The Fed Just Acknowledged Its Too Big To Jail Policy

a reply to: AlaskanDad

Maybe money should not be loaned is the moral here.

Cash is nice and all but without credit nothing really goes anywhere. Business doesn't expand. In particular, small business.

a reply to: Phage

Do you have definitive proof of this, or is that just an opinion of yours?

originally posted by: Phage
a reply to: jacobe001

Is it ok if you loan me 10,000 Bucks on Tuesday and I'll pay you back with 10,000 bucks you gave me earlier earmarked for a different cause.

Are you blaming the banks or the government? But maybe you should look at more recent information.
www.washingtonpost.com...

What do you think would have happened if the banks had not been provided capital? Do you think the recession would have not been as bad as it was?

Unlike you, I don't differentiate two different teams where you have the Government on one side and the Big Banks on the other side. They exist together in a cozy and crooked sort of way.

We could talk about the Wall Street - Government revolving door.
We could also talk about how there are 10 Banking Lobbyists for every congressman.
We could also take about the record amount of money the Banking sector showers on Politicians on both "teams"

But most already know and are well aware of the corrupt financial industry we have in this country.

a reply to: AlaskanDad
It's an opinion backed up with observation, experience, and data. You have a small business or have an idea for one. You have an idea about how to expand or start it. You don't have the capital to do so. You have three choices:

1) If your business is running you can keep making the profit you are making and save the money to make the expansion while the market changes and your competition continues.

2) You can look for investors who will expect to collect some of all of your future profits (probably on a prorata percentage basis).

3) You can take out a loan which charges less interest than you expect to increase your profits by in order to implement your plans. A loan which you will know exactly how much will cost you and how long it will take to pay off.

It's a business decision. Yes, it takes some planning and thought but it's nice to have several options to choose from, isn't it?

a reply to: jacobe001

But most already know and are well aware of the corrupt financial industry we have in this country.

Yes. But what do you think would have happened if the banks had not been provided capital? Do you think the recession would have not been as bad as it was?

a reply to: Phage

otoh- Bank / IMF loans destroy nations, companies and families.

As for loans being necessary; that is hard to prove as we live in a society that is bearing the debt of loans and borrowing and we have never seen otherwise.

a reply to: AlaskanDad

As for loans being necessary; that is hard to prove

No it isn't.
The fact I am living in a house for which the deed bears my name is proof. I wouldn't be here if it wasn't for a loan.
The fact that very many profitable business are carrying loans is proof.


(how's that compounded interest loan research working out?)

originally posted by: Phage
a reply to: jacobe001

But most already know and are well aware of the corrupt financial industry we have in this country.

Yes. But what do you think would have happened if the banks had not been provided capital? Do you think the recession would have not been as bad as it was?

It would have been worse, but I don't see any other way for the engineers behind the exotic instruments of their creation, robo signing and other immoral and fraudulent actions to reap the consequences of their actions.

Instead they got bailed out with the usual bonuses on top of it.

It is not over yet either where the Banks in collusion with the government continue to prop up the markets with QE Infinity and god knows what else they are doing in secrecy.

a reply to: jacobe001

It would have been worse

I agree.
So bitching about it is sort of pointless.

a reply to: Phage

It was me who brought up the compound interest issue and I answered that on page 2.

originally posted by: MarsKingAQuestion
a reply to: Phage

Compound interest: Monthly amortized loan or mortgage payments

Monthly amortized loan or mortgage payments
See also: Mortgage calculator § Monthly payment formula

The interest on loans and mortgages that are amortized—that is, have a smooth monthly payment until the loan has been paid off—is often compounded monthly. The formula for payments is found from the following argument.
Exact formula for monthly payment

An exact formula for the monthly payment is

P= \frac[Li][1-\frac[1][(1+i)^n]]

or equivalently

P= \frac[Li][1-e^[-n\ln(1+i)]]

This can be derived by considering how much is left to be repaid after each month. After the first month L_1=(1+i) L - P is left, i.e. the initial amount has increased less the payment. If the whole loan was repaid after a month then L_1=0 so L=\frac[P][1+i] After the second month L_2=(1+i) L_1 - P is left, that is L_2=(1+i)((1+i)L-P)-P. If the whole loan was repaid after two months L_2=0 this gives the equation L = \frac[P][1+i]+\frac[P][(1+i)^2]. This equation generalises for a term of n months, L = P \sum_[j=1]^n \frac[1][(1+i)^j] . This is a geometric series which has the sum

L=\frac[P][i]\left(1-\frac[1][(1+i)^n]\right)

which can be rearranged to give

P= \frac[Li][1-\frac[1][(1+i)^n]]=\frac[Li][1-e^[-n\ln(1+i)]]

This formula for the monthly payment on a U.S. mortgage is exact and is what banks use.

In Excel, the function PMT() function is used. The syntax for the PMT function is:

= - PMT( interest_rate, number_payments, PV, [FV],[Type] )

See office.microsoft.com... for more details.

For example, for interest rate of 6% (0.06/12 p.m.), 25 years * 12 p.a., PV of $150,000, FV of 0, type of 0 gives:

= - PMT( 0.06/12, 25 * 12, 150000, 0, 0 )

= $966.45 p.m.

Online Compound Interest Calculator

originally posted by: Phage
a reply to: AlaskanDad

As for loans being necessary; that is hard to prove

No it isn't.
The fact I am living in a house for which the deed bears my name is proof. I wouldn't be here if it wasn't for a loan.
The fact that very many profitable business are carrying loans is proof.


(how's that compounded interest loan research working out?)

Loans allow them to inflate the price so that you can be indebted to them for many years and every third party involved can take a cut of the money as well.

High College Loans, Medical Bills, and Housing Prices would all drop like a stone in accordance with market principles if the Banks and Insurance Companies got out of the loan business and the lobbyists were booted out of DC.

The most Anti Free Market institutions we have in this country exist on Wall Street and in the Big Multinational Corporations that run to DC to pass bills they write up to favor them over everyone else.

originally posted by: Phage
a reply to: jacobe001

It would have been worse

I agree.
So bitching about it is sort of pointless.

No, talking about it all the time keeps it fresh in everyone's mind and should never be forgotten.

a reply to: MarsKingAQuestion
Your source:

Compound interest is interest added to the principal of a deposit or loan so that the added interest also earns interest from then on. This addition of interest to the principal is called compounding.

Compounded interest charges interest on interest. That is not what amortization does. Amortization first pays off the accrued interest. The remainder of the payment pays against the principle. Interest is not accrued against accrued interest because there is no accrued interest.

originally posted by: AlaskanDad
a reply to: Phage

otoh- Bank / IMF loans destroy nations, companies and families.

As for loans being necessary; that is hard to prove as we live in a society that is bearing the debt of loans and borrowing and we have never seen otherwise.

Many IMF type "loans" are forms of economic insurgency.

a reply to: Phage

I bought my house without any bank loans, you chose to pay interest to a bank. How is that proof of bank loans being a necessity?

I have no idea why you've asked me:

(how's that compounded interest loan research working out?)

care to elaborate?

My mother just said, jail them all and throw away the key. Don't even feed them. I say jail them and feed them, but they won't like what they get to eat!

a reply to: AlaskanDad

I bought my house without any bank loans, you chose to pay interest to a bank. How is that proof of bank loans being a necessity?

It was a necessity for me. I have never had enough cash to purchase a home and rental rates in my locale are close enough to loan payments to make it more practical to carry the mortgage since I can write off the interest portion. My mortgage is a low cost investment which will pay off because I am increasing my equity instead of helping someone else pay off their loan.

a reply to: AlaskanDad
Sorry.
Lost track of my replies.

a reply to: jacobe001
Vigilance is good.

projects.propublica.org...

Failed Bailout Investments

Below is a list of all companies that failed to repay their bailout money. These transactions are final and will never result in a profit for taxpayers.

Investments that might still turn a profit are not listed here. Also not listed here are recipients of aid through TARP’s housing programs (like mortgage servicers and state housing orgs), since they received subsidies that were never intended to be repaid.

Name Type State Profit / Net Outstanding Disbursed Returned Dividends + Interest Warrants Other Proceeds

1st Financial Services Corp Bank (Public) NC -$7,139,052 $16,369,000 $8,000,000 $1,229,948 $0 $0
AB&T Financial Corp Bank (Public) NC -$2,173,585 $3,500,000 $965,721 $360,694 $0 $0
Anchor BanCorp Wisconsin Bank (Public) WI -$104,000,000 $110,000,000 $6,000,000 $0 $0 $0
Bank of George Bank (Private) NV -$1,388,060 $2,672,000 $955,240 $279,991 $48,709 $0
Blue Ridge Bancshares Bank (Private) MO -$564,957 $12,000,000 $8,969,400 $1,923,850 $541,793 $0
Blue River Bancshares Bank (Private) IN -$4,470,895 $5,000,000 $0 $529,105 $0 $0
Blue Valley Ban Corp Bank (Public) KS -$275,525 $21,750,000 $21,263,017 $211,458 $0 $0
Bridgeview Bancorp Bank (Private) IL -$24,440,526 $38,000,000 $10,450,000 $2,393,155 $716,319 $0
Cadence Financial Corp Bank (Public) MS -$2,015,937 $44,000,000 $38,000,000 $3,984,063 $0 $0
Carolina Trust Bank Bank (Public) NC -$5,548 $4,000,000 $3,362,000 $613,320 $19,132 $0
Cascade Financial Corp Bank (Public) WA -$21,291,100 $38,970,000 $16,250,000 $1,428,900 $0 $0
Central Federal Corp Bank (Public) OH -$3,612,882 $7,225,000 $3,000,000 $612,118 $0 $0
Central Pacific Financial Corp Bank (Public) HI -$59,963,109 $135,000,000 $71,922,503 $2,362,500 $751,888 $0
Central Virginia Bankshares Bank (Public) VA -$7,584,344 $11,385,000 $3,350,000 $450,656 $0 $0
Centrue Financial Bank (Public) MO -$21,355,222 $32,668,000 $10,739,088 $571,690 $2,000 $0
Chrysler Auto Company MI -$1,315,061,737 $10,748,284,222 $7,256,590,642 $1,171,263,942 $0 $1,005,367,901
CIT Group Bank (Public) NY -$2,286,312,500 $2,330,000,000 $0 $43,687,500 $0 $0
Citizens Bancorp Bank (Private) CA -$10,176,429 $10,400,000 $0 $223,571 $0 $0
Colony Bankcorp Bank (Public) GA -$1,519,911 $28,000,000 $21,680,089 $3,990,000 $810,000 $0
Community First Inc Bank (Private) TN -$10,082,487 $17,806,000 $5,350,703 $1,908,453 $464,357 $0
Community West Bancshares Bank (Public) CA -$1,258,860 $15,600,000 $11,181,456 $2,461,333 $698,351 $0
Dickinson Financial Corp II Bank (Private) MO -$58,593,142 $146,053,000 $79,903,245 $2,631,196 $4,925,417 $0
Farmers Capital Bank Corp Bank (Public) KY -$3,164,171 $30,000,000 $21,594,229 $5,166,600 $75,000 $0
First BanCorp Bank (Public) PR -$301,660,461 $424,174,000 $89,514,153 $32,999,386 $0 $0
First Banks, Inc. Bank (Private) MO -$175,186,740 $295,400,000 $105,742,353 $6,037,237 $8,433,670 $0
First Community Bank Corp of America Bank (Public) FL -$2,185,751 $10,685,000 $7,754,267 $744,982 $0 $0
First Federal Bancshares of Arkansas Bank (Public) AR -$9,929,375 $16,500,000 $6,000,000 $570,625 $0 $0
First Financial Service Corp Bank (Public) KY -$7,666,222 $20,000,000 $10,733,778 $1,600,000 $0 $0
First Intercontinental Bank Bank (Private) GA -$2,229,115 $6,398,000 $3,247,112 $757,453 $164,320 $0
First Place Financial Corp Bank (Public) OH -$65,917,905 $72,927,000 $0 $7,009,095 $0 $0
First Reliance Bancshares Bank (Private) SC -$2,354,941 $15,349,000 $10,327,021 $2,042,406 $624,632 $0
First Security Group Bank (Public) TN -$16,684,638 $33,000,000 $14,912,862 $1,402,500 $0 $0
First Sound Bank Bank (Public) WA -$3,369,056 $7,400,000 $3,700,000 $330,944 $0 $0
First Southwest Bancorporation Bank (Private) CO -$140,227 $5,500,000 $4,900,609 $207,327 $251,837 $0
FNB United Corp Bank (Public) NC -$38,760,766 $51,500,000 $10,149,929 $2,589,305 $0 $0
FPB Bancorp Bank (Public) FL -$5,526,112 $5,800,000 $0 $273,888 $0 $0
General Motors Auto Company MI -$11,410,472,582 $50,744,648,329 $38,640,015,146 $694,160,600 $0 $0
Gregg Bancshares Bank (Private) MO -$779,810 $825,000 $0 $45,190 $0 $0
Hampton Roads Bankshares Bank (Public) VA -$74,556,392 $80,347,000 $3,279,764 $2,510,844 $0 $0
Highlands Independent Bancshares Bank (Private) FL -$534,688 $6,700,000 $5,547,600 $617,712 $0 $0
Hyperion Bank Bank (Private) PA -$214,834 $1,552,000 $983,800 $327,666 $25,700 $0
Idaho Bancorp Bank (Private) ID -$6,775,695 $6,900,000 $0 $124,305 $0 $0
Integra Bank Corporation Bank (Public) IN -$81,635,660 $83,586,000 $0 $1,950,340 $0 $0
Legacy Bancorp Bank (Community Development) WI -$5,142,921 $5,498,000 $0 $355,079 $0 $0
Marine Bank & Trust Company Bank (Private) FL -$653,787 $3,000,000 $2,010,000 $235,713 $100,500 $0
Marquette National Corp Bank (Private) IL -$1,664,053 $35,500,000 $25,313,186 $7,072,590 $1,450,171 $0
Maryland Financial Bank Bank (Private) MD -$832,754 $1,700,000 $527,000 $313,471 $26,775 $0
Midtown Bank & Trust Company Bank (Private) GA -$1,651,863 $5,222,000 $3,133,200 $275,104 $161,833 $0
Midwest Banc Holdings Bank (Public) IL -$88,563,712 $89,388,000 $0 $824,288 $0 $0
Monarch Community Bancorp Bank (Public) MI -$1,976,879 $6,785,000 $4,545,202 $262,919 $0 $0
Naples Bancorp Bank (Private) FL -$3,043,934 $4,000,000 $600,000 $356,066 $0 $0
National Bancshares Bank (Private) IA -$3,192,912 $24,664,000 $18,318,148 $2,307,492 $845,448 $0
Northern States Financial Corp Bank (Public) IL -$10,768,828 $17,211,000 $6,023,850 $418,322 $0 $0
Old Second Bancorp Bank (Public) IL -$41,576,763 $73,000,000 $25,547,319 $5,769,027 $106,891 $0
Pacific Capital Bancorp Bank (Public) CA -$26,561,211 $195,045,000 $165,983,272 $2,107,396 $393,121 $0
Pacific Coast National Bancorp Bank (Public) CA -$4,101,913 $4,120,000 $0 $18,087 $0 $0
Pacific Commerce Bank Bank (Public) CA -$1,018,330 $4,060,000 $2,519,960 $387,223 $134,487 $0
Park Bancorporation Bank (Private) WI -$1,179,936 $23,200,000 $16,772,382 $4,351,643 $896,039 $0
Peoples Bancshares of TN Bank (Private) TN -$135,012 $3,900,000 $2,919,500 $723,263 $122,225 $0
Pierce County Bancorp Bank (Private) WA -$6,592,053 $6,800,000 $0 $207,947 $0 $0
Premier Bank Holding Company Bank (Private) FL -$9,032,588 $9,500,000 $0 $467,412 $0 $0
Princeton National Bancorp Bank (Public) IL -$22,811,595 $25,083,000 $0 $2,271,405 $0 $0
Provident Community Bancshares Bank (Public) SC -$3,626,609 $9,266,000 $5,096,300 $543,091 $0 $0
Regent Bancorp Bank (Private) FL -$1,226,982 $9,982,000 $7,970,737 $784,281 $0 $0
Ridgestone Financial Services Bank (Private) WI -$1,269,893 $10,900,000 $8,876,677 $277,223 $476,207 $0
Rogers Bancshares Bank (Private) AR -$24,261,979 $25,000,000 $0 $738,021 $0 $0
Santa Clara Valley Bank Bank (Private) CA -$178,674 $2,900,000 $2,440,379 $158,928 $122,019 $0
Santa Lucia Bancorp Bank (Public) CA -$868,889 $4,000,000 $2,800,000 $331,111 $0 $0
Seacoast Banking Corp Bank (Public) FL -$954,530 $50,000,000 $40,404,700 $8,585,770 $55,000 $0
Security Bancshares of Pulaski County Bank (Private) MO -$134,090 $2,152,000 $1,475,592 $449,073 $93,245 $0

I couldn't fit them all in here. See link for complete information.