Comments on: Banking spins destruction myth: Hoocoodanode? Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 By: Wes Schott Thu, 11 Dec 2008 19:46:38 +0000 This has happened before – Long Term Capital Management in 1989. ss/07ltcm.html?pagewanted=1

I’ve been reading about the potential blow-up of RMBS dervatives and CDS for the last couple of years.

These are all poor excuses by, apparently, overpaid frat boys deflecting the blame at our expense.

How could anyone see a 1000 year return period event coming? What a bunch of hooey.

By: Ray Wed, 10 Dec 2008 13:09:10 +0000 Hoocoodanode? According to Rubin “There was virtually nobody who saw that low-probability event as a possibility.” A low probability event is not a possibility? Give me a break! Lottery winners depend on it.

Rubin might have added that nobody can see any particular fire breaking out in California at any particular place at any precise moment in time. Or any particular earthquake occurring at any particular time. Or any particular person getting killed in an auto accident at any particular time on any particular road.
So why don’t we just abandon fire departments and traffic laws and anti-earthquake building codes? No need for regulation particularly when there is so much money to be made as a result of those “disasters.”
Getting rid of the regulations would make various people billions of dollars and that’s just good business! And when “low probability” events happen on a regular basis? Hoocoodanode? I was too busy pack ratting away my profits.

By: Brian Bell Wed, 10 Dec 2008 03:22:33 +0000 Robert Rubin, CEO’s, managers and directors have been paid obscene amounts of money (especially in the banking and finance sector. Much of the efforts have been in shifting risk from the suspecting to the unsuspecting. It has then been leveraged upwards to increase the return.

But Mr Rubin and his ilk need to be reminded that with those higher incomes comes responsibility – both good and bad. Very few managers, directors or CEO’s appear to have accepted that responsibilty for the destruction of wealth in both their client’s portfolios or indeed their own firms by resigning or at least offering to resign.

This applies to all leaders. Instead you and I, the taxpayer, are being asked to wear that pain so that they can survive intact.

No ,Mr Rubin, this is your fault and you should resign with your reputation damaged as it should be. Greed and avarice are forever present. Those who succumb to its charms must now pay the piper.

By: Youri Carma Tue, 09 Dec 2008 02:39:43 +0000 The problem is leverage, when you want to ease the transition to the next expansion not possible when not fully deleveraged and no collateral.

Angela Merkel the Federal Chancellor of Germany doesn’t like “Cheap Money” and ” re-flation ” either. She thinks that the re-flation only will last for 5 years before another crises emerges. I think she’s even more on the more positive side than I am. I expect three years max.

Bernanke already admitted himself that he does like dog food; ” such as buying Treasury securities “. Lower interest “certainly feasible”. “Quantitative easing”, no problem! A very chique word for “Who can blow the biggest bubble” .“ Longer-term Treasury or agency securities”; what a illuminating idea, that I didn’t think of this myself. Now we can not only bankrupt a first generation but with 100 years loans we bankrupt the second generation as well.

By: Larry Mon, 08 Dec 2008 12:40:07 +0000 Very good article except you missed the real myth here: The Crisis itself.

All these companies bought mortgage backed securitues, securiteis and bonds backed by student loans and credit card balances. Where did all that money go.

They act like somene burned huge piles of money in the streets. If you gave a mortgage loan and sold it as a security then you got your money back. Only the companies that gamble on a security increasing in value lost money. Why are we bailing out AIG who is gambling off people’s insurance policies and retirement accounts on risky assets with little or no assets to back them. We are staking the compulsive gambler so they can continue business as usual.

American Express became a bank because it is the first year they could not sell bonds backed by payments due. So they are selling a bogus asset that if you dont make your payments the bond is worthless. This should not be legal and the companies that risk millions on such assets need to lose this money so they will stop risking it on this crap.

Rather than give the FHA the Billions to give mortgage loans and refinance mortgages and give the small business administration money to loan, and issuing hybrid vehicle loans we give the money to these gamblers that buy and sell risky assets, this is a heist.

It is so unbelievable that the world is suddenly broke. This is a scam.

By: Rick in Atlanta Mon, 08 Dec 2008 12:19:34 +0000 Your opinion piece was a good one but it and many of the comments that followed lack a context.

The context that I offer is “The End” by Michael Lewis at If the name seems familiar, it’s because he wrote a book, Liar’s Poker, about the games on Wall Street in 1989. The situation then was pretty much the same as it was 20 years later but much, much worse. tional-news/portfolio/2008/11/11/The-End -of-Wall-Streets-Boom

If you’re not terrified by Lewis’ brief article, I would be surprised.

By: Phillip Wolfe Mon, 08 Dec 2008 03:58:21 +0000 Based on academic training and field experience, I disagree with Saft’s hyothesis in his fourth paragraph that “It’s just that the data we put into the models only covered the boom years.” ; and also disagree with the Best Comment, “..Evoking the image of a 1000 year cycle blah blah blah”. I recall from college and real corporage experience that financiers, bankers, economists, and academists have long known, taught, and experienced the proper asset/debt ratios; including the experience of boom-bust cycles starting with the depression. So give us readers a break.

My 83 year old father has been selling real estate for over 50 years and predicted this 10 years ago. As a result got out of the business because of he perceived as a syndicate of real estate brokers + appraisers + mortgage brokers all in “cahoots” to inflate the price of homes; and bankers for easy money. In his day, the CalVet loan program in California was the only way to get a home loan…or perhaps FHA.

When he got out of the business he asked me; “Son, Why would anyone in their right mind put their $400,000 investment in the hands of lightly trained real estate brokers, mortgage brokers and bankers?, after being in business for over 50 years its time to get out – there are too many amateurs in a high dollar business and that spells trouble – greed!”

So this is nothing new. Perhaps the decision makers have poor memories.

Phillp Wolfe

By: desik Mon, 08 Dec 2008 02:56:07 +0000 We not only need to reform and better regulate banking and the financial sector we also need to wake up and evolve mechanisms that enable us to take urgent steps to better regulate our Governments and make sure they are more accountable as the ease with which the banking oligarchs were able to fleece trillions in public money for their own ends from politicians also caught with their snouts in the trough or sleeping on the job is only matched in pure audacity by the free rein industrial oligarchs have been given to rape, pollute and devastate the planet for personal profit.

By: kelly p Mon, 08 Dec 2008 02:37:33 +0000 Hoocoodanode! Sounds like the name of a good whiskey we could use to help get through this. That James Saft dude sorta looks like a whisky sipper.

By: john Mon, 08 Dec 2008 02:32:49 +0000 “There was virtually nobody who saw that low-probability event as a possibility.”
So Mr Rubin thinks incompetence is an acceptable excuse for failure ?
A buddy of mine who works in finance warned me 2 years ago things were going to get very rough.