'This American Life' Today: Awesome, & Why I'm Now + We Are Headed For A Depression

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Quote from ByLoSellHi:

Has anyone had a chance to listen to this yet? If so, what'd you think about the analysis of the different economists and bankers who commented?

I listened to this bylo. Very good link. This is how I understand that podcast. Yes the big banks are insolvent.
The TARP money is keeping the balance of asset and liability, and that appears solvent on paper.

No, they bank owners do not want to mark to market their assets because this is proof (on paper) of insolvency, and that will cause the big money depositors to do a bank run because they know they have no insurance of FDIC for most of their money.

But the banks can not loan that TARP money to make money on interest because if they do they can not cover their depositors money, (back to insolvency)
So their answer is to nationalize, fix them, sell again.

What happened to the bad bank idea for the toxic assets?

 

[ByLoSellHi]

I'm really glad a lot of you are listening to this.

As soon as it starts, you get hooked - it's like a very good book or movie in that respect.

They managed to make it extremely entertaining while also making it extremely illuminating, and the underlying subject matter is of a nature where that feat was hard to pull off.

I'm not ashamed to admit that I learned alot when they discusses a bank's balance sheet, and how it's counter-intuitive to the way we think of a normal balance sheet of most businesses.

That part allowed me to understand why there's no way for biggest bank to replenish their capital - it will just keep getting decimated over and over again.

 

[stock_trad3r]

this american life is for noobs

buy goog, ma v, pot and stuff like that

 

[trendlover]

Quote from ByLoSellHi:

I'm really glad a lot of you are listening to this.

As soon as it starts, you get hooked - it's like a very good book or movie in that respect.

They managed to make it extremely entertaining while also making it extremely illuminating, and the underlying subject matter is of a nature where that feat was hard to pull off.

I'm not ashamed to admit that I learned alot when they discusses a bank's balance sheet, and how it's counter-intuitive to the way we think of a normal balance sheet of most businesses.

That part allowed me to understand why there's no way for biggest bank to replenish their capital - it will just keep getting decimated over and over again.

I know this is too simple, but if a bank lower the interest they give to depositors, of the same time they raise interest to their loan they sell, then this brings more capital to the bank right? So if they sell the bad morgages on the books very cheap (ok they take loss) but the higher interest on a new loan will help with the loss.) And if the new morgage is very cheap, then more buyers. With more buyers comes more loan. And the loan has higher interest for the bank. This will start a housing buying again, and the house price will appreciate again over time.

 

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Quote from stock_trad3r:

this american life is for noobs

buy goog, ma v, pot and stuff like that

All those stocks only good if the banks work.

 

[bronks]

What good is the ignore feature if I can still see stockcrappers (King of Tools) idiotic reply when quoted by someone else?

 

[misterno]

Quote from gangof4:

you're missing the point (or ignoring it). in a desperate grab for attention (or in doing your job for Baron... whatever), you start a million threads with the same premise. hence, actually turning off people who agree with you.

start a thread titled something to the effect of 'we're all fucked, here's why' and post all this shit in one thread.

there is NO REASON to oppose this suggestion unless:

a. you're an attention whore

or

b. you're paid by the thread.

I have never heard this before

what does attention whore mean?

 

[ByLoSellHi]

Quote from misterno:

I have never heard this before

what does attention whore mean?

It means his mom was quite loose when he was a little one, and it hurt him psychologically.