Comments on: Volcker: Reinstate Glass Steagall http://www.ritholtz.com/blog/2009/09/volcker-reinstate-glass-steagall/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 20:08:08 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: Summers Profiles in The New Yorker « Rortybomb http://www.ritholtz.com/blog/2009/09/volcker-reinstate-glass-steagall/comment-page-2/#comment-222963 Summers Profiles in The New Yorker « Rortybomb Tue, 06 Oct 2009 14:45:31 +0000 http://www.ritholtz.com/blog/?p=39039#comment-222963 [...] harder to close banks, or even approach the terms of doing so, when they are combined entities. To echo Volcker, we have a safety net on commercial banking for a reason, and allowing investment banking to access [...] [...] harder to close banks, or even approach the terms of doing so, when they are combined entities. To echo Volcker, we have a safety net on commercial banking for a reason, and allowing investment banking to access [...]

]]> By: Mark E Hoffer http://www.ritholtz.com/blog/2009/09/volcker-reinstate-glass-steagall/comment-page-2/#comment-218990 Mark E Hoffer Fri, 25 Sep 2009 04:06:46 +0000 http://www.ritholtz.com/blog/?p=39039#comment-218990 Thor, like this: http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Clinton+Bush+Mena+CIA for starters.. bdg123 is correct, 41, 42, 43, all Peas from the same Pod.. now, all 'Hope' and 'Change' and 'Si! Se Puede' aside, 44 is more of the same.. ~~ fsl @13:47 makes a good point. further: http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Volcker+CFR+Trilateral+Commission Thor,

like this: http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Clinton+Bush+Mena+CIA for starters..

bdg123 is correct, 41, 42, 43, all Peas from the same Pod..

now, all ‘Hope’ and ‘Change’ and ‘Si! Se Puede’ aside, 44 is more of the same..
~~
fsl @13:47 makes a good point.
further: http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Volcker+CFR+Trilateral+Commission

]]> By: Triggers, Co-Ops and Medicare Advantage, Oh My! « Politics or Poppycock http://www.ritholtz.com/blog/2009/09/volcker-reinstate-glass-steagall/comment-page-2/#comment-218899 Triggers, Co-Ops and Medicare Advantage, Oh My! « Politics or Poppycock Thu, 24 Sep 2009 22:52:49 +0000 http://www.ritholtz.com/blog/?p=39039#comment-218899 [...] http://www.tnr.com/blog/the-stash/barney-frank-weakening-the-consumer-financial-agency
[17] http://www.ritholtz.com/blog/2009/09/volcker-reinstate-glass-steagall/
[18] [...] [...] http://www.tnr.com/blog/the-stash/barney-frank-weakening-the-consumer-financial-agency
17 http://www.ritholtz.com/blog/2009/09/volcker-reinstate-glass-steagall/
18 [...]

]]> By: danm http://www.ritholtz.com/blog/2009/09/volcker-reinstate-glass-steagall/comment-page-2/#comment-218875 danm Thu, 24 Sep 2009 22:02:38 +0000 http://www.ritholtz.com/blog/?p=39039#comment-218875 scepticus Says: Would 30X leverage be OK with rates at 10%? Low rates make sense for economies with very low growth. ----------------------------- First of all... With your logic, 30X at 10% is way better than 30X at 0% because when rates are 10% then you know that at 10% there will be more growth to support the repayment of the debt. Now for my view... Yes, 30X leverage at 10% is better than 30X leverage at 0%. At 30x leverage and rates at 10%, they are way above the historical norm, meaning that they could potentially come down, boosting valuations and making it easier to repay the debt. At 30X leverage in a zero rate environment, chance are rates will go up, lowering valuations an making harder to repay debt. Basically as rates go to zero, regulators should make sure that leverage goes down, not up. Future repayment of debt depends on future growth and if that growth is not there, the loans are risky because they will default. scepticus Says:

Would 30X leverage be OK with rates at 10%? Low rates make sense for economies with very low growth.
—————————–
First of all…
With your logic, 30X at 10% is way better than 30X at 0% because when rates are 10% then you know that at 10% there will be more growth to support the repayment of the debt.

Now for my view…
Yes, 30X leverage at 10% is better than 30X leverage at 0%.

At 30x leverage and rates at 10%, they are way above the historical norm, meaning that they could potentially come down, boosting valuations and making it easier to repay the debt.

At 30X leverage in a zero rate environment, chance are rates will go up, lowering valuations an making harder to repay debt.

Basically as rates go to zero, regulators should make sure that leverage goes down, not up.

Future repayment of debt depends on future growth and if that growth is not there, the loans are risky because they will default.

]]> By: Assassin http://www.ritholtz.com/blog/2009/09/volcker-reinstate-glass-steagall/comment-page-2/#comment-218738 Assassin Thu, 24 Sep 2009 19:28:16 +0000 http://www.ritholtz.com/blog/?p=39039#comment-218738 "Deposit insurance should be rolled back to 100k per account, but indexed to inflation." Acknowledging that insurance should be indexed to inflation, while desiring a return to the old limit, seems a bit contradictory. It had been 100,000 since *1980*. Just to keep up with inflation, it would need to be around 235,000 currently for the insurance to provide the same effective amount of protection. And 250k is close enough to 235k. To advocate a return to 100k is to pretend that inflation hasn't happened for 29 years. Or do you believe that the 100k limit was too high when first instituted? “Deposit insurance should be rolled back to 100k per account, but indexed to inflation.”

Acknowledging that insurance should be indexed to inflation, while desiring a return to the old limit, seems a bit contradictory. It had been 100,000 since *1980*. Just to keep up with inflation, it would need to be around 235,000 currently for the insurance to provide the same effective amount of protection. And 250k is close enough to 235k. To advocate a return to 100k is to pretend that inflation hasn’t happened for 29 years. Or do you believe that the 100k limit was too high when first instituted?

]]> By: Thor http://www.ritholtz.com/blog/2009/09/volcker-reinstate-glass-steagall/comment-page-2/#comment-218697 Thor Thu, 24 Sep 2009 18:49:21 +0000 http://www.ritholtz.com/blog/?p=39039#comment-218697 bdg123 - Is that seriously your response to MA? "look it up yourself" "you're deluded" Make your case. Or are you here only for the "Rantings". I'd imagine you have your own blog for that. bdg123 – Is that seriously your response to MA? “look it up yourself” “you’re deluded”

Make your case. Or are you here only for the “Rantings”. I’d imagine you have your own blog for that.

]]> By: bdg123 http://www.ritholtz.com/blog/2009/09/volcker-reinstate-glass-steagall/comment-page-2/#comment-218687 bdg123 Thu, 24 Sep 2009 18:38:29 +0000 http://www.ritholtz.com/blog/?p=39039#comment-218687 I'd rather you live on your high horse thinking I don't know what I'm talking about and let you figure out yourself that Clinton's policies are the primary cause of this collapse since you appear deluded by believing Clinton was some great President. It's obvious you are as deluded as the rest of the Clinton supporters. He and Bush are indistinguishable. I’d rather you live on your high horse thinking I don’t know what I’m talking about and let you figure out yourself that Clinton’s policies are the primary cause of this collapse since you appear deluded by believing Clinton was some great President. It’s obvious you are as deluded as the rest of the Clinton supporters. He and Bush are indistinguishable.

]]> By: DeDude http://www.ritholtz.com/blog/2009/09/volcker-reinstate-glass-steagall/comment-page-2/#comment-218684 DeDude Thu, 24 Sep 2009 18:31:42 +0000 http://www.ritholtz.com/blog/?p=39039#comment-218684 Scepticus; if the bank goes under it is not going to cover the deposit on an uninsured account whether it pays 0.25% or it pays 4%. Either accounts are insurred or they are not insurred. If you are talking about allowing banks to set up uninsured accounts then take a look at the mortgage market. Lots of people got lured into adjustable mortgages that they had been told (by that nice lady) were fixed rate. If you allow banksters the ability to defraud regular people, they will do it. Scepticus; if the bank goes under it is not going to cover the deposit on an uninsured account whether it pays 0.25% or it pays 4%. Either accounts are insurred or they are not insurred. If you are talking about allowing banks to set up uninsured accounts then take a look at the mortgage market. Lots of people got lured into adjustable mortgages that they had been told (by that nice lady) were fixed rate. If you allow banksters the ability to defraud regular people, they will do it.

]]> By: DeDude http://www.ritholtz.com/blog/2009/09/volcker-reinstate-glass-steagall/comment-page-2/#comment-218683 DeDude Thu, 24 Sep 2009 18:29:41 +0000 http://www.ritholtz.com/blog/?p=39039#comment-218683 Since when did insurance become moral hazard? Insurance is something that you have to protect against problems you have little or no influence over. The regular mom&pop saver have no influence over what the banksters do - and no way of understanding or predicting if the banksters actions will run the bank to the ground. If anybody think that regular mom&pop savers can go through the books of their banks and actually evaluate the risk that bank is taking, they must be from another planet. So government should force the banks to have insurance on deposits from small savers. No different than forcing people to have liability insurance on their cars; when your reckless behaviour hurt someone else the victims will be compensated. As far as I can see there is no government subsidy if the system is run as it should be (charge enough for the insurance to cover the cost). There wouldn’t be any either even if the government lends the FDIC some money as iong as the cost is covered by the interest government charges for that loan. The expanded limits hopefully soon will be getting down to the regular 100K although the difference is mostly the inconvenince to those who want to have more than 100K held in cash deposits. The true moral hazards is to allow the FDIC to borrow money from the same banks that it is regulating. That is absolutely absurd if you do even the most basic incentive analysis, and criminal if you turn your brain on. What the FDIC should be doing is to charge a variable rate to banks and make it a lot more expensive to insure deposits in banks that engage in riskier behaviour. That way you can align institutional incentives with risk. Since when did insurance become moral hazard? Insurance is something that you have to protect against problems you have little or no influence over. The regular mom&pop saver have no influence over what the banksters do – and no way of understanding or predicting if the banksters actions will run the bank to the ground. If anybody think that regular mom&pop savers can go through the books of their banks and actually evaluate the risk that bank is taking, they must be from another planet. So government should force the banks to have insurance on deposits from small savers. No different than forcing people to have liability insurance on their cars; when your reckless behaviour hurt someone else the victims will be compensated.

As far as I can see there is no government subsidy if the system is run as it should be (charge enough for the insurance to cover the cost). There wouldn’t be any either even if the government lends the FDIC some money as iong as the cost is covered by the interest government charges for that loan. The expanded limits hopefully soon will be getting down to the regular 100K although the difference is mostly the inconvenince to those who want to have more than 100K held in cash deposits.

The true moral hazards is to allow the FDIC to borrow money from the same banks that it is regulating. That is absolutely absurd if you do even the most basic incentive analysis, and criminal if you turn your brain on. What the FDIC should be doing is to charge a variable rate to banks and make it a lot more expensive to insure deposits in banks that engage in riskier behaviour. That way you can align institutional incentives with risk.

]]> By: flipspiceland http://www.ritholtz.com/blog/2009/09/volcker-reinstate-glass-steagall/comment-page-2/#comment-218667 flipspiceland Thu, 24 Sep 2009 17:47:42 +0000 http://www.ritholtz.com/blog/?p=39039#comment-218667 Volcker is vaunted as some kind of guru, but I beg to differ. He also said that taking powers away from the FED is not advisable. That did it as far as I'm concerned. Anyone who thinks Bernanke or Greenspan is competent, has done a yeoman's job and disregards their prior monumental policy errors (and there are some here who think so) the FED needs to be exposed, flayed and slain. At the very least, not empowered even more. The FED is acting in the interests of only a precious few. If you are part of that tiny fraction of the whole, good on ya. But for Volcker to think the power of the FED needs enhanced tells me that there is only one segment of society he gives a hoot about. And those people don't need one more red cent. Volcker is vaunted as some kind of guru, but I beg to differ.

He also said that taking powers away from the FED is not advisable.

That did it as far as I’m concerned. Anyone who thinks Bernanke or Greenspan is competent, has done a yeoman’s job and disregards their prior monumental policy errors (and there are some here who think so) the FED needs to be exposed, flayed and slain. At the very least, not empowered even more.

The FED is acting in the interests of only a precious few. If you are part of that tiny fraction of the whole, good on ya. But for Volcker to think the power of the FED needs enhanced tells me that there is only one segment of society he gives a hoot about. And those people don’t need one more red cent.

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