EconOfContempt
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@ Capital markets were 1/3 of current size back when Goldman was a partnership
2:11 PM Nov 18th
from Echofon
in reply to interfluidity
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@ It is hard, and at some point you have to get down to brass tacks.And when you do, "break up the banks" idea falls apart fast
2:08 PM Nov 18th
from Echofon
in reply to interfluidity
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@ With a resolution authority, they could've set up a bridge bank to fund LEH while Barclays got shareholder approval
2:05 PM Nov 18th
from Echofon
in reply to interfluidity
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@ My point is just that it's insufficient to say that we're going to tax all the stuff that leads to systemic risk
1:58 PM Nov 18th
from Echofon
in reply to interfluidity
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@ It's hard to criticize regulators for not choosing "no-bail resolutions" when they didn't have that resolution authority
1:55 PM Nov 18th
from Echofon
in reply to interfluidity
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@ That's because regulators DIDN'T HAVE a special resolution authority!
1:53 PM Nov 18th
from Echofon
in reply to interfluidity
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@ Okay, please define the kind of structures you're going to "tax and control," and how the tax will be applied
1:51 PM Nov 18th
from Echofon
in reply to interfluidity
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@ With a successful resolution authority, no bank would be TBTF in the first place, b/c TBTF just means costs of Ch 11 too high
1:48 PM Nov 18th
from Echofon
in reply to interfluidity
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@ All this requires is a resolution authority, not a pre-emptive "break up the banks" (even tho we cant define TBTF) authority
1:46 PM Nov 18th
from Echofon
in reply to interfluidity
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@ How is this any different from just saying, "Don't worry, I'm sure the regulators will figure it all out!"
1:40 PM Nov 18th
from Echofon
in reply to interfluidity
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@ You're making the massive assumption that such "evolving constraints" can be accurately crafted, on an ongoing basis
1:38 PM Nov 18th
from Echofon
in reply to interfluidity
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@ Okay fine, please define the market structure we're going to be enforcing
1:34 PM Nov 18th
from Echofon
in reply to interfluidity
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@ Listing the factors that *might* be relevant in determining systemic risk isnt the same as actually defining systemic risk
1:14 PM Nov 18th
from Echofon
in reply to interfluidity
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@ And thus starts the 8,591 problems with the "break up the banks" idea
1:09 PM Nov 18th
from Echofon
in reply to interfluidity
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@ Remember, Continental Illinois had only ~$80bn in assets; LTCM had ~$98bn in assets; so you can't define TBTF by asset size
1:06 PM Nov 18th
from Echofon
in reply to interfluidity
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@ Define the "right thing." Breaking up banks they consider TBTF? OK, along what lines? Please define "too big to fail"
1:03 PM Nov 18th
from Echofon
in reply to interfluidity
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@ Kanjorski amendment isn't even what you think it is. It's just a bad, poorly thought-out, poorly-drafted piece of legislation
12:38 PM Nov 18th
from Echofon
in reply to interfluidity
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Come on Barney, you're better than that!
11:44 AM Nov 18th
from Echofon
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Kanjorski amendment passed. What a mess.
11:42 AM Nov 18th
from Echofon
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@ I nominate Warsh. He just looks like he's up to something.
7:10 AM Nov 18th
from Echofon
in reply to EpicureanDeal
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- Name EconomicsOfContempt
- Location New York, NY
- Web http://economicso...
- Bio Structured finance lawyer. (You're welcome, world.)
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