TheSlamma
Diamond Member
- Sep 6, 2005
- 7,625
- 5
- 81
Thats why you don't get a house way out of range and one you can get even a temp job to cover.
If I fell *victim* to losing my job like I did 4 times in 3 years back between 1999-2002 I could cover my mortgage on a temp job. These *victims* you speak of go out and buy a house WAY out of their price range because they feel they deserve it and then can barely cover the thing. "Victims" my ass. :thumbsdown: :thumbsdown: :thumbsdown: :thumbsdown:
hmm ok maybe I need to define "moral hazard" for everyone
The risk that a party to a transaction has not entered into the contract in good faith, has provided misleading information about its assets, liabilities or credit capacity, or has an incentive to take unusual risks in a desperate attempt to earn a profit before the contract settles.
http://www.investopedia.com/terms/m/moralhazard.asp
The risk that a party to a transaction has not entered into the contract in good faith, has provided misleading information about its assets, liabilities or credit capacity, or has an incentive to take unusual risks in a desperate attempt to earn a profit before the contract settles.
http://www.investopedia.com/terms/m/moralhazard.asp
IGBT
Lifer
- Jul 16, 2001
- 17,973
- 140
- 106
..the end result when political elements tamper with the free market and encourage home loans to DEAD BEATS who couldn't afford them. All the while political hacks whispering in the ears of the lenders, "don't worry.. the dumb shit tax payer will cover the loss".
Originally posted by: sonambulo
Originally posted by: Tiamat
too bad their customer services sucks a big one
You got that right. I've boned two BoA tellers and both gave amazing head.
The card slot in the ATM machine doesn't count as "head"
Mo0o
Lifer
- Jul 31, 2001
- 24,227
- 3
- 76
Originally posted by: Koing
I got quite lucky...didn't interview at Lehmans, didn't hear anything back from Bears after the 2nd interview...
A mate interviewed at Lehmans and was turned down due to his excessively stylish hair
It's completely savage that they put so much money in to one basket like that...
Koing
where are you now? Goldman i hope
I'll start watching Cramer... if he announces that Morgan Stanley and Goldman Sachs are fine, I'll interpret the opposite and expect trouble.
Oyeve
Lifer
- Oct 18, 1999
- 22,066
- 882
- 126
I feel the same. All I picture are these rich-ass old farts puffing cigars making billions and giving nothing to the common working guy. I'd love to see these old farts in a freaking cardboard box on the street. Like in that 48 Hours movie. Buncha thieves if you ask me.
Mo0o
Lifer
- Jul 31, 2001
- 24,227
- 3
- 76
Speaking of all this, has anyone read the Vanity Fair article about the Bear Stearns collapse? It's a GREAT read and gave me a lot of insight into what really happened behind the scenes. From they way they presented the story, it wasn't really Bear's subprimes that killed them, it was the poor reputation after that loss plus rampant speculation of liquidity issues that scuttled them. Anyways, if you guys have some time to kill, I highly recommend it:
http://www.vanityfair.com/poli.../08/bear_stearns200808
http://www.vanityfair.com/poli.../08/bear_stearns200808
- Aug 23, 2003
- 25,375
- 142
- 116
Remember that the FDIC isn't a fool-proof guarantee that your money is safe if any more banks collapse as a result of this financial crisis.
Yes, they guarantee up to $100,000 per account. However, the FDIC only has about $40-50 billion to insure about $9 trillion in deposits, and about 100 banks are "at risk" holding $1 trillion. IndyMac's failure cost the FDIC $8 billion. Something like WaMu going under would cause a major run on all banks that appear even remotely weak.
Yes, they guarantee up to $100,000 per account. However, the FDIC only has about $40-50 billion to insure about $9 trillion in deposits, and about 100 banks are "at risk" holding $1 trillion. IndyMac's failure cost the FDIC $8 billion. Something like WaMu going under would cause a major run on all banks that appear even remotely weak.
UglyCasanova
Lifer
- Mar 25, 2001
- 19,275
- 1,361
- 126
ultimatebob
Lifer
- Jul 1, 2001
- 25,134
- 2,450
- 126
Please. The vast majority of people are very hard working (80+ hours) people who are very intelligent and driven. They add intellectual capital.
I don't know all that much about structured finance, but what I do know has helped several companies go through their funding. My work alone saved a Fortune 50 company over $20MM in funding costs in the last 3 years and will save them a lot of money in the future.
The idea that people on Wall St. don't provide anything is bullshit. Intellectual capital is just as powerful as physical product, if not moreso in many cases.
it is a very good article.
With LEH, it's pretty sad. The company could have survived, but Fuld is a prick. He tried to drive a hard deal when he was in the weak position, which is why the KDB backed out. If there's one thing for certain, he fucked up big time.
I have a good friend that has been there for 20 years, from a trader assistant to SVP generating tons of profit for the company. I am sure a huge portion of her comp was in LEH stock, probably with lockouts. She wasn't involved in the BS here. It's too bad.
Can you explain why allowing Bear to collapse would have apparently been catastrophic to the worldwide financial system, but allowing Lehman to fail is apparently acceptable?
I think the scale of the "bailout" would be too huge for LEH. It'd certainly create a massive conflict and moral hazard. I think that Paulson et al. are saying..."This is what happen if you fuck up, refuse to take offered liquidity, and then come crying to us, don't do that". Look at AIG, they're willing to let them sit and spin. Not to mention, the "bazooka" has been shot, there isn't much left.
People wanted lessons taught and they are being taught now. I hope that people listen and stop this BS.
OrByte
Diamond Member
- Jul 21, 2000
- 9,303
- 144
- 106
Article on FDIC participation
Top Economist: Americans Should Worry About Bank Deposits if Congress Doesn't Act
Posted Sep 15, 2008 12:58pm EDT by Aaron Task in Investing, Recession, Banking
Related: LEH, MER, BAC, AIG, WM, ^DJI, ^GSPC
Updated from 12:58 p.m. EDT
With the "financial storm of the century" hitting financial institutions, many Americans are worried about the safety of their bank deposits. While the FDIC insures individual accounts up to $100,000, the reaction to IndyMac's failure this summer -- lines outside retail branches -- shows Americans have limited faith in the Federal Deposit Insurance Corp., which guarantees individual accounts up to $100,000.
Update: "The banking system is safe and sound," Treasury Secretary Hank Paulson declared at a mid-afternoon press conference Monday, seeking to ameliorate such concerns.
"Nothing is more important than the stability and orderliness of our financial markets [and] regulators remain vigilant," Paulson continued. "We're working through a difficult period in our financial markets right now as we work of some of the past excesses, but the American people can remain confident in the soundness and resilience of our financial system."
But Americans are justified to be worried, says Nouriel Roubini, of NYU's Stern School and RGE Monitor, who notes there is already a "slow-motion run on retail banks" occurring nationwide.
That "run" could accelerate as people realize the FDIC fund has about $50 billion to "insure" about $1 trillion in assets at the nation's financial institutions, says Roubini. "They're going to run out of money" unless Congress acts soon to recapitalize the FDIC.
In addition, the recent spike in number of banks on the FDIC's "troubled list" is only through June, meaning even that inflated number understates the problem.
The intent here isn't to add to people's anxieties, but Roubini is one of the few market watchers to correctly predict the severity of this ongoing credit crisis. If nothing else, he says people with accounts exceeding $100,000 in value should spread their money - and the risk - among different firms.
Now I am sure that the $50 bil that the FDIC has on hand to "insure" the nationals banks will go up, I am sure Congress will pour money into the fund.
But
$50 Bill vs $1 Trill ?? is that the type of money descrepency that the Fed is looking at right now? is there historical data to measure the amount of money that the Fed normally has to insure vs its capital on hand?
$50 bill vs $1 trill seems like huge gap to me.
Top Economist: Americans Should Worry About Bank Deposits if Congress Doesn't Act
Posted Sep 15, 2008 12:58pm EDT by Aaron Task in Investing, Recession, Banking
Related: LEH, MER, BAC, AIG, WM, ^DJI, ^GSPC
Updated from 12:58 p.m. EDT
With the "financial storm of the century" hitting financial institutions, many Americans are worried about the safety of their bank deposits. While the FDIC insures individual accounts up to $100,000, the reaction to IndyMac's failure this summer -- lines outside retail branches -- shows Americans have limited faith in the Federal Deposit Insurance Corp., which guarantees individual accounts up to $100,000.
Update: "The banking system is safe and sound," Treasury Secretary Hank Paulson declared at a mid-afternoon press conference Monday, seeking to ameliorate such concerns.
"Nothing is more important than the stability and orderliness of our financial markets [and] regulators remain vigilant," Paulson continued. "We're working through a difficult period in our financial markets right now as we work of some of the past excesses, but the American people can remain confident in the soundness and resilience of our financial system."
But Americans are justified to be worried, says Nouriel Roubini, of NYU's Stern School and RGE Monitor, who notes there is already a "slow-motion run on retail banks" occurring nationwide.
That "run" could accelerate as people realize the FDIC fund has about $50 billion to "insure" about $1 trillion in assets at the nation's financial institutions, says Roubini. "They're going to run out of money" unless Congress acts soon to recapitalize the FDIC.
In addition, the recent spike in number of banks on the FDIC's "troubled list" is only through June, meaning even that inflated number understates the problem.
The intent here isn't to add to people's anxieties, but Roubini is one of the few market watchers to correctly predict the severity of this ongoing credit crisis. If nothing else, he says people with accounts exceeding $100,000 in value should spread their money - and the risk - among different firms.
Now I am sure that the $50 bil that the FDIC has on hand to "insure" the nationals banks will go up, I am sure Congress will pour money into the fund.
But
$50 Bill vs $1 Trill ?? is that the type of money descrepency that the Fed is looking at right now? is there historical data to measure the amount of money that the Fed normally has to insure vs its capital on hand?
$50 bill vs $1 trill seems like huge gap to me.
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