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Why do YOU hate the fed?

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posted on Apr, 3 2010 @ 12:04 AM
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reply to post by GreenBicMan
 


They needed uncle sam to cover the cost of the failed CDSs issued by AIG.

They also needed an injection of capital and "confidence," (apparently), which is why GS sold a lot of preferable shares to Warren Buffet. According to buffet, GS needed a buyer to step in and prove that the bank was still sound.

Whether they needed the bailout or not, who knows. They managed to pay it back, though -- and they had to do things like issue new shares in order to raise enough money to do it. So, they probably did legitimately need the capital.




posted on Apr, 3 2010 @ 12:04 AM
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reply to post by GreenBicMan
 



Banks like JP and GS did not really need this money.


Who else got the Money?


Actually the USA made out like bandits on this because of the interest payments we received. Again, blame your congress for not filling you in on CITI and all that. Do you know how much we made off of GS?


Who is this "We", that you Speak of.... when you describe profit off of GS?


Is it the "WE" whose currency was just devalued?


Or is it the "WE" who lost millions of Jobs?


The government gave billions of dollars to several large corporations, so that they could buy BANKS for themselves...

And they keep the banks.



Why is this a good idea?


-Edrick



posted on Apr, 3 2010 @ 12:06 AM
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reply to post by Edrick
 


They paid it back + interest, so the treasury got extra money back from it's original cost to the tax payer. That extra money will go towards paying for schools/police/roads/defense, etc.. it's tax dollars, now.



posted on Apr, 3 2010 @ 12:08 AM
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reply to post by Kaytagg
 



They paid it back + interest, so the treasury got extra money back from it's original cost to the tax payer. That extra money will go towards paying for schools/police/roads/defense, etc.. it's tax dollars, now.



So, when a Large Bank Fails... The Taxpayers must give that bank enough money to BUY OTHER BANKS?


Seriously....


-Edrick



posted on Apr, 3 2010 @ 12:15 AM
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reply to post by Kaytagg
 


I think they had to raise capital by issuing new shares. I do not think there was any way around this. This was due to the new regulations on banks having different reserve requirements.

You (not you) can't tell me that GS needed that coin.

This was just our generational buying opportunity that we (I) missed because of no capital. I would be quite surprised if we go one tick below Dow 9000 anytime too soon.



posted on Apr, 3 2010 @ 12:17 AM
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reply to post by Edrick
 


I'm just as outraged as you are..

again, though, this is a failure of the market and private business; it has nothing to do with the fed. The agencies that rated the mortgage securities triple-A are private businesses that operate in the free market, so are the businesses that helped make the loans, provided the insurance on the loans, invested in the securities, etc. It was all the "Free market," which was suppose to be smart enough to see this coming and not let it happen... but they didn't.

So after they destroyed the world's economy, they gave us the option of "let us fail and everything grinds to a stop, the US and dollar collapses, the US economy undergoes capital flight, everything collapses; OR, you pay for our mistakes, and if you dare to try to change anything we scream 'socialism, government takeover.' The only happy part to come out of this story is that most of the banks were able to repay the money. The unhappy part is that nothing fundamentally changed about the way they do business, so this is all going to happen again.. Lets just hope they can at least repay us NEXT TIME we bail them out.

[edit on 3-4-2010 by Kaytagg]



posted on Apr, 3 2010 @ 12:20 AM
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reply to post by Edrick
 


Without proper unwinding, yes.

If we would have propped up Lehman Bros. you would have a different outlook. Paulson messed up there IMO as many other financial professionals feel the same way that I have spoken to.

It is not ideal, but it is better than having no electricity for a fortnight or two and catching fish in the pond for food. All of you guys calling for devastation couldn't handle winter without heat either I am guessing. Most do not understand what they are calling for. Most Americans are straight up idiots though, prob. the same way in most other countries as well.

Don't think that wouldn't happen if DOW went too much further down under 5000 or so. There is no such thing as anything under DOW 5000 IMO because that might as well be 0.



posted on Apr, 3 2010 @ 12:29 AM
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reply to post by Kaytagg
 



again, though, this is a failure of the market and private business; it has nothing to do with the fed.


You mean the problem of the Banks not having enough money to cover their loans?


This could only happen if they are loaning something that does not exist.


Hence... The FED.


The agencies that rated the mortgage securities triple-A are private businesses that operate in the free market, so are the businesses that helped make the loans, provided the insurance on the loans, invested in the securities, etc. It was all the "Free market," which was suppose to be smart enough to see this coming and not let it happen... but they didn't.


You mean... OOPS, the Banks just made some REALLY BAD investment decisions with money that was NOT THEIRS, and they LOST IT!


That is what they were not smart enough to see?


So, the response is to give the Investment Banks enough money to PURCHASE BANKS?


The ones who LOST THE MONEY in the first place, were given enough money to PURCHASE *FUNCTIONAL* BANKS.... suddenly have a profit to pay back their loan....


How Conveniently Interesting...

-Edrick



posted on Apr, 3 2010 @ 12:34 AM
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reply to post by GreenBicMan
 



Without proper unwinding, yes.


Are you responding to something I typed?

I don't see the connection, could you quote what question your answering?

Thanks

-Edrick



posted on Apr, 3 2010 @ 12:42 AM
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reply to post by Edrick
 


I can't explain the failure of the market, other than to say that the market is not infallible, does not account for externalities -- such as systemic risk -- and that there is plenty to be outraged about, but the Federal Reserve shouldn't even be on the list, as they really didn't do anything to cause this to happen. It was a failure of wallstreet, the banks, the lending institutions, the financial engineers, the borrowers, etc.

If anything, it shows you that some regulation is necessary -- because, without it, corporations will conceivably destroy (not only themselves, but) us all.



posted on Apr, 3 2010 @ 12:55 AM
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This past year or 1.5 years has just been a really good lesson in why the Black Scholes Model does not work in reality with a large enough sample - or only works in hypotheticals.

We just hit that "nth" sigma two times in 1.5 years with elongated overextended rallies and declines.

Although if you do not think the market is efficient you would be most likely kidding yourself. If you do not think it is efficient you should try to program some risk adjusted cross currency/security arbitrage programs. Let me know how far you get.



posted on Apr, 3 2010 @ 12:59 AM
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reply to post by Kaytagg
 



I can't explain the failure of the market, other than to say that the market is not infallible, does not account for externalities


The word you are looking for is "Risk"... yes, markets have it.


But what risk is there when you will be "Propped Up" by the government?


Sounds rather limited risk to me.




and that there is plenty to be outraged about, but the Federal Reserve shouldn't even be on the list, as they really didn't do anything to cause this to happen.


They certainly Bailed them out though...

You know, the ones who were repackaging bad derivatives into Triple Rated AAA Security Awesome Super Rated Bond! (with more trustworthyness)

Yeah.... they got Bailouts.


For making the Banking system crack....


THEY GOT BAILOUTS.


FROM THE FED.



Do you know what the word "Culpable" means?

-Edrick



posted on Apr, 3 2010 @ 01:02 AM
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reply to post by Edrick
 


Sorry relating to do you think us gov. should prop up a big bank failure..



posted on Apr, 3 2010 @ 01:06 AM
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reply to post by GreenBicMan
 



If you do not think it is efficient you should try to program some risk adjusted cross currency/security arbitrage programs. Let me know how far you get.


But that's what we use now.



The dollar was the "Reserve Currency" of the world.


At first, it was based on the gold standard, but then the gold standard was replaced by the Fiat system...


Which is NOT at a default value, and Can, and DOES fluctuate.


It is a security, because it is Trusted...

(Or was, at least)


IT was cross currency because the Dollar was valued at market value... in US government Bonds.

And Foreign markets would deal in dollars as well.


Our dollars value was based on the value of our trading partners currency...

Thus, it was cross currency.

-Edrick



posted on Apr, 3 2010 @ 01:13 AM
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reply to post by Edrick
 


Actually, Congress bailed them out with the TARP program. The fed just handles the technicalities of delivering the money to the treasury and adjusting inflation models to account for the increase in money and effects of delivering large capital injections to the banking system.



posted on Apr, 3 2010 @ 01:16 AM
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reply to post by Kaytagg
 


When my boyfriend filed my income taxes he said I owed the government $12 so I sent them a check.

The Feds found a mistake he made
and SENT ME A CHECK FOR $400.

So we are going on a little fishing trip to the Keys.

I hate the Feds for being honest and giving me the money I didn't even know I had.

What a country!



posted on Apr, 3 2010 @ 01:16 AM
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reply to post by GreenBicMan
 



Sorry relating to do you think us gov. should prop up a big bank failure..


Ok, thanks.


If we would have propped up Lehman Bros. you would have a different outlook. Paulson messed up there IMO as many other financial professionals feel the same way that I have spoken to.


Then why did we Bail them out?


It is not ideal, but it is better than having no electricity for a fortnight or two and catching fish in the pond for food. All of you guys calling for devastation couldn't handle winter without heat either I am guessing. Most do not understand what they are calling for. Most Americans are straight up idiots though, prob. the same way in most other countries as well.


Banks failing and Electrical Power Failure are not as intricately intertwined as you may believe.

-Edrick



posted on Apr, 3 2010 @ 01:18 AM
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reply to post by Edrick
 


You are not understanding me.

It is efficient because you cannot beat the efficiency that is continuously displayed tick after tick.

And by the cross currency/arb programs I mean something like this..

Sell Short

1. EUR USD

2. 10 Year Treasury Futures

Go Long

1. USD/YEN

2. Forward CL Futures (light sweet crude)


It is efficient because no matter how you hedge yourself or play it there is better than a 8 out of 10 chance you will either wind up exactly even or lose. Factor in your retail latency and make it 9 out of 10.



posted on Apr, 3 2010 @ 01:19 AM
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reply to post by Edrick
 


We didnt bail out Lehman, they failed brother.



posted on Apr, 3 2010 @ 01:19 AM
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reply to post by RabbitPictureGuy
 


Yes, they are critically intertwined. Again you are not understanding equity markets.

[edit on 3-4-2010 by GreenBicMan]



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