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Paul Volcker: Obama plans maintain 'too big to fail' Paul Volcker: Obama plans maintain 'too big to fail'
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09-24-2009 , 12:27 PM
#26
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Quote:
Originally Posted by adios
Let's define too big to fail first though.
Well, I think that the phrase - as commonly used - connotes an entity that is go big that its failure would cause major havoc/disruptions in the economy.

If anyone can offer a better definition, I'll all ears (or eyes).
09-24-2009 , 12:31 PM
#27
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Quote:
Originally Posted by Wynton
Well, I think that the phrase - as commonly used - connotes an entity that is go big that its failure would cause major havoc/disruptions in the economy.

If anyone can offer a better definition, I'll all ears (or eyes).
Basically that's my view but specific criteria would need to be enumerated.
09-24-2009 , 12:42 PM
#28
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Quote:
Originally Posted by Wynton
The markets didn't let AIG and GM get too big? Or is your view that those companies didn't really get "too big to fail"?
My view is that the banking system is controlled by the Fed, propped up by the FDIC/Treasury, and the market really doesn't have much of a say what goes on.
09-24-2009 , 12:51 PM
#29
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Amazing that when the most heavily regulated, protected, government cartelized and centrally planned industries blow up because government has destroyed or crippled the markets inherent negative feedback mechanisms and replaced them with positive feedback loops, people still actually believe that it was the market that failed.
09-24-2009 , 12:53 PM
#30
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POTD
09-24-2009 , 12:54 PM
#31
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Quote:
Originally Posted by tubasteve
My view is that the banking system is controlled by the Fed, propped up by the FDIC/Treasury, and the market really doesn't have much of a say what goes on.
But do you see any of that changing? If not, doesn't it make sense for the government to stop companies from getting too large via regulation?
09-24-2009 , 01:12 PM
#32
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Amazing that when the most heavily regulated, protected, government cartelized and centrally planned industries blow up because government has destroyed or crippled the markets inherent negative feedback mechanisms and replaced them with positive feedback loops, people still actually believe that it was the market that failed.
/ end universe
09-24-2009 , 01:33 PM
#33
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Quote:
Originally Posted by Wynton
But do you see any of that changing? If not, doesn't it make sense for the government to stop companies from getting too large via regulation?
I'm skeptical of the governments ability to do anything sustainably
09-24-2009 , 02:19 PM
#34
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Quote:
Originally Posted by Borodog
Amazing that when the most heavily regulated, protected, government cartelized and centrally planned industries blow up because government has destroyed or crippled the markets inherent negative feedback mechanisms and replaced them with positive feedback loops, people still actually believe that it was the market that failed.
Quote:
Originally Posted by RollinHand
/ end universe
Because it is so colossally wrong? Banking is intensely competitive and saying that there is a banking cartel or that banking is certrally planned is ******ed.
09-24-2009 , 02:22 PM
#35
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Quote:
Originally Posted by iron81
Because it is so colossally wrong? Banking is intensely competitive and saying that there is a banking cartel or that banking is certrally planned is ******ed.
Lol. The Federal Reserve System IS a cartel. If you can't comprehend this it's because you don't know what a "cartel" is.

Specifically:

Quote:
A cartel is a formal (explicit) agreement among firms. It is a formal organization of producers that agree to coordinate prices and production. - wiki
The price that the Federal Reserve System "coordinates", i.e. centrally plans, is the price of money, i.e. interest rates.

That you can't comprehend these things does not make other people "******ed."
Last edited by Borodog; 09-24-2009 at 02:30 PM.
09-24-2009 , 02:23 PM
#36
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Quote:
Originally Posted by iron81
Because it is so colossally wrong? Banking is intensely competitive and saying that there is a banking cartel or that banking is certrally planned is ******ed.
I disagree.
09-24-2009 , 02:26 PM
#37
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Iron81 then how would you describe the function and role of the Central Banks? What would you call their ability to dictate interest rates and reserve requirements, print money at will and their ability to control the only legal tender available to the citizens of their respective countries?
09-24-2009 , 02:31 PM
#38
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Quote:
Originally Posted by Marnixvdb
Iron81 then how would you describe the function and role of the Central Banks? What would you call their ability to dictate interest rates and reserve requirements, print money at will and their ability to control the only legal tender available to the citizens of their respective countries?
a mafia?
09-24-2009 , 02:36 PM
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09-24-2009 , 02:38 PM
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Since I have explicitly been told by a red that "Saying that there is a banking cartel or that banking is certrally planned is ******ed" is somehow not a personal insult, I'd like to say that saying that saying there is a banking cartel or that banking is certrally planned is ******ed, when there is clearly a banking cartel (the Federal Reserve System) that centrally plans probably the most important feature of banking, the interest rate, is halfwitted and microcephalic.
09-24-2009 , 02:41 PM
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The Fed does not tell the banks what interest rates to charge consumers. The Fed sets two interest rates: the rate it charges banks and the rate banks charge each other (the "overnight rate"). Within that framework, banks are completely free to set most interest rates for loans and deposits. The banks then go out and charge between 4% and 30% on these loans in an intensely competitive market.

So no, there is no agreement among producers to coordinate prices.
09-24-2009 , 02:43 PM
#42
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Quote:
The Fed sets two interest rates
Quote:
So no, there is no agreement among producers to coordinate prices.
uh wat
09-24-2009 , 02:43 PM
#43
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do you know anything about the credit crisis at all?
09-24-2009 , 02:44 PM
#44
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Quote:
Originally Posted by tubasteve
do you know anything about the credit crisis at all?
Apparently more than you.
09-24-2009 , 02:47 PM
#45
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http://en.wikipedia.org/wiki/Federal_funds_rate

if you read that and still don't have any clue why your position is ridiculous then i have no interest in continuing a discussion with you
09-24-2009 , 02:48 PM
#46
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Quote:
Originally Posted by iron81
The Fed does not tell the banks what interest rates to charge consumers. The Fed sets two interest rates: the rate it charges banks and the rate banks charge each other (the "overnight rate"). Within that framework, banks are completely free to set most interest rates for loans and deposits. The banks then go out and charge between 4% and 30% on these loans in an intensely competitive market.

So no, there is no agreement among producers to coordinate prices.
Lol. Let any other industry fix prices among themselves and you will scream bloody murder about antitrust. Saying that there is no agreement between the 12 privately owned Federal Reserve banks to fix the price of overnight interbank lending, or that such an agreement does not constitute a banking cartel, is ******ed.
09-24-2009 , 03:18 PM
#47
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The Federal Reserve as a Cartelization Device.

Not that you will read it, of course.
09-24-2009 , 03:28 PM
#48
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Quote:
Originally Posted by Borodog
Lol. Let any other industry fix prices among themselves and you will scream bloody murder about antitrust. Saying that there is no agreement between the 12 privately owned Federal Reserve banks to fix the price of overnight interbank lending, or that such an agreement does not constitute a banking cartel, is ******ed.
Exemplifying this ******ation is the fact that a nation with zero real accumulated savings has its interest rate has artificially fixed at 0%. If the market instead of central planners/bankers determined the interest rate, such miniscule savings would translate into obscenely high interest rates, which would only come down once real savings are increased. But of course artificially imposed 0% interest rates on a country with 0% savings won't result in any unforeseen economic distortions.

Spoiler:
butnahhhhhhh
09-24-2009 , 03:28 PM
#49
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No, I am not going to read 48 pages of wingnuttery.
09-24-2009 , 03:34 PM
#50
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Quote:
Originally Posted by iron81
The Fed does not tell the banks what interest rates to charge consumers. The Fed sets two interest rates: the rate it charges banks and the rate banks charge each other (the "overnight rate"). Within that framework, banks are completely free to set most interest rates for loans and deposits. The banks then go out and charge between 4% and 30% on these loans in an intensely competitive market.

So no, there is no agreement among producers to coordinate prices.
Just for fun, how would you call the OPEC? It's the organisation of oil producing countries who try to control prices through controlling the supply side by setting quota for the oil production.

Keep in mind though, that there is intense competition in the fuel market, where gas suppliers charge consumers wildly different prices.
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