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View Diary: "79% of investors have no trust in the financial system." (154 comments)

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  •  investors want profits (4+ / 0-)
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    Contra, shrike, Deep Texan, RUNDOWN

    Institutional investors losing confidence?  That's totally unheard of!  Those guys always know what they're talking about and never make mistakes, especially when it comes to anticipating future trends.  And their priorities almost always match the progressive values this site is know for, so we should definitely value their judgement.

    News flash: the banks have always been opaque.  They've always been a black box.  They've always run afoul of regulations, paid fines, had widespread layoffs.  But when they were paying huge dividends and boosting profits year-over-year, that didn't stop these same people from falling all over themselves trying to get a piece.

    Investors have lost faith in the banking industry purely because the banks aren't making the same kind of money they used to.  And that's a function of higher capital requirements, tighter domestic & international regulations, and a depressed global economy, as well as a deep pessimism that has (properly) pervaded the entire industry.

    That's not a sign that the banks are still failing, unless you mean failing to make outrageous profits year-over-year (which is all the investors in this piece really care about).

    It's actually a sign of health for the banking industry that they are no longer the darlings of investment capital.

    It's worth pointing out that in the 90s and 00s the banks were chalking up losses equivalent to the $6B highlighted here.  The difference was they were operating in a booming global economy and they could bury those losses against spectacular gains.  Now the gains have evaporated, but the risk-taking attitude is taking longer to die out.

    And, in case I'm not clear, the death of risk-taking in these banks is exactly what progressives should cheer.  Even though it will disappoint investors.

    •  The fact that banks are cyclical should (1+ / 0-)
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      be no surprise to anyone.  In the next boom the 79% will be falling on each other buying financials.

      "The way to see by faith is to shut the eye of reason." - Thomas Paine

      by shrike on Wed Jan 16, 2013 at 08:31:59 AM PST

      [ Parent ]

      •  You missed the point. There is no next (0+ / 0-)

        boom until the TBTFs are liquidated. There will be a next boom. But these guys will never see it.

        Markos! Not only are the Gates Not Crashed, they've fallen on us. Actual Representatives are what we urgently need, because we have almost none.

        by Jim P on Wed Jan 16, 2013 at 09:11:12 AM PST

        [ Parent ]

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