Staring at the abiss with Paul Krugman | 235 comments (235 topical, editorial, 0 hidden)

Re: solidarity (none / 0)

Or the banks could be getting cash from Central but are sitting on it because they know their paper is at least half garbage, and they need to make up the difference in case someone has the bad form to make a reserve audit.

by rifek on Thu Mar 22nd, 2012 at 06:11:53 PM EST
[ Parent ]

Re: solidarity (none / 0)

On the contrary, sitting on a time bomb would make them more inclined to gamble big rather than go home. After all, it is impossible to go double-bankrupt.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Mar 22nd, 2012 at 08:49:05 PM EST
[ Parent ]

Re: solidarity (none / 0)

Oh, they aren't going home, they're playing Extend and Pretend: Phase II, in which they don't even have to cook their books to make the collateral look double what it is, they just use tax money to make it all look good.

by rifek on Fri Mar 23rd, 2012 at 07:22:29 PM EST
[ Parent ]

Re: solidarity (none / 0)

Yeah, but extending and pretending doesn't get you out of the insolvency, it just prevents you from being resolved immediately. Sitting on shit until it matures doesn't, barring direct divine intervention, make it not-shit, let alone give it a gilt edge. If you want to dig yourself out of a serious insolvency, you need to make something happen to your balance sheet.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Mar 23rd, 2012 at 11:04:14 PM EST
[ Parent ]

Re: solidarity (4.00 / 2)

You're forgetting the first rule of investment bankers: When it hits the fan, IBG-YBG (I'll be gone, you'll be gone.).

by rifek on Sun Mar 25th, 2012 at 12:33:45 AM EST
[ Parent ]

Staring at the abiss with Paul Krugman | 235 comments (235 topical, 0 editorial, 0 hidden)

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