OBAMA PLANS CUT BACK ON SOCIAL SECURITY AND MEDICARE

We were out there going to assisted lving homes and warning the people about this. This is no suprise. They voted for Barry anyway.

With these consolidations it would seem to make any point of falure more critical and far reaching…

More food for thought, I need more string.

There is no immunity for anybody because ultimately we all pay the price for these crimes!!

Maybe they need more tapped lines and orange jumpsuits. That working people who barely get by pay for this infuriates me. Maybe that could be part of Obama’s stimulus package: quadruple investigations and prosecutions of white collar crime. And speaking of which, congress has been a solid partner in the worst of it. I saw Sen. Schumer tut-tutting hedge fund managers and remembered that congress had been unable to pass legislation that merely would have required managers like Madoff to pay regular income tax on their hedge fund “earnings.”

Oy, I am so steamed, LD. Please don’t take it personally, I appreciate what you’re doing here and read most.

The bailout funds that have been directed to the banks so far were in the form of “preferred stock” which paid the government a 5% dividend. Thus the cost to the banks is 5%.

The 0% that you are likely referring is the Fed Funds rate which is the rate at which banks can borrow from the Federal Reserve for overnight money. The Fed has indicated that that FF rate will stay between 0-.25% for an extended period.

Where do the banks put that cash to work? Across all lines of business, including but not exclusively:

1.mortgages at rates between 4.75% to 7% for “prime” credits depending on the amount of the loan.

2. other consumer credits from home equity lines to credit cards can range from 5% to north of 20% again depending on the balance and the quality of the credit of the borrower.

3. corporate credits likely range from 7-20% again depending on the credit quality of the borrower.

I have not heard of rates approaching 36-38% for anything. Nor would I envision any person or entity paying that rate.

The brokerage division of Citi is Smith Barney, while th ebrokerage division within Morgan Stanley was a combination of the former Dean Witter and Morgan Stanley brokers.

Thus this article is referring to the combined brokerage divisions as being the largest, not an entirely new firm that is larger than any of the current bank holding companies sucha s Bank of America or JP Morgan.

The models that emerge will likely be a few massive bank holding companies. JP Morgan, Bank of America, Goldman Sachs. I would not be surprised to see Morgan Stanley purchased by HSBC. Goldman Sachs may end up merging with another large global banking firm as well. After we have these handful of behemoths I think we will have a lot of boutique investment banks.

What a mess!!

Hope that makes sense.

What I caught my eye was that after this possible transaction with Morgan Stanley, it would become the largest in the world ahead of B of A.

My question was more about economies of scale and the global market. Under the heading of “to big to fail”, is it right direction to go? I was thinking in terms of you saying the “the model is broken” and have been pondering what models will emerge.

I have the impression that after all the farm equipment auctions now the same banks are them selves on the block. Ironic, isn’t?

Your point is very well taken and regrettably a simple reality. Where is the decency, honestly, and integrity in our country?

I know folks may consider the drug companies and providers the “bad” guys, but I can tell you from direct experience, that approx. 2/3′s of patients using specialty pharmaceuticals are on Medicare or Medicaid. The reimbursement from these government payors is in many if not most cases, below cost. There is also a significant percentage of patients that have commercial insurance, but cannot afford their co-pays, co-insurance, out of pocket expenses, etc. Generous grants are available from the drug manufacturer’s (in addition to the federal rebates that are provided to the individual state Medicaid’s from the manufacturers).

Smith Barney merged with Salomon Bros in the early 90s after Salomon was involved in a Treasury bid rigging scandal.

Salomon-Smith Barney was then purchased by Citigroup a few years later.

I am reading your question as to whether it is wise that Morgan Stanley purchase Smith Barney. First off, it is plainly obvious that Citi badly needs capital. There has been pressure on Citi to break up the massive firm because of an inability to manage the total risk. They always resisted. Now it appears that the pressures are too great and I would envision that we will Citi dismantled.

Smith Barney is primarily a retail brokerage network. They act as brokers, have very little principal risk taking activities and simply generate earnings through their retail brokerage business.

By selling SB, Citi will generate some of that badly needed capital but also inhibit or lessen future growth.

Not sure if that answers your question. Is that what you were driving towards with your question? Or were you inquiring whether the government should be an equity holder in these companies?

I am not a student on the Islamic banking models so I do not want to pretend that I am. I do recall discussing at one point the topic of primarily utilizing arbitration in settlements and how the arbitration process was a key component of the Islamic banking model. Let me do a little homework.

I have not heard anything about the credit card trend. My response to that would be that you very pointedly nad emphatically tell the company that you may very well take your business elsewhere if they tried to impose a lower limit. Stand up and fight them. I do not carry a balance and if they eevr tried to impose something liek that, I would tell them that they are likely to lose a customer and that I would share that news with every friend, relative, and family member.

Have any of our followers heard anything about this?

Let me knwo if I addressed your initial question properly. I think I may have misinterpreted it.

This story might be much closer than it appears in the rearview mirror, and surely as we look to cut costs to balance budgets, we should first look to rid the system of corruption.