U.S. banks told to make plans for preventing collapse

Indirect message to the public? Next round of bank repos? Or the money was made by the banks and its legitimately the time to file chapter 11?

U.S. regulators directed five of the country's biggest banks, including Bank of America Corp and Goldman Sachs Group Inc, to develop plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count on government help.

LINK
Your thoughts/comments/viewpoints/opinions please.

reply to post by hp1229


My thoughts, comments?

Whole lot of good that bailout and stimulus did, eh? The banks get even more help while the economy continues to lag behind and the good people of this country continue to suffer at the hands of a bunch of financial tyrants.

Maybe it is time for it all to come crashing down...

Originally posted by Dreine

Maybe it is time for it all to come crashing down...

I am starting to agree. Hopefully the next generation will learn from our mistakes. This form of greed is unacceptable and it is slowing evolution down. Nature will find a way to move on and I think in this case it might just need to fall apart, let us tear eachother apart for a few years, and try again.

reply to post by Dreine

Maybe it is time for it all to come crashing down...

Hear, hear - time to clear the rubble so we can rebuild something lasting and of better quality for ourselves. I'd even be willing to extend that to quite a few other things as well.

I don't look forward to an apocalyptic sort of situation, but I'm truly starting to believe it might be necessary to set right what has gone so tragically wrong in so many different areas.

The major banks have been preparing for a collapse for quite some time. I am forced to have an account with BOA for a few different reasons and for the last 8 months or so they have started to make sure there is one or two armed guards on duty at every branch.

They are prepared for a bank run.

I have also taken large sums of $100 bills to be broken into smaller denominations and they have not had more than $2000 on hand to fulfill my requests.

They do not have a great deal of cash on hand.

Also, loans have become much harder to get. Many investment banks are liquidating assets by selling them off to smaller investment firms and are pulling back on how much money they lend.

The # hit the fan a long time ago and we have only been surviving off of the forward momentum we had. But that momentum is all but gone.

I have been talking about this for some time and I am surprised we made it this long. Good luck to you all.....we are gonna need it.

reply to post by sheepslayer247


I agree with most of what you have said with the exception of the SHTF statement. The true SHTF won't happen until the momentum that is keeping the zombie economy moving forward comes to a complete stop. When the final trickle up hits wall street and there is truly nothing left to put back in, that is when people will finally realize that the game is over so to speak. After that happens the chaos will ensue. When people can't use their various cards any longer to make purchases, and banks close their doors because they have no more money to give the real SHTF will occur.

reply to post by Dreine


Starred

I agree, the current system is now and has been for 20 years beyond saving. We need to "iceland" the bankers and politicians and start over with absolute transparancy, this is the only way to keep everyone honest in a faith based financial system. The whole thing is crashing down because it is based on faith, and average people no longer have faith in it.

In the meantime they are teaching our kids in school that investing is the right thing to do in order to save money for the future.

My youngest comes home yesterday and says he learned something new in school today. He told me he learned that investing is a good thing to do in order to save for the future. He said they told him it will draw interest over time and his money will grow and he was all smiles as he looked at me saying this. Evidently, something they said made it pretty believable to him.

It is sad that I had to tell him, sure invest if you want your money taken, never to be seen again. Then I reminded him of the big banking scandal that put half the world in poverty and reminded him of the 99% and the 1% and then reminded him of Occupy and Anonamous and what they were all fighting for and against, and Bernie Madoff and all the other stories that will go down in history and be told, time and time again, by parents telling their children.

and as I sit here typing this I wonder if this will all be forgotten as time goes on and I wonder if this will be written in school history books. I also wonder if people in the future will find buried treasure of gold, silver and coins and paper money from where people repeated past habits to keep their money safe.

From the article linked in the original post:

"These disasters have damaged banks' reputations, but not their balance sheets. Most are still profitable, and in recent years the five banks have improved their capital bases and liquidity. They also have been subjected to annual Federal Reserve stress tests that measure whether the banks have sufficient capital to weather severe economic scenarios."

The mega-banks are much, much stronger than they were back in 2008-2009 when the financial crisis struck. They have been very, very aggressive in selling off non-core assets -- meaning, they have aggressively downsized departments and assets that are not a main part of their core operating business - i.e., deposits and loans.

Liquidity -- meaning cash on hand -- has skyrocketed at the mega-banks. The banks have money to lend, but a huge difficulty finding qualified borrowers to lend to. Profits are way up, liquidity is way up.

Maybe it is time for it all to come crashing down...

It's fair to say that we will eventually see an orchestrated event or events that will cause a One World Bank to emerge from the ash heap of our current banking structure. Consolidations will continue. Small banks will continue to get gobbled up by the big banks, and cannot compete on an even playing field with the mega-banks.

Hear, hear - time to clear the rubble so we can rebuild something lasting and of better quality for ourselves. I'd even be willing to extend that to quite a few other things as well.

Be careful what you wish for. The whole plan is to centralize the banking system into fewer and fewer hands until we eventually have a One World Bank. People decrying the current banking system will only speed up that process.

They do not have a great deal of cash on hand.

Because most banking has gone electronic. We are fast becoming a cashless society.

Also, loans have become much harder to get.

Agreed. However, loans have become difficult to get because we have had 30+ years of credit expansion and most individuals and businesses are already in debt up to their eyeballs and can barely manage their current debt loads.

I agree, the current system is now and has been for 20 years beyond saving.

These mega-banks are, after all, just a huge hodge-podge of consolidations, mergers, and acquisitions. You have people from hundreds of different banks, different software, all thrown together to try to operate as a single entity. That's one of the main reasons why the banks are so bureaucratic and inefficient.

reply to post by hp1229


I have a question about all of this? Has anyone ever had the bank they have their mortgage or even their car for that matter, go out of business?

Does that mean you don't owe money to them anymore? Or do they just sell your loan off to someone else before filing chapter 11??

reply to post by Chrisfishenstein


They bundle loans and sell them off to keep their income fluid or another bank comes in and purchases the loans before the other bank becomes insolvent.

No freebies.....ever.

reply to post by sheepslayer247


That is kinda BS......Of course nobody can come out on top.......EVER!!!

I figured as much though, just figured to ask to see if it ever happened to anyone

That is kinda BS......Of course nobody can come out on top.......EVER!!!

Live a debt-free lifestyle. Pay cash for everything. Don't borrow. It can be done.

reply to post by CookieMonster09


Yes it can. I am on the road to doing just the myself. I just let the bank take back a financed vehicle and will be giving up my mortgage depending on how my lawsuit goes. (thats a long story)

But it can be done.

reply to post by sheepslayer247


I remember reading all about it in your thread......Hopefully everything goes well on that aspect.....

Originally posted by Chrisfishenstein
reply to post by hp1229

 

I have a question about all of this? Has anyone ever had the bank they have their mortgage or even their car for that matter, go out of business?

Does that mean you don't owe money to them anymore? Or do they just sell your loan off to someone else before filing chapter 11??

I'm assuming generally or most of the times, they have a buyer of their DEBT way before they file bankruptcy. Ofcourse the customers wouldn't know anything about it.

The reason the bank doesn't have much money is because it isn't required too. The Fed mandates the percentage that a bank has to have on hand, and if there was to be a run, they still have additional funds at The Fed.

If banks had to keep every dollar that the customer put in it, they couldn't make loans and that's what drives the economy. You might not like it, but that's how things work.

The problem comes from the derivatives and other exotic instruments the banks come up with to make money. Say I'm the bank and I make you a loan. Let's say I want to guarantee this cash flow so I sell it too someone else. Then they could sell it to someone else as well and you see how it keeps rolling. You can even buy "insurance" on this as well, and in some cases sell that insurance to more than one person. You also have Credit Default Swaps which get really complicated. So when one person can't pay, the dominos all start to fall.

I wouldn't say the banks are gearing up for a run at all; that's just normal procedure that they have to follow.

Originally posted by SpaDe_
reply to post by sheepslayer247

 

I agree with most of what you have said with the exception of the SHTF statement. The true SHTF won't happen until the momentum that is keeping the zombie economy moving forward comes to a complete stop. When the final trickle up hits wall street and there is truly nothing left to put back in, that is when people will finally realize that the game is over so to speak. After that happens the chaos will ensue. When people can't use their various cards any longer to make purchases, and banks close their doors because they have no more money to give the real SHTF will occur.

You do realise that if the banks ever closed their doors, marshal law would be in place.

That is not something that I want to be part of

reply to post by magma


Marshal Law? Even the government would have a hard time holding that wave back.

We knew it was coming, strap yourselves in and invest in physical commodities. gems, food, the stuff that doesn't require "cash" to be moved.

Looks like the swap-meet is back in black baby!