76 people made 41% of donations to political parties
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Different rules for different people is fine if they hold the right beliefs?
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The banks didn't lose money..The deficit in their accounts were covered by the government via the tax paying public.
They leveraged themselves to ridiculous levels, while selling rubbish products...spending money they didn't own. Once they couldn't leverage further they filed for bankruptcy...of course they got their billions in bonuses first. In simple terms...they spent and took home money they couldn't cover.
They leveraged themselves to ridiculous levels, while selling rubbish products...spending money they didn't own. Once they couldn't leverage further they filed for bankruptcy...of course they got their billions in bonuses first. In simple terms...they spent and took home money they couldn't cover.
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Which question have i not answered?
tell you what I'll number them for you
1. Who was on the other side of these bets? If you're going to enter into a CDS you need a counterparty.... how can you claim in a general sense that the banks were betting against this debt, citing an article showing that GS bet against some toxic debt is rather different to making that claim in general.
2. Why did the banks lose money if they were all betting against this debt? (yes some have been bailed out subsequently following their losses)
3. Do you understand how some banks with very little to do with sub prime debt ended up in trouble for example?
1. Who was on the other side of these bets? If you're going to enter into a CDS you need a counterparty.... how can you claim in a general sense that the banks were betting against this debt, citing an article showing that GS bet against some toxic debt is rather different to making that claim in general.
2. Why did the banks lose money if they were all betting against this debt? (yes some have been bailed out subsequently following their losses)
3. Do you understand how some banks with very little to do with sub prime debt ended up in trouble for example?
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1. CDS allowed speculators to place bets on the same mortgage bonds and CDO's. Speculators that bought CDS insurance were betting that customers would not keep up with these loans, while the sellers (such as AIG) bet they would not. The banks also owned the rating agencies who would stand by these loans making their bets a sure thing.
2. Betting against this debt was only part of the practices that were institutionalized at that time. Securitisation played a massive part in all this and shortly before 2008 global demand decreased significantly and they could not repay their loans.
3. There are a significant number of reasons for this including the knock on effect on the collapse of the investment banking sector.
You ask a lot of questions but present no information or facts. Perhaps you can detail the reasons behind all of this if you disagree with the above
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im find it hard to understand the way everyone uses "bet" specultors "betting" the people with the loans wouldst be able to pay them back.
ok why does the loan owners not paying them back make them money?
and who are they betting with?
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Because the banks have bet that the customers who were sold the product will default on their payments..because they knowingly sold them products they could not afford. The rating agencies (owned by the banks) gave the products a glowing rating so the customer was duped left and right.
dowie will no doubt disagree with all of this, so best to ask him to explain it further.
dowie will no doubt disagree with all of this, so best to ask him to explain it further.
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right what im asking is how does that make them money?
surely them not being able to pay back the loan costs the bank money?
and now it seems like your saying they knowingly sold bad mortgages deliberately hoping people wouldn't pay them back, i thought it was more a case of the banks realizing they had lots of dodgy mortgages and found a way to sell them on in packages to other people so they'd be the ones footing the looses when they didn't pay their loans back?
i thought they found a way to profit out of a bad decision they'd made rather than intentionally making the bad decision?
all, this confuses me really tbh.
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Once the banks had made the deal and taken their cut, they sold the debt on at a profit.
There is a documentary called inside job that came out a few years ago...take a look
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see but why would they deliberately choose bad debt, where does the person defaulting on the loan make the deal better than them selling good debt?
I know what a CDS is, the point is 'the banks' collectively can't all be net long as they're providing the bulk of the CDS market. You've taken an article about GS and one particular case (where they'd argue they were merely hedging their exposure rather than speculating against the CDO) and tried to apply it to all banks - that just doesn't work, someone has to be on the other side of that bet as I've pointed out to you a few times.
A lot of banks were simply exposed massively to the debt... if they had any foresight into what was about to occur then they wouldn't have been so exposed, it cost them billions in the end.
Well yes, the lack of liquidity for one. Take Northern Rock for example... were they placing massive bets against CDOs etc.. nope... they just had a big mortgage book relative to their deposits and were reliant on short term deposits from the money markets... when liquidity disappeared this asset rich bank couldn't function.
I disagree with the idea that the financial crisis was deliberate or that many people at these banks had any foresight into it, it is quite clear they didn't else they wouldn't have been so exposed. You've extrapolated from one article about Goldman Sachs and presented a narrative in your previous post that just doesn't add up.
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Most of the people who were sold these products had little choice, bad credit rating and low incomes prevented them for gettign a mortgage for example. These products made mortgages and loans possible. Becasue the rating agency rated the products highly the customers had no idea the level of repayment required. In the case of mortgages... by the time they found out they were evicted for non payment.
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No i haven't, i had cited it as an example. We don't agree and that's fine. None of what i have posted in this thread is to be applied in every scenario, it played a massive part in it however.
They're betting with, usually, another bank. Think of it like insurance... one bank sells the CDS and receives a series of payments, in the event that the underlying asset is defaulted upon then that seller has to pay out. A speculator can profit as you don't have to have anything to do with the original loan in order to buy a CDS.
The thing the other poster is missing is that banks make up most of the market so the idea that they were in general betting against this toxic debt doesn't add up... thus my question to him - who was on the other side of the bet... *some* banks were net long various contracts others, obviously, weren't... and even those that were generally weren't to the point where their 'bets' covered their exposure. So the idea they had some foresight into the crisis in general or somehow engineered it is very dubious.
You're getting very confused here, the ratings agencies had nothing to do with the end customer of the mortgages... why would a mortgage customer care, they're receiving the loan. The problem with the AAA rating was one for the banks that ended up holding the CDOs that these mortgages were packaged into.
Conspiracy by banks is hardly new, lets be honest, if even airlines can run cartels, i think very well educated mathematicians can think of more intricate ways of hiding information. The HSBC thing was revealed because it wasnt that hard to discern, but something so involved as what was going down from the 80s-2007 is too complicated to blurt out without hindering your position (Only other mathematicians would understand fully).
(I don't actually care though)
(I don't actually care though)
They got too greedy and the system ate itself up because there was no more leeway, minimal damage to them obviously with the way the US treasury works.