[Nesster]

In using your example, what is the key signal for risk for people with that much leverage? When I was in real estate we watched LIBOR and interest rates like a hawk. That was our guide. I would buy a home at pre-construction pricing from a builder and then lease it back to him to use as a model home. He had it off his books and I had a revenue stream and a property. I would hold the home no more than a year depending on the lease that the contractor wanted. At one point we had 8 properties. I am somewhat familiar with the financing that was going on.

I was talking about investment banks and how they operate(d). The margins are much greater there - and in hedge funds etc - than elsewhere.

Basically there are rates to look at - repo spreads, default swap rates - that tell what the street thinks about a given bank.

[jeffkrol]

? When I was in real estate we watched LIBOR and interest rates like a hawk.

good thing too (snicker) since all those "capitalists" are so trustworthy.. err skip that....

Barclays Libor scandal: live
David Cameron says Barclays has "serious questions to answer" over Libor fixing and George Osborne describes the scandal as a "shocking indictment" of the banks amid calls for the bank's chief executive Bob Diamond to resign.

Barclays Libor scandal: live - Telegraph

Who needs stinking regulations..

LONDON -- "Done ... for you big boy," read a message sent by a Barclays banker to one of the lender's traders, who had asked him to fix a key lending rate artificially low.

"Dude, I owe you big time! Come over one day after work and I'm opening a bottle of Bollinger," a trader from another firm emailed a banker at Barclays, showing his thanks for the rate set artificially low.

UK-based Barclays has agreed to pay $453 million in fines to UK and U.S. regulators to settle its part of an investigation into whether banks manipulated the London Interbank Lending Rate, know as Libor.

Investigators were helped by extensive emails and other messages about Libor, a set of benchmarks designed to indicate the rate at which banks estimate they are able to lend to each other. Libor is used to set corporate and personal borrowing rates worldwide.
Requests came in such as: "We need a really low 3m fix, it could potentially cost a fortune. Would really appreciate any help."

And: "Your annoying colleague again ... Would love to get a high one month. Also if poss a low three month ... if poss ... thanks."

Traders made their requests in person, via email and through electronic "chats" over an instant messaging system.

On a few occasions, some traders even made entries in electronic calendars to remind themselves what requests to make of Barclays' Libor submitters the next day.

One trader would shout across the desk to make sure other traders had no conflicting preference to ask the Libor submitters.

"The traders were barking orders like they were at a fast food drive-through and the submitters were so accommodating that they might as well have said, 'do you want fries with that'," said Bart Chilton

'Done ... for you big boy;' How emails nailed Barclays - Bottom Line

[Winder]

Countrywide issued VIP loans to buy influence, report says - Jul. 5, 2012

The report said that Countrywide tried to use its influence on Capitol Hill to bolster support for Fannie Mae, with which it had established a special relationship.

Fannie gave volume discounts on fees to Countrywide in exchange for the right to buy most of the mortgage loans it originated. Many of the risky loans defaulted, however, which generated billions of dollars in losses for Fannie.
"Other than Countrywide, no other entity's employees received more VIP loans than Fannie Mae," Issa said in a release. "These relationships helped Mozilo increase his own company's profits while dumping the risk of bad loans on taxpayers."

[Winder]

good thing too (snicker) since all those "capitalists" are so trustworthy.. err skip that....



Barclays Libor scandal: live - Telegraph

Who needs stinking regulations..


'Done ... for you big boy;' How emails nailed Barclays - Bottom Line

You realize that what was done was illegal right? That means that there were regulations in place. Regulations don't stop people. Just like making drugs illegal does not solve the drug problem.

Where do most bank regulators come from? Most of them get the experience needed to be a bank regulator by working for a bank for several years. Bankers regulate bankers. Between golf trips and happy hour I'm sure the regulators keep a close eye on the action.

[jeffkrol]

You realize that what was done was illegal right? That means that there were regulations in place. Regulations don't stop people. Just like making drugs illegal does not solve the drug problem.

Actually it does give recourse when broken.. no regs.. no recourse.......your "system" offers no recourse but painful resetting after all damage is done.. And the other problem...

"regulations w/ no enforcement money or personnel is a "free choice" of the political system.. not an inherent failing of regulations..

[jeffkrol]

Countrywide issued VIP loans to buy influence, report says - Jul. 5, 2012

The report said that Countrywide tried to use its influence on Capitol Hill to bolster support for Fannie Mae, with which it had established a special relationship.

Fannie gave volume discounts on fees to Countrywide in exchange for the right to buy most of the mortgage loans it originated. Many of the risky loans defaulted, however, which generated billions of dollars in losses for Fannie.
"Other than Countrywide, no other entity's employees received more VIP loans than Fannie Mae," Issa said in a release. "These relationships helped Mozilo increase his own company's profits while dumping the risk of bad loans on taxpayers."

AGAIN failure of admin.. not regulations.. You attitude is "defeatist" and frankly not very wise.......

[jeffkrol]

You realize that what was done was illegal right? That means that there were regulations in place. Regulations don't stop people. Just like making drugs illegal does not solve the drug problem.

Where do most bank regulators come from? Most of them get the experience needed to be a bank regulator by working for a bank for several years. Bankers regulate bankers. Between golf trips and happy hour I'm sure the regulators keep a close eye on the action.

IMF Report (obviously not my frenimy...)

Statement by the IMF Mission to The United States (Text) - Businessweek

Good progress has been made in reforming the U.S. financial system, but vulnerabilities remain and appropriate resources should be devoted to complete and implement the new regulatory framework and monitor systemic risk.

Aggressive implementation of the measures proposed by the Administration to speed up the housing recovery could yield sizable benefits to the broader economy.

On the domestic front, failure to reach an agreement on near-term tax and spending policies would trigger a severe fiscal tightening in 2013, threatening the recovery. A fiscal consolidation of around 4 percent of GDP in 2013 (in line with current law) could reduce annual growth to well below 1 percent, with negative growth early next year and significant negative repercussions on an already fragile world economy.

Oddly supportive of my "liberal" positions.........

I left out Eurocontageon since it beyond domestic control.. except to annex EU