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How Banks Got Too Big to Fail, MoJo

Category: Corporate Management, Data Analysis

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

17 Responses to “Big Bank Chart”

  1. Orange14 says:

    I’m now part of Wells Fargo but I think there were two earlier mergers of my original bank into First Union but it was a while back and I can’t remember the names other than the disgraced First American Bankshares.

  2. klhoughton says:

    Good thing the chart starts in 1990; otherwise, places like Sea(ttle) First would be feeders as well. (Strangely, the BofA c/o/r/p/o/r/a/t/e/ a/s/s/i/m/i/l/a/t/i/o/n/ training film mentions SeaFirst, but not SecPac, which was the actual feeder into the BofA–now NCNB–world.)

  3. wunsacon says:

    I wish everyone who claims to like capitalism would realize (if they don’t already) that what they like are the benefits from *competition*. Competition disappears when either the buyers or the sellers in any one market dwindle in number. And, because defining a “relevant market” seems to be as much of an “art” as it is a science, we the people are better served by active, kick-ass anti-trust enforcement than this shitstem of oligopolies we’re allowing in finance, media, energy, pharma, and telecom. (What did I miss??)

  4. Soylent Green Is People says:

    Missing the Wachovia / World Savings merger.

    I remember clearly when Norwest purchased Wells Fargo. Things worked out quite nicely for Norwest, but I learned that whenever Management said they were doing one thing, in fact they were doing the exact opposite. Since that merger the lesson for me was never trust anyone from the top floor who says “all is well”. We discovered a contrary landscape as time moved forward.

    My .02c

    Soylent Green Is People

  5. wunsacon says:

    Soylent Green from CR? The one who writes the haikus? [Gushing as I meet a celebrity]: “I love your work.” :-)

  6. zcwotun says:

    I wish more people would appreciate the context of the Mr. Potter/evil out-of-town banker v. George Bailey/Bedford Falls morality play that Capra set forth in “It’s a Wonderful Life.” It’s been replayed for the past twenty years as the mega money center banks gobbled up the big regionals.

    Funny how people can rant at Wal-Mart for destroying the mom and pops, but have no problem banking with the too big to fails.

  7. wunsacon says:

    My fav (

    Wise men said before
    “A rising tide lifts all boats”
    Not these submarines

    - Soylent Green is People

  8. Liminal Hack says:

    Entropy in action. Take a bunch of informationally sensitive debts – mortgages, commercial paper, credit cards, student loans etc. Pool them and then issue informationally *in*sensitive “money” on the other side of the balance sheet. Information is lost, money is created by a process of mixing.

    Then cross link such balance sheets with an insane volume of derivatives. More mixing. More money, less usable information.

    Not enough? Then as the graphic shows over time, merge those balance sheets. Mixing, mixing, mixing.


    where k is Boltzmann’s constant equal to 1.38062 x 10−23 joule/kelvin and W is the number of microstates consistent with the given macrostate.

  9. Petey Wheatstraw says:

    Chart should be titled “The Distillation of Insolvency”

  10. Soylent Green Is People says:


    The snickering by CR readers each Friday Failure is the best reward one could ever hope for. Many thanks for your kind words. Let’s hope this whole Kabuki dance ends sooner than later. That material’s kinda hard to structure within 5 min of every FDIC news release.


    Soylent Green Is People.

  11. constantnormal says:

    Quite a picture.

    One bank to rule them all, One bank to buy them,
    One bank to bring them all and in the darkness bind them.

  12. Orange14 says:

    @Liminal Hack – we could be approaching stasis where the change in Entropy approaches zero and you better keep an eye on the thermometer. If it stays stuck at a constant temperature, there really isn’t any hope of a good outcome (with apologies to Thomas Pynchon who already wrote about this in his wild youth).

  13. Liminal Hack says:

    Orange, the only problem about thermal equilibrium is that in the big picture, nothing interesting ever happens. Zoom in though and there is plenty of activity, just without any discernible pattern.

    Could be good or bad or neither I guess.

  14. drewburn says:

    I think the chart understates it; there were many more mergers over the time frame that aren’t shown. I remember Fleet bought Quick & Reilly. Wachovia bought AG Edwards. I’m sure there are dozens of small banks & borkers skipped in this.

  15. crawlars says:

    The big picture I get from inverting the graph is inflation.