Agree. Tight credit big problem for economy. After the dot-com-bubble, German banks boosted "credit risk management procedures". Consequence : German small and medium companies suffered from credit crunch. End of the story : recession.
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Now why is the fed cutting rates?????
- Thread starter myminitrading
- Start date
Agree. Tight credit big problem for economy. After the dot-com-bubble, German banks boosted "credit risk management procedures". Consequence : German small and medium companies suffered from credit crunch. End of the story : recession.
Quote from number22:
That was the problem; banks didn't want to go under with their stupidities on lending; so they uses this excuse to drag any good business with them in the name of protecting the economy.
Today's banking system is pure monopoly; no wondering they hates the ideas about WalMart to operate its own banking.
Liquidities are tight; because no-one wants bank's worthless commercial paper; Banks lie about these paper.
its not the banks' papers, its the papers of the very Wallmarts, Home Builders, IBMs, Crysler, what have you. I think the biggest problem in our economy, at least in terms of fixed income markets, is the rating agencies. They have no clue about fair value and were often bitches to the banks that paid them good dollars to rate their structures. A lot of re-structuring of those "agencies" is needed. Its well known that if you could not make it for an i-banking job but still wanted to work in finance then join a rating agency and this I think is well reflected in the quality of people they employ and how diligently they perform their jobs.
Quote from IluvVol:
Are you really that stupid? Can you at least read otherwise its a huge waste of time to explain to you. Again: Companies have financed their short-term liquidity needs with commercial paper for decades. Investors do not buy commercial paper piece by piece they buy them packaged as securitized securities. Or do you want as investor to have to check the ratings, pricing sources and all this for each and every commercial paper? (There is lots of other reasons why this would be unfeasable but it would divert from the point). Now, those commerical papers are securitized but the problem right now is that there is no demand for those because of the most recent debacles in the credit markets and the lost faith in rating agencies. DOES THIS MAKE ANY SENSE AT ALL? I mean, if you dont know anything about this then why dont you simply admit but you come along and open your big wide mouth as if you are the top trader of a prop desk.
You sound like a wall steet sales man.
It is all illusion; company uses commercial paper to offset risks; banks uses commercial paper to lock in profits and charge hefty fees on these papers too; so insiders are winning in this game except the investors.
And about the rating agencies which many were internal organizations of banks years ago; there are compelling reasons to separating these business from banks. Two faces of the same coin.
And about the rating agencies which many were internal organizations of banks years ago; there are compelling reasons to separating these business from banks. Two faces of the same coin.
Quote from myminitrading:
You sound like a wall steet sales man.
I take this as a compliment. But I have nothing to sell. When you look back I did not even offer you my view other than saying that I believe we will have more credit related "issues" ahead of us. But every kid should know that.
Quote from number22:
It is all illusion; company uses commercial paper to offset risks; banks uses commercial paper to lock in profits and charge hefty fees on these papers too; so insiders are winning in this game except the investors.
And about the rating agencies which many were internal organizations of banks years ago; there are compelling reasons to separating these business from banks. Two faces of the same coin.
not true, fitch, standard and poors, and others have never been parts of banks. That would be a laughing joke. But I can asure you that was NEVER the case. The world is (fortunately, for those who admit to it) more complex than that.
Quote from myminitrading:
Thanks good luck with you fixed income.
Lol, and what makes you think that anyone here was on the other side of your trade?
You just embarress yourself with your total lack of knowledge. But hey, you made couple points today must be happy now. Will you treat yourself for a steak dinner tonight? LOL
Quote from IluvVol:
Lol, and what makes you think that anyone here was on the other side of your trade?
You just embarress yourself with your total lack of knowledge. But hey, you made couple points today must be happy now. Will you treat yourself for a steak dinner tonight? LOL
And here we go again. Now you get back on that phone and sell your paper, leave the trading to the pros.