Comments on: New Day, New Bank, Same Story

By: nyongesa

nyongesa — Fri, 24 Apr 2009 02:33:32 +0000

This is mostly wishfull thinking on your behalf Adios. The numbers are only absolutley large, and are infact relatively mediocre. U.S. national debt as a percentage of GDP is middle of the pack for a developed nation, and well behind Japan, Italy and many European ones, let alone developing coun tires.

But, even more importantly. The term bankrutpcy is not easily applied to a whole nation, as opposed to indiviuals. The capital stock, intellectual property, future earning potential based upon historical norms, technoligical innovation, productivity, and many more factors too numerous to list here, makes the U.S. the most dynamic economy in the world.

Thus the U.S. is the most creditworthy borrower on the planet, and thus NOT bankrupt, which by defintion requires an in-ability to borrow.

By: New Day, New Bank, Worse Story « The Baseline Scenario

New Day, New Bank, Worse Story « The Baseline Scenario — Sun, 19 Apr 2009 18:44:40 +0000

[...] a comment » It’s a beautiful day today, and after Goldman and JPMorgan, I don’t feel like diving deep into Citigroup’s earnings release. But judging from the [...]

By: K T Cat

K T Cat — Sun, 19 Apr 2009 14:50:56 +0000

Great post! I borrowed a chart, added my own commentary and threw you a link.

By: pattipan

pattipan — Sat, 18 Apr 2009 05:16:00 +0000

thanks for voicing my thoughts…too many wonks spoil the soup, muddy the waters, and bore the pants off the nattering nabobs :-)

By: adios amigos

adios amigos — Sat, 18 Apr 2009 01:25:38 +0000

No one seems to want to face the simple fact that you are bankrupt, as a nation. The promises you have made, and the mounting debt you are taking on, far exceeds your ability to pay your long term obligations. That’s the “bottom line”. All of the rest of these discussions are irrelevant, until you resolve that “baseline” issue. You have promised to pay, more than you have the ability to pay.

By: Top Posts « WordPress.com

Top Posts « WordPress.com — Sat, 18 Apr 2009 01:01:01 +0000

[...] New Day, New Bank, Same Story JPMorgan Chase reported its quarterly earnings today. The headline was $2.1 billion in net income, beating [...] [...]

By: Nemo

Nemo — Sat, 18 Apr 2009 00:54:31 +0000

Except these replies make comments appear out of order. Bond Girl actually beat me to it by around 24 hours. :-)

By: Jason

Jason — Fri, 17 Apr 2009 23:26:11 +0000

Yes, I believe that was Nemo’s point, too.

By: Money Define Week | News

Money Define Week | News — Fri, 17 Apr 2009 20:17:10 +0000

[...] Money Define Week Felix Salmon » Blog Archive » The Detroit face-off | Blogs | Up until now, big and powerful creditors have done very well out of Detroit: just look at the way that the government blinked first when it asked GM’s bondholders to take a large haircut before any TARP money would arrive. [...] New Day, New Bank, Same Story « The Baseline Scenario As with Goldman, it was clearly a good quarter for JPMorgan; making money beats losing money any day. But the question to ask is whether it is sustainable, either for JPMorgan or for the banking industry as a whole. [...] [...]

By: bill

bill — Fri, 17 Apr 2009 19:56:40 +0000

Yes, if the expected losses don’t materialize in the future the money they reserved today (took as an expense) can come back in the future as profits.

By: craig

craig — Fri, 17 Apr 2009 19:23:04 +0000

Hmmmmmm….if govt. influenced rates in FI mkts allow banks to pay 0.5% for capital, then loan it out at much higher rates, that is a money making proposition. and it seems the interest spread (NIM) is much wider than normal times (anyone know if that is correct?) If the banks can make enuf profit over the next 2, 4, 8, quarters (i don’t know if they can) they they might be able to fill the smoldering crater (formerly known as tier 1 capital) on their balance sheet. and they may become solvent. but they can only make such profit with FI mkts heavily influenced by the Fed Govt….and the Fed Govt is using (burning) taxpayer money to do that. So it’s a slow transfer over time from US Taxpayers to bank debt and equity holders. Remind me again why the govt doesn’t just let the losses fall on the bank bondholders?

By: craig

craig — Fri, 17 Apr 2009 19:07:51 +0000

wow, you didn’t get nemo’s comment at all, huh.

By: Profitable Citi | Refinancing

Profitable Citi | Refinancing — Fri, 17 Apr 2009 17:16:42 +0000

[...] it’s great that the banks are booking big trading gains, they likely won’t be able to sustain the good times they had over the past three months. The pressure on these firms will not subside [...]

By: Claus

Claus — Fri, 17 Apr 2009 16:10:33 +0000

That’s the best question. This deserves a really really close look. “The taxpayer” is a too convenient answer and actually hides the details of the criminal work. As long as no one is interested in the details and the public isn’t aware and doesn’t understand what a scam this really is, there is no political way to change this. Really sad.

By: Mitch Gurney

Mitch Gurney — Fri, 17 Apr 2009 16:02:17 +0000

I may have missed it but so far I see no mention that these firms do not need to mark assets to market. Just in time for the reporting season the Financial Accounting Standards Board (FASB) gave firms more leeway in valuing assets. This allows them to pretend assets are worth more then they really are and defer losses for some time in the future. Also no one mentions off book details (Citi has nearly $1 trillion off book), or level 3 details, or credit exposure with derivatives (JP Morgan’s credit exposure is some 400% to capital, while Citi is nearly 260%) If all were “accounted” for how would their bottom lines really look? Anyone care to offer a true anaylsis?
http://finance.yahoo.com/news/FASB-gives-firms-more-leeway-apf-14827434.html/print.http://www.moneyandmarkets.com/files/documents/banking-white-paper.pdf