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View Diary: Save 300,000 Jobs--Boycott Chase [Update] (315 comments)

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  •  Bailing Out Chase to Kill Chrysler (4+ / 0-)
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    LordMike, Superpole, fhcec, Tanya

    The public is giving Chase $BILLIONS so it doesn't go bankrupt. The public is giving Chrysler $BILLIONS so it doesn't go bankrupt.

    The public should be able to tell Chase that it can't force Chrysler to go bankrupt, or else Chase won't get any money itself.

    Why does some blogger like me have to figure that out, when we have a Congress and White House we're paying big bucks to figure that out and make it happen?

    "When the going gets weird, the weird turn pro." - HST

    by DocGonzo on Wed Apr 08, 2009 at 11:38:57 AM PDT

    •  Chase doesn't need the money (1+ / 0-)
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      Taking TARP was required. Thats not a threat to Chase.

      •  Give It Back (2+ / 0-)
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        Tanya, goinsouth

        Regardless of the truth or falsity of Chase saying it doesn't need the money, Chase doesn't want to give back the $25B we gave Chase. Threatening to do so to protect our investments in Chrysler would force Chase to change its policy.

        "When the going gets weird, the weird turn pro." - HST

        by DocGonzo on Wed Apr 08, 2009 at 12:07:05 PM PDT

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        •  nobody can give the money back until stress tests (1+ / 0-)
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          are conducted in mid-April.  In addition, President has pretty much asked banks not to return the money so that the "haves" and "have-nots" don't have to be revealed.  Chase does not need the $$ but Citi needs it badly.  Not sure about Bank of America.

          •  I'm Talking About a Change (0+ / 0-)

            What I'm talking about is the White House changing what it's doing. Like not paying banks to bankrupt the car corps we're bailing out. So it can change what you just referred to.

            FWIW, I don't believe that Chase doesn't need the money. Most of the big banks claimed they didn't need the money even as Paulson forced them to take it. Lehman's and Bear Stearns' collapses seemed to take their execs by surprise, as did this whole catastrophe. That doesn't mean they didn't also know their house of cards was aflame. What it all means is that these bankers have gotten so rich on a demented system that they can't tell their asses from their elbows anymore. Which is why we need the government to force them to run their companies in the way that they should, in the public service.

            "When the going gets weird, the weird turn pro." - HST

            by DocGonzo on Wed Apr 08, 2009 at 06:54:37 PM PDT

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            •  I realize that you have a very strong point of (0+ / 0-)

              view - however, as two of the smallest of the major investment banks in the industry, Bear and Lehman really can't be compared to Chase of Bank of America.  The nature of the institutions are different.  I'm not saying that Chase and Bank of Am could never fail, but once you look below the surface, commercial banks with diversified business models are far different than institutions that are only investment banks.  Chase didn't need the money and Bank of America would have been OK without having made the Merrill Lynch acquistion.  Citi has been a poorly run organization for a very long time and dug themselves into a ditch they could have avoided with some real leadership.  

              With all of the very heated national discussion on the banking industry, must of the nuance is lost.  Can't paint every institutional and every situation with the same brush.  I work in financial services and often see some of the detailed analysis that goes along with the policy discussions.

              •  How Do You Know? (0+ / 0-)

                How do you know that without the $25B, Chase's liabilities wouldn't have crushed the rest of its balance sheet? I note that Chase has stopped making consumer loans since January, out of the business. Even as wholesale interest rates have dropped to practically zero.

                Like I said, back in February the heads of the big TARP recipients all said they wouldn't have taken the money in 2008Q3 unless forced as they were, but in retrospect they all could see that they needed to take it. That was a confession of the grandest incompetence on the grandest scale. I see nothing that sets Chase apart from the rest of them. The bigger they are, the harder they fall.

                I worked for years making the info systems equities traders use for research and reporting. I deployed broker/dealer systems for big insurance corps becoming integrated financial corps when the CitiGroup merger pushed them all into each others' business. I spent a Summer restoring recycled hard drives salvaged from several California and Texas S&Ls, reading all kinds of internal correspondence and spreadsheets from their late 1980s - early 1990s running amok. I know what these banks and bankers are like. They are the grandest liars, hiding behind nuance taking profits from the risks on other people's money.

                All these banks sold CDSes that overleveraged their assets beyond recovery. They interdepend more than their competition permits. The trough moving through all their cash flows is triggering CDS payouts that exceed their ability to pay, in a feedback loop that is cutting their income. The bankers will say anything to protect what's left of their equity, just as they said anything to pump it up while building a flammable house of cards.

                "When the going gets weird, the weird turn pro." - HST

                by DocGonzo on Thu Apr 09, 2009 at 05:06:18 AM PDT

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    •  Common sense isn't driving this. (3+ / 0-)
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      emptywheel, gmb, Tanya

      London School of Economics Professor Willem Buiter is reluctantly coming to the same conclusion as MIT prof and former IMF economist Simon Johnson--

      the banks own governments around the world, including the U. S.:

      I used to believe this state capture took the form of cognitive capture, rather than financial capture. I still believe this to be the case for many, perhaps even most of the policy makers and officials involved, but it is becoming increasingly hard to deny the possibility that the extraordinary reluctance of our governments to force the unsecured creditors (and any remaining non-government shareholders) of the zombie banks to absorb the losses made by these banks, may be due to rather more primal forms of state capture....

      The end result may be, according to Buiter, that the U. S. and British governments will bankrupt their countries and destroy their currencies in order to protect the superbanks:

      In a number of systemically important countries, notably the US and the UK, there is a material risk of a ’sudden stop’ - an emerging-market style interruption of capital inflows to both the public and private sectors - prompted by financial market concerns about the sustainability of the fiscal-financial-monetary programmes proposed and implemented by the fiscal and monetary authorities in these countries. For both countries there is a material risk that the mind-boggling general government deficits (14% of GDP or over for the US and 12 % of GDP or over for the UK for the coming year) will either have to be monetised permanently, implying high inflation as soon as the real economy recovers, the output gap closes and the extraordinary fear-induced liquidity preference of the past year subsides, or lead to sovereign default.

      That's why boycotts like the one started by emptywheel are potentially so important.  The superbanks control those who are supposed to regulate and supervise them.  People like Geithner will never voluntarily put these institutions in receivership.  

      The people will have to force them.  Electoral politics are obviously insufficient.  Americans elected Obama, but he's pursuing the same bank policies as his predecessor.  It will take more, and boycotts--pulling your money out of superbanks--is one potentially effective means of forcing their hand.  

      Are you the change or not?

      by goinsouth on Wed Apr 08, 2009 at 11:46:37 AM PDT

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    •  You Don't Know By Now? (1+ / 0-)
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      look, congress (democrats) just complied with the most corrupt, egregious administration in history, and they did it for eight years.

      you haven't yet realized the depth of the stupidity and corruption of congressional democrats?

      HOW much more proof do you need?

      what would do it for you? invading Pakistan?

      "AIG: A bottomless pit masquerading as an insurance company". The Economist.

      by Superpole on Wed Apr 08, 2009 at 11:59:14 AM PDT

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    •  should have, but didn't (1+ / 0-)
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      and the deal is done now.  Treasury screwed up, Paulson blew it, and Geithner hasn't fixed it.  Maybe Timmeh can still do something about it, but I'm guessing he's fairly preoccupied with making sure that C and BAC don't publicly fall apart before their next quarterly report.  And then taking them into receivership as soon as possible after.

      The government should be able to tell Chase what to do.  But the government wrote a bad deal.  Fortunately, we have an entire division of the federal courts that specializes in re-writing bad deals.  

      It's called bankruptcy.  

      the We research the law so you don't have to!

      by the law of ducks on Wed Apr 08, 2009 at 02:14:22 PM PDT

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