…if I were in charge I would probably reorganize the movement around a single, achievable goal: a financial boycott of the six “ too big to fail ” Wall Street firms: Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley, Wells Fargo. We would encourage people who had deposits in these firms to withdraw them, and put them in smaller, not “too big to fail” banks.I We would stigmatize anyone who invested, in any way, in any of these banks. I’d try to organize college students to protest on campuses. Their first goal would be to force the university endowments to divest themselves of shares in these banks…I think we could create a run on a bank.
I have really enjoyed Lewis' writing in the past but he is absolutely crazy on this one, thoughts?I
1) What's the beef people have against WFC? 2) How do OWS folks convince their parents to withdraw? Shy away from ML PWM and give it to a kid with an AA at shitcity union bank?
Someone is a 16th century history major and is regretting his decision?
What the fuck did Wells Fargo do wrong? This coming from a guy who repeatedly stated the degree of his ignorance in Liar's Poker when he was a bond salesman.
The ignorance is still there
You know... didn't Eddie suggest this a while ago with the Kill the Bank plan?
OMG he did write about this
Umm...thanks?
Anyway guys, I'm actually including my original plan (unedited) in my upcoming book. You guys can finally be the judge of whether or not it would work. And no, the plan they published in Playboy was not it.
I agree with the WFC comments.
It's just that WFC has the unfortunate pleasure of being one of the largest banks by assets, partly because it "gobbled" up Wachovia.
I thought only Citi was upset about this since they tried to sue WFC for $60B? Wachovia depositors should be worshiping Stumpf for protecting their savings.
I'm still curious how the FDIC would manage repaying a million depositors in the event of a loss of funds, would they have to pay out the interest as well?
Eddie is actually Michael Lewis.
I guess that's why I was curious about how the FDIC would plan to deal with it, not to mention the logistics of such a feat. With the government doing it, would probably take years before people could see their money again, and it probably wouldn't be all of it despite the charter. I'd imagine Congress would pass a law limiting the liability of the FDIC should something like that actually occur.
Bank runs are a part of the market clearing process created by the intrinsic hazards associated with fractional reserve banking. You can't expect to run a fractional reserve system without the occasional bank run, unless you like the moral hazard created by FDIC deposit insurance. Bank runs are a good thing just like bankruptcies are good thing. They are a necessary market clearing mechanism.
If you have an account at MS or GS, you're doing pretty well, I doubt you're going to be an OWS asshole.
If everyone were to somehow get their money out of America's largest six banks, they'd try and figure out where to put it and a few local banks offering decently high interest rates would get swamped with deposits and become the next too big to fail banks. Not to mention the fact that these local banks don't have the assets to match those deposits and have zero experience with mega and large cap lending.
But yeah, the 5-10 years of total depression would totally be worth it. It's too late, TBTF could have ended back in '08, now it's here to stay.
Where do you think all of the guys from TBTF would go? ;)
Who gives a damn what a guy who was a junior bond salesmen twenty years ago has to say. That being said, he is a fantastic writer and can make even the most dull subjects interesting.
Andy - Thanks. Yeah... too lazy to find it myself. The entire Playboy article was sheer brilliance btw.
I tell girls I'm too big to fail, then they ask me to deposit my excess reserves with them.
I READ THIS ARTICLE ON DEALBREAKER AND WAS LAUGHING SO HARD AT THE COMMENTS...
HOW COME NO ONE IS FUNNY ON THIS SITE?
Thanks.
I think the whole "rage" over banks betting against their clients is overblown. People need to realize that clients aren't retired men that are getting swindled. I mean investment banking/high finance changed significantly from the 80s/early 90s to now. It used to be that you advised clients on what you thought were suitable investment and then extracted a portion/commission for helping them execute trades. These days, most clients are not your wealthy dad but hedge funds, mutual funds, and institutional clients like pension funds. Because many of these investors were savvy (some in fact worked previously at places like GS, Morgan Stanley, etc), they knew exactly what kind of products/securities they wanted for their investments. Investors now use banks purely as a means for constructing financial products rather than asking them for advice. Because of this, it's not necessarily wrong that Goldman bet against some of these products they sell. They're not advocating these products to hedge funds, hedge funds come to Goldman and ask them to design these very products for them. So Goldman does it, but just because they do it, doesn't mean they think it's a good idea, so they also take bets against it. The people they sell the product KNOW that GS is taking bets against them and they're fine. They think their research is well thought out enough to beat GS.
so what I got is 1)If retail banker, put money in a bank that has a chance to fail 2)If investor, put money into company that can fail.
Why put money in a bank (retail or otherwise) if there is a chance they can go bust where as i can put my money into a bank that has historically been and will be protected by an entity with unlimited spending power?
Sometimes doing the right thing isn't doing the right thing.
Eddie, speaking of said book - how's it coming along?
I'm finishing the last chapter. It feels like giving birth.
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