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10-24-2014, 07:10 AM
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#2
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Registered User
Join Date: Mar 2007
Location: Manhattan
Posts: 3,826
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There's the expression that Generals are always fighting the last war. The Fed is always fighting the last crisis.
Of course, when the next one comes, it will be an entirely different set of circumstances.
At the end of the day, the Fed has one tool: the printing press, or more accurately, the keyboard.
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“Life does not ask what we want. It presents us with options”
― Thomas Sowell
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10-24-2014, 10:21 AM
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#3
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Veteran
Join Date: Feb 2013
Location: Washoe County, Nevada
Posts: 2,253
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I don't get it.
I should worry that large financial institutions are required to undergo annual tests? What in the article was supposed to be a sign the Fed had lost control?
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10-24-2014, 12:47 PM
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#4
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Racing Form Detective
Join Date: Jul 2007
Location: Lincoln, Ne but my heart is at Santa Anita
Posts: 16,316
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It should be pointed out that while we had very high oil price prior to the 2008 crash, oil prices fell sharply after it began. I believe at one point in 2009 they were below $40. The stress tests are a good start, but do not go far enough. The large banks pay a lot money to some very smart people to figure out a way around them. The government can match those wages, so are a step behind. That being said, those test and the banks honesty is the only thing keeping us from another crash. For those who do not keep score, the banks have caused every recession in my lifetime. There is no reason to believe they won't cause the next one too.
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Some day in the not too distant future, horse players will betting on computer generated races over the net. Race tracks will become casinos and shopping centers. And some crooner will be belting out "there used to be a race track here".
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10-24-2014, 03:30 PM
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#5
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Veteran
Join Date: Aug 2005
Posts: 3,428
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Is the author trying to say these large banks shouldn't be required to submit to a "stress test" of their financials here or in Europe? Or, is he saying to not present such a severe scenario because it won't likely occur (because it has)?
Last edited by whodoyoulike; 10-24-2014 at 03:34 PM.
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10-24-2014, 03:56 PM
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#6
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Veteran
Join Date: Feb 2013
Location: Washoe County, Nevada
Posts: 2,253
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The author of the article linked provides information readily available about the assumptions to be used in this years stress test. I don't think he means much else beyond..."here's the news about this years stress tests"
I remain perplexed about what the author of the post means.
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10-24-2014, 09:15 PM
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#7
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Racing Form Detective
Join Date: Jul 2007
Location: Lincoln, Ne but my heart is at Santa Anita
Posts: 16,316
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Quote:
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Originally Posted by badcompany
There's the expression that Generals are always fighting the last war. The Fed is always fighting the last crisis.
Of course, when the next one comes, it will be an entirely different set of circumstances.
At the end of the day, the Fed has one tool: the printing press, or more accurately, the keyboard.
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They have all been caused by same bunch. The bankers. The bankers will keep pulling the same stuff if they let them. If they don't they will do something new, but it takes a little longer to come up something new than if we just let them do the same stunts over and over again. It was the getting rid of rules and laws put in the 1930s to prevent another depression and that nearly caused another one in 2008. Somebody once said something about not learning from history..... The bankers are always attracted to someone or something that offers to make them a quick buck. They never think they might be on the losing side of a bet. They are too smart and they have the degrees and the IQ tests scores to back that feeling.
__________________
Some day in the not too distant future, horse players will betting on computer generated races over the net. Race tracks will become casinos and shopping centers. And some crooner will be belting out "there used to be a race track here".
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10-25-2014, 03:40 PM
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#8
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Veteran
Join Date: Aug 2005
Posts: 3,428
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Quote:
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Originally Posted by _______
The author of the article linked provides information readily available about the assumptions to be used in this years stress test. I don't think he means much else beyond..."here's the news about this years stress tests"
I remain perplexed about what the author of the post means.
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I still don't understand the purpose of the article author's essay. Just ran across this timely other article today. IMO, banks only care about making money for themselves (as Robert said).
http://economictimes.indiatimes.com/...w/44934677.cms
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10-25-2014, 04:30 PM
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#9
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Veteran
Join Date: Feb 2013
Location: Washoe County, Nevada
Posts: 2,253
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Quote:
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Originally Posted by whodoyoulike
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It isn't an essay. It's a news story.
Asking the authors purpose is like asking what someone meant by saying Kansas City beat San Francisco 3-2 last night. Sometimes a cigar is just a cigar.
I have seen the rumors about 25% of euro area banks failing the ECB's stress test. The official results will be out Sunday. If true, the banks that failed will need to raise reserves.
Banks do want to make money. I don't think any of us should want it otherwise. Banks that fail in that mission end up hurting more than just their shareholders. I think the issue is more that the risks they take are socialized when they fail while the profits are private when they don't.
The stress tests are an effort to be sure the largest financial institutions are not at risk of failure again during an economic dislocation.
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