Home Discord Chat
Go Back   ChiefsPlanet > Nzoner's Game Room
Register FAQDonate Members List Calendar

Reply
 
Thread Tools Display Modes
Old 06-27-2016, 11:23 AM  
DaFace DaFace is offline
Kind of a mod
 
DaFace's Avatar
 
Join Date: Aug 2005
Location: Donkey Land
Casino cash: $86899
Investing megathread extravaganza

A place to talk about investing stuff.

Last edited by DaFace; 02-19-2021 at 06:35 PM..
Posts: 52,542
DaFace is obviously part of the inner Circle.DaFace is obviously part of the inner Circle.DaFace is obviously part of the inner Circle.DaFace is obviously part of the inner Circle.DaFace is obviously part of the inner Circle.DaFace is obviously part of the inner Circle.DaFace is obviously part of the inner Circle.DaFace is obviously part of the inner Circle.DaFace is obviously part of the inner Circle.DaFace is obviously part of the inner Circle.DaFace is obviously part of the inner Circle.
    Reply With Quote
Old 06-27-2017, 10:45 PM   #1036
Rain Man Rain Man is offline
Seize life. Be an ermine.
 
Rain Man's Avatar
 

Join Date: Jul 2001
Location: My house
Casino cash: $1378491
VARSITY
Quote:
Originally Posted by Cornstock View Post

I have a taste for throwing in some fixed income, or at least equities that pay strong dividends (check out VYM by Vanguard). When you reinvest proceeds during a market downturn you can strongly improve your dollar cost average over the long turn. VYM has the added benefit of performing well in a bull market as well because it's all large cap.

If y'all want, I can dig up some nice textbook type info why this is a good idea in your portfolio.
What are some examples of good fixed-income holdings? I've got this image that they all pay 1 percent or so, so I avoid them, but maybe I'm wrong.

I've put a bit of money into some things like REITs and holding companies that I find interesting. You don't really expect the stock to appreciate, but they throw off huge dividends in the 5 to 8 percent range. I've been treating them kind of like fixed-income, even though I know they're not.
__________________
Active fan of the greatest team in NFL history.
Posts: 143,180
Rain Man is obviously part of the inner Circle.Rain Man is obviously part of the inner Circle.Rain Man is obviously part of the inner Circle.Rain Man is obviously part of the inner Circle.Rain Man is obviously part of the inner Circle.Rain Man is obviously part of the inner Circle.Rain Man is obviously part of the inner Circle.Rain Man is obviously part of the inner Circle.Rain Man is obviously part of the inner Circle.Rain Man is obviously part of the inner Circle.Rain Man is obviously part of the inner Circle.
    Reply With Quote
Old 06-27-2017, 11:06 PM   #1037
Cornstock Cornstock is offline
Veteran
 
Cornstock's Avatar
 

Join Date: Oct 2008
Casino cash: $9986835
Quote:
Originally Posted by Buehler445 View Post
You've got it backwards. They shifted to high gear and burned up the clutch.

Theory is if there are low interest rates industry will expand because money is cheap. Unemployment will fall GDP will rise. Extended periods of growth leads to inflation. Raising interest rates will cause businesses to slow expansion and cook off the economy and wait for the market to catch up with GDP growth.

There are a series of interrelated curves (labor, money supply, GDP, and some other shit) that proof it all out but that is the 30,000 ft overview of intermediate macroeconomics.

So what Japan did was try to spur growth through interest rates and it didn't do anything. So they've fired their bullets.

Again, I'm not an expert, but I'd postulate that what happened here was interest got cheap and business did things other than directly increase production

1. Sit on the cash (see apple)
2. Invest in automation - not sending money home, wrecking the velocity of money
3. Invest overseas - taking it out of the equation completely thus thoroughly wrecking the velocity of money.
Right now the economic trend has been Quantitative Easing (QE) to stimulate the economy. This involves the central bank's buying Mortgage Backed Securities to infuse the market with cash. This isn't a bad idea, but at least in the US, the consequence has run into a political obstacle.

With all of the capital requirement changes that occurred after 2008, banks are required to keep more cash on hand in case of emergencies. Their Tier 1 Capital Ratios for small banks was 5.5-7%, and for large banks it was even less. Now they are required to maintain over 10%.

What this means is that a huge bank with 10s of billions of dollars of assets are no longer allowed to lend those 10s of billions. It is required to be dead money. This added to more stringent requirements in lending, so banks can only lend to superbly qualified businesses/individuals makes for a disaster that was really unforseen.

Money multiplier theory says that a dollar lent can be multiplied something like 27 times. So if a bank is required to keep 30 billion in dead money, this would have otherwise been an 810 billion dollar infusion into the economy, which would have spurred economic growth. (Imagine your small business getting a small chunk if that).

So the banks are taking the money that is being infused by QE and putting it straight towards their reserves, instead of injecting it into the economy. This is why no one has seen any real effect of QE until recently, now that the reserves are topped off and in compliance.

I know no one likes big banks, but they are an integral part of our economy, and by handcuffing them it hurts everyone. But Bernie and the like don't recognize this and just want more regulations. They need to be loosened up so the banks are allowed to lend.

I know this is kind of long, but it may be the first time anyone has explained to you WHY these new bank regulations are so bad, rather than just saying that big banks are bad and greedy and they deserve to be punished.
Posts: 1,606
Cornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby Piscitelli
    Reply With Quote
Old 06-27-2017, 11:10 PM   #1038
Cornstock Cornstock is offline
Veteran
 
Cornstock's Avatar
 

Join Date: Oct 2008
Casino cash: $9986835
Quote:
Originally Posted by Rain Man View Post
What are some examples of good fixed-income holdings? I've got this image that they all pay 1 percent or so, so I avoid them, but maybe I'm wrong.

I've put a bit of money into some things like REITs and holding companies that I find interesting. You don't really expect the stock to appreciate, but they throw off huge dividends in the 5 to 8 percent range. I've been treating them kind of like fixed-income, even though I know they're not.
I don't currently hold any but I'll find some good ones tomorrow. I just blew my load on that last post so I'm done for the night. Typically you'll want medium term stuff. They return a bit higher than 1%.
Posts: 1,606
Cornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby Piscitelli
    Reply With Quote
Old 06-27-2017, 11:16 PM   #1039
eDave eDave is offline
Banned
 

Join Date: Jan 2013
Casino cash: $9998560
Quote:
Originally Posted by Rain Man View Post
What are some examples of good fixed-income holdings? I've got this image that they all pay 1 percent or so, so I avoid them, but maybe I'm wrong.

I've put a bit of money into some things like REITs and holding companies that I find interesting. You don't really expect the stock to appreciate, but they throw off huge dividends in the 5 to 8 percent range. I've been treating them kind of like fixed-income, even though I know they're not.
https://fixedincome.fidelity.com/ftg...onds|municipal
Posts: 53,803
eDave is obviously part of the inner Circle.eDave is obviously part of the inner Circle.eDave is obviously part of the inner Circle.eDave is obviously part of the inner Circle.eDave is obviously part of the inner Circle.eDave is obviously part of the inner Circle.eDave is obviously part of the inner Circle.eDave is obviously part of the inner Circle.eDave is obviously part of the inner Circle.eDave is obviously part of the inner Circle.eDave is obviously part of the inner Circle.
    Reply With Quote
Old 06-27-2017, 11:16 PM   #1040
Cornstock Cornstock is offline
Veteran
 
Cornstock's Avatar
 

Join Date: Oct 2008
Casino cash: $9986835
Japan has other options besides QE. It's a Milton Friedman concept known as Helicopter Money. Good article about it here: http://www.economist.com/news/financ...out-cash-money
Posts: 1,606
Cornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby PiscitelliCornstock 's adopt a chief was Sabby Piscitelli
    Reply With Quote
Old 06-28-2017, 10:04 AM   #1041
Buehler445 Buehler445 is online now
Supporter
 
Buehler445's Avatar
 

Join Date: Apr 2007
Location: Scott City KS
Casino cash: $374734
Quote:
Originally Posted by Cornstock View Post
Right now the economic trend has been Quantitative Easing (QE) to stimulate the economy. This involves the central bank's buying Mortgage Backed Securities to infuse the market with cash. This isn't a bad idea, but at least in the US, the consequence has run into a political obstacle.

With all of the capital requirement changes that occurred after 2008, banks are required to keep more cash on hand in case of emergencies. Their Tier 1 Capital Ratios for small banks was 5.5-7%, and for large banks it was even less. Now they are required to maintain over 10%.

What this means is that a huge bank with 10s of billions of dollars of assets are no longer allowed to lend those 10s of billions. It is required to be dead money. This added to more stringent requirements in lending, so banks can only lend to superbly qualified businesses/individuals makes for a disaster that was really unforseen.

Money multiplier theory says that a dollar lent can be multiplied something like 27 times. So if a bank is required to keep 30 billion in dead money, this would have otherwise been an 810 billion dollar infusion into the economy, which would have spurred economic growth. (Imagine your small business getting a small chunk if that).

So the banks are taking the money that is being infused by QE and putting it straight towards their reserves, instead of injecting it into the economy. This is why no one has seen any real effect of QE until recently, now that the reserves are topped off and in compliance.

I know no one likes big banks, but they are an integral part of our economy, and by handcuffing them it hurts everyone. But Bernie and the like don't recognize this and just want more regulations. They need to be loosened up so the banks are allowed to lend.

I know this is kind of long, but it may be the first time anyone has explained to you WHY these new bank regulations are so bad, rather than just saying that big banks are bad and greedy and they deserve to be punished.
Really good post.

I'm not informed on banking enough to know what the reserve requirements should be, but I know the regulations are hot garbage. At least the ones that trickled down to my local bank, which I understand are markedly different than commercial banks.
Posts: 58,206
Buehler445 is obviously part of the inner Circle.Buehler445 is obviously part of the inner Circle.Buehler445 is obviously part of the inner Circle.Buehler445 is obviously part of the inner Circle.Buehler445 is obviously part of the inner Circle.Buehler445 is obviously part of the inner Circle.Buehler445 is obviously part of the inner Circle.Buehler445 is obviously part of the inner Circle.Buehler445 is obviously part of the inner Circle.Buehler445 is obviously part of the inner Circle.Buehler445 is obviously part of the inner Circle.
    Reply With Quote
Old 06-28-2017, 12:07 PM   #1042
ChiliConCarnage ChiliConCarnage is offline
TACO SALAD
 
ChiliConCarnage's Avatar
 

Join Date: Apr 2008
Location: yes
Casino cash: $-131532
Quote:
Originally Posted by Rain Man View Post
Quote:
Originally Posted by Buehler445 View Post
You've got it backwards. They shifted to high gear and burned up the clutch.


Actually, BoJ was more concerned with real estate prices continuing to increase and raised interest rates during the equities crash. It didn't work and the real estate market crashed as well. Then they dumped interest rates because they'd gone deflationary but it ended up a spiral w/ people sitting on cash.

They were starting to raise rates again in the 2000's until we crapped everything out globally.

I'm guessing growth from some of their asian neighbors like S. Korea hurt their economy too.

All of the developed nations are struggling w/ birth rates. Most of them are squeaking out some growth with the help of immigration but Japan doesn't have a great culture for that..
Their population peaked in 2007/2008 and is shrinking so uh.. that's not gonna help going forward. I think I saw something that unless their demographics change somehow their population was going to shrink 40% in the next 50 years or so.
Posts: 6,456
ChiliConCarnage threw an interception on a screen pass.ChiliConCarnage threw an interception on a screen pass.ChiliConCarnage threw an interception on a screen pass.ChiliConCarnage threw an interception on a screen pass.ChiliConCarnage threw an interception on a screen pass.ChiliConCarnage threw an interception on a screen pass.ChiliConCarnage threw an interception on a screen pass.ChiliConCarnage threw an interception on a screen pass.ChiliConCarnage threw an interception on a screen pass.ChiliConCarnage threw an interception on a screen pass.ChiliConCarnage threw an interception on a screen pass.
    Reply With Quote
Old 07-02-2017, 08:33 AM   #1043
RunKC RunKC is offline
Andy Reid Supporter
 
RunKC's Avatar
 

Join Date: Apr 2012
Casino cash: $329611
I've been thinking that a compound interest account needs to be started ASAP but I'm not sure what to look for.

Any tips on the best accounts to search for? Best rates?

If I missed this, let me know the post # to start reading. Thanks
Posts: 48,518
RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.
    Reply With Quote
Old 07-02-2017, 11:59 AM   #1044
lewdog lewdog is offline
Mod Team
 
lewdog's Avatar
 

Join Date: Sep 2011
Location: Valley of the hot as ****
Casino cash: $-8100
Quote:
Originally Posted by RunKC View Post
I've been thinking that a compound interest account needs to be started ASAP but I'm not sure what to look for.

Any tips on the best accounts to search for? Best rates?

If I missed this, let me know the post # to start reading. Thanks
There isn't something called a compound interest account.

Compound interest just means interest on interest gained due to the variable of time. It's why those who invest a little bit of money early in life, can have very large sums later while placing less cash in accounts, than someone who starts later in life but places greater capital in account.

That can be accomplished through a variety of devices. Stocks, bonds, basic savings account, CDs. What are you looking to do?
__________________
2024 Royals game thread record 3-0
Posts: 46,146
lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.
    Reply With Quote
Old 07-02-2017, 12:31 PM   #1045
RunKC RunKC is offline
Andy Reid Supporter
 
RunKC's Avatar
 

Join Date: Apr 2012
Casino cash: $329611
Quote:
Originally Posted by lewdog View Post
There isn't something called a compound interest account.

Compound interest just means interest on interest gained due to the variable of time. It's why those who invest a little bit of money early in life, can have very large sums later while placing less cash in accounts, than someone who starts later in life but places greater capital in account.

That can be accomplished through a variety of devices. Stocks, bonds, basic savings account, CDs. What are you looking to do?
Yeah sorry I wasn't conveying that correctly. I'm 29 and want to find the best route of setting that up.

Are there different rates of interest I can select from any of those options? 5% interest in the account? 6? 8?

That's what I'm wanting to find
Posts: 48,518
RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.
    Reply With Quote
Old 07-02-2017, 12:37 PM   #1046
lewdog lewdog is offline
Mod Team
 
lewdog's Avatar
 

Join Date: Sep 2011
Location: Valley of the hot as ****
Casino cash: $-8100
Quote:
Originally Posted by RunKC View Post
Yeah sorry I wasn't conveying that correctly. I'm 29 and want to find the best route of setting that up.

Are there different rates of interest I can select from any of those options? 5% interest in the account? 6? 8?

That's what I'm wanting to find
If they offered rates like that for saving, we'd all be rich! It's not even close to that simple though. You might want to read/google some basic savings 101 information.

You aren't guaranteed set rates unless it's a savings account or a CD. Savings accounts earn next to nothing (<1% interest). CDs maybe 1-2% but many require a fairly large deposit.

All other options for 5%+ are related to investing and returns are not guaranteed. In these options you theoretically could lose the money you put in or make absolutely nothing. Do you have any retirement options through your employer?
__________________
2024 Royals game thread record 3-0
Posts: 46,146
lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.
    Reply With Quote
Old 07-02-2017, 01:06 PM   #1047
RunKC RunKC is offline
Andy Reid Supporter
 
RunKC's Avatar
 

Join Date: Apr 2012
Casino cash: $329611
Quote:
Originally Posted by lewdog View Post
If they offered rates like that for saving, we'd all be rich! It's not even close to that simple though. You might want to read/google some basic savings 101 information.

You aren't guaranteed set rates unless it's a savings account or a CD. Savings accounts earn next to nothing (<1% interest). CDs maybe 1-2% but many require a fairly large deposit.

All other options for 5%+ are related to investing and returns are not guaranteed. In these options you theoretically could lose the money you put in or make absolutely nothing. Do you have any retirement options through your employer?
Well I clearly saw that wrong. I think I got the rates from investing caught in with the others.

Here's what I've got.

-401k-6% employer match. Roughly 40k in so far.
Thinking of adding more myself by adding 1-2% from my check on top of the 6%.

-Roth IRA. Got that in January and have checked it twice. No big movement really.

-Investing: I've thought about this a lot but haven't committed yet. Obviously I would choose a dividend stock, but haven't been sold on one yet. I've thought about safe stocks like AT&T and Coca Cola but am not sure that they are good long term stocks.
I've thought about wanting something that people will still buy even in bad times. That led me to think of Unilever.
Posts: 48,518
RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.RunKC is obviously part of the inner Circle.
    Reply With Quote
Old 07-02-2017, 01:23 PM   #1048
lewdog lewdog is offline
Mod Team
 
lewdog's Avatar
 

Join Date: Sep 2011
Location: Valley of the hot as ****
Casino cash: $-8100
Quote:
Originally Posted by RunKC View Post
Well I clearly saw that wrong. I think I got the rates from investing caught in with the others.

Here's what I've got.

-401k-6% employer match. Roughly 40k in so far.
Thinking of adding more myself by adding 1-2% from my check on top of the 6%.

-Roth IRA. Got that in January and have checked it twice. No big movement really.

-Investing: I've thought about this a lot but haven't committed yet. Obviously I would choose a dividend stock, but haven't been sold on one yet. I've thought about safe stocks like AT&T and Coca Cola but am not sure that they are good long term stocks.
I've thought about wanting something that people will still buy even in bad times. That led me to think of Unilever.
Well good to hear you're definitely on the right track with the 401k and the ROTH. If you need the tax saving benefit, increase your 401k contribution. I'd consider maxing out your ROTH for the year before investing in individual stocks but you definitely don't have to.


I like your thinking on the stocks. Unilever has had a massive jump in the past year. It's definitely a nice pick and relates to everyday products. It's been performing well. It's up to you if you think that continues and buy in now, or if you feel it's over-valued and wait.
__________________
2024 Royals game thread record 3-0
Posts: 46,146
lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.lewdog is obviously part of the inner Circle.
    Reply With Quote
Old 07-03-2017, 02:18 PM   #1049
scho63 scho63 is offline
Politically Incorrect
 
scho63's Avatar
 

Join Date: Feb 2009
Location: Scottsdale, AZ
Casino cash: $831110
Quote:
Originally Posted by lewdog View Post
Well good to hear you're definitely on the right track with the 401k and the ROTH. If you need the tax saving benefit, increase your 401k contribution. I'd consider maxing out your ROTH for the year before investing in individual stocks but you definitely don't have to.


I like your thinking on the stocks. Unilever has had a massive jump in the past year. It's definitely a nice pick and relates to everyday products. It's been performing well. It's up to you if you think that continues and buy in now, or if you feel it's over-valued and wait.
You are like the homosexual Suze Orman!
__________________
"The only difference between sex for free and sex for money is that sex for free costs you a WHOLE LOT more!" ~Redd Foxx~


2018 2019 2020 20212022 2023 2024 Adopt a Chief - Clark Hunt and Brett Veach
"The men who drafted Patrick Mahomes"


Posts: 52,846
scho63 is obviously part of the inner Circle.scho63 is obviously part of the inner Circle.scho63 is obviously part of the inner Circle.scho63 is obviously part of the inner Circle.scho63 is obviously part of the inner Circle.scho63 is obviously part of the inner Circle.scho63 is obviously part of the inner Circle.scho63 is obviously part of the inner Circle.scho63 is obviously part of the inner Circle.scho63 is obviously part of the inner Circle.scho63 is obviously part of the inner Circle.
    Reply With Quote
Old 07-03-2017, 04:49 PM   #1050
Nightfyre Nightfyre is offline
MVP
 
Nightfyre's Avatar
 

Join Date: Mar 2004
Location: Helena, MT
Casino cash: $2288849
Quote:
Originally Posted by Cornstock View Post
Right now the economic trend has been Quantitative Easing (QE) to stimulate the economy. This involves the central bank's buying Mortgage Backed Securities to infuse the market with cash. This isn't a bad idea, but at least in the US, the consequence has run into a political obstacle.

With all of the capital requirement changes that occurred after 2008, banks are required to keep more cash on hand in case of emergencies. Their Tier 1 Capital Ratios for small banks was 5.5-7%, and for large banks it was even less. Now they are required to maintain over 10%.

What this means is that a huge bank with 10s of billions of dollars of assets are no longer allowed to lend those 10s of billions. It is required to be dead money. This added to more stringent requirements in lending, so banks can only lend to superbly qualified businesses/individuals makes for a disaster that was really unforseen.

Money multiplier theory says that a dollar lent can be multiplied something like 27 times. So if a bank is required to keep 30 billion in dead money, this would have otherwise been an 810 billion dollar infusion into the economy, which would have spurred economic growth. (Imagine your small business getting a small chunk if that).

So the banks are taking the money that is being infused by QE and putting it straight towards their reserves, instead of injecting it into the economy. This is why no one has seen any real effect of QE until recently, now that the reserves are topped off and in compliance.

I know no one likes big banks, but they are an integral part of our economy, and by handcuffing them it hurts everyone. But Bernie and the like don't recognize this and just want more regulations. They need to be loosened up so the banks are allowed to lend.

I know this is kind of long, but it may be the first time anyone has explained to you WHY these new bank regulations are so bad, rather than just saying that big banks are bad and greedy and they deserve to be punished.
This post is riddled with inaccuracies. Capital is not cash on hand. It is a leverage ratio. Small banks have never averaged 5.5-7% tier one capital.

The biggest effect of QE is that it removed toxic and illiquid assets from the books of the largest institutions, which were threatening to create accounting losses for said institutions at the time. This was the huge bailout.

Also, large banks do need to have their leverage constrained because they create multiple layers of leverage by leveraging the holding company, resulting in far lower capital levels. The whole topic is frankly too complicated. That is without even getting into concentration risk management.

Furthermore, there is no formal reserve requirement of ten percent tier one capital. While increased capital levels are being encouraged by regulators, the level of capital is evaluated with respect to the institution's risk profile.

The assumption that reducing the reserve requirement will automatically increase lending is also erroneous. Loan demand has been weak for about a decade now. Furthermore, even if loan demand was stronger, the creditworthiness of borrowers you would be lending to with a lowered reserve would not be nearly as strong. The more competition increases for loans, the more concessions are made by the bank, the more likely the bank is to take losses on that loan.

So rolling back regulations allows for increased malinvestment by institutions that have less capability to absorb those losses. Often time these are exacerbated by a dip in specific types of assets, which is where concentration risk comes in. Sound familiar? Sounds like 2007 to me.
Posts: 18,631
Nightfyre has enough rep power to blowy ou to bits.Nightfyre has enough rep power to blowy ou to bits.Nightfyre has enough rep power to blowy ou to bits.Nightfyre has enough rep power to blowy ou to bits.Nightfyre has enough rep power to blowy ou to bits.Nightfyre has enough rep power to blowy ou to bits.Nightfyre has enough rep power to blowy ou to bits.Nightfyre has enough rep power to blowy ou to bits.Nightfyre has enough rep power to blowy ou to bits.Nightfyre has enough rep power to blowy ou to bits.Nightfyre has enough rep power to blowy ou to bits.
    Reply With Quote
Reply


Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On

Forum Jump




All times are GMT -6. The time now is 07:35 PM.


This is a test for a client's site.
Fort Worth Texas Process Servers
Covering Arlington, Fort Worth, Grand Prairie and surrounding communities.
Tarrant County, Texas and Johnson County, Texas.
Powered by vBulletin® Version 3.8.8
Copyright ©2000 - 2024, vBulletin Solutions, Inc.