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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: frankw1900 who wrote (21747)	9/3/2012 2:06:29 PM
From: ahhaha	Respond to of 24758

Do you think the Fed will invite him back next year? Yes. "Having risen to a peak of almost three in 1928, the largest US banks’ price-to-book ratios had by 1931 plummeted to below one. They remained close to these levels for several years afterwards (Chart 20). This discount implied that investors in the bank could improve their wealth by selling-off the banks’ assets separately. Investor pressures to separate began to mount." The threat of Dodd Frank doesn't allow this to occur now although institutions would like to do the same "In response, a number of banks began selling off their equity brokerage affiliates, including the two largest banks, Chase National Bank and National City Bank in 1933. A number of banks delisted their shares. This response, led by the market, paved the way for the passage of Glass-Steagall in 1933. As Fuller (2009) puts it: “Divorce made a virtue of necessity and cursed and condemned bankers jumped at the opportunity to demonstrate their virtue”. The market was leading where regulators had feared to tread." This is inevitable to recur. Too much risk to commingle stocks and bonds. It's an inefficient frontier. BAC should get a pretty penny spinning MER. "If anything, the discounts to book value are even greater today than in the early 1930s (Chart 20). As then, this conjunction is stirring market pressures to separate. Bankers today, many cursed and condemned, could make a virtue of necessity. The market could lead where regulators have feared to tread." Profitability will lead where regulators won't bother to tread. By creating the facilities FED destroyed the definition of money. No one can be confident about what anything is worth, and therefore, everything is worthless except one. The psychological aspect is strong because there is a promissory component to money - it, (dollar, whatever), will buy tomorrow what it buys today - which requires trust in a abstract thing No one believes the promises, or they only do as long as others do. In the past the bastion of government guaranteed promises, but government has so abused its financial powers that it can't be trusted either. The creation of the facilities was the coup de grace. FED believed they had to go to the infinite momentum frame to save the world financial system. When the Tower of Basel falls the entire world redefines money by chasing after gold. Sure. Gold doesn't look abstract. If the world chases after gold, FED will have to recognize gold as a standard, a standard of belief, not a standard against bad behavior, although they are closely linked. That would have to take place under a conservative US government. A Romney admin wouldn't do it though, but a second Baboon term might necessitate it as imposed from outside government. This is legally doable since FED is independent, but it would have to be done without Berdoo. I don't believe Romney would dump Berdoo.