaker Hears the Call of Burgundy - http://nyti.ms/oPdkPF”Nothing to add to this. I will happily visit.Vintners must drink their product.
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Rich
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Does IMF Stand for Impressive Macroeconomic Flexibility?
So the IMF is holding a meeting on rethinking macroeconomic policy (I was invited but couldn’t make the timing work.) And the Fund’s chief economist has already made it clear that he’s open to some serious revision of the prevailing paradigm.
http://www.nytimes.com/2011/10/21/business/global/eu-postpones-decision-on-how-to-deal-with-crisis.html?ref=europe
"Germany and France, still at odds over a more forceful response to the sovereign debt crisis, postponed a decision-making summit meeting for several days amid signs that the complexities of European politics may block an all-encompassing resolution."
http://www.guardian.co.uk/business/debt-crisis- 20 Oct 2011: Announcement of Ignazio Visco ends months of bickering
- 20 Oct 2011: Costas Douzinas: The Greek elite that tried to push through policies on the back of a deficit it fuelled stands alone and accused 40 comments
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20 Oct 2011: Athens parliament passes austerity package amid violent protests in which one man is killed
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Cartoon, 20 Oct 2011: Greece approves new cuts but France and Germany cannot reach a bailout deal
- 20 Oct 2011: Merkel and Sarkozy at loggerheads over French proposal for bailout fund to become $2tn 'bank' overseen by ECB
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Showing Gay Teens a Happy Future
A new online video channel is reaching out to teenagers who are bullied at school for being gay. The message: life really does get better after high school.
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