tag:blogger.com,1999:blog-7539577136486286096.post3449329467589377927..comments2024-03-06T04:36:10.711-06:00Comments on Supply and Demand (in that order): Economic Outlook: AnticipationCasey B. Mulliganhttp://www.blogger.com/profile/03317454408275318282noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7539577136486286096.post-22891534494554413312008-10-15T14:03:00.000-05:002008-10-15T14:03:00.000-05:00I have a different perspective in that I believe t...I have a different perspective in that I believe the reaction to the government not helping Lehman showed that the markets were expecting a bailout, which is what I thought would happen. So, in the sense that some banks were prepared for this crisis and bailout, I believe that some were.As we have here:<BR/><BR/>http://www.chumpchanger.com/2008/10/crash-scoreboard-times-thumps-journal.html<BR/><BR/>Who Was Counting On A Bailout?<BR/>Via Chump Changer, the following:<BR/><BR/>"Read the story carefully and note which bankers seem to love the plan most: JP Morgan's Jamie Dimon and Bank of America's Ken Lewis. The guy who seem to have been counting on a bailout since long before the government suspected it would be giving it to them. "<BR/><BR/>It's good to put names to the list of people who were counting on a bailout. I, of course, belief that this belief was widespread, and that the government knew that it was implicitly committed to a bailout.<BR/><BR/>Still, I take the post as a little positive proof of this. <BR/><BR/>So, I tend to agree with you, but not for the same reasons.<BR/><BR/>By the way, I believe that the system of implicit government guarantees to aid in a crisis like this abetted it happening.<BR/><BR/>Don the libertarian DemocratDonald Pretarihttps://www.blogger.com/profile/14493535232127084725noreply@blogger.comtag:blogger.com,1999:blog-7539577136486286096.post-86586506155788451972008-10-15T13:20:00.000-05:002008-10-15T13:20:00.000-05:00"Smaller Banks Resist Federal Cash Infusions&..."Smaller Banks Resist Federal Cash Infusions"<BR/><BR/>http://www.washingtonpost.com/wp-dyn/content/article/2008/10/14/AR2008101403378.html?nav=rss_politics&sid=ST2008101500125&s_pos=<BR/><BR/><BR/>The US has more than 7.500 banks. The small geographically specialized “community banks” have one third of bank offices, and about 20% of all deposits and a slightly smaller part of all assets and loans. These banks are not part of the crisis. The mid-sized regional banks are also generally in a good position (I am sure there are exceptions, but these banks are not interconnected in behavior and asset holdings like the bigger banks are). <BR/><BR/>Expect this <BR/><BR/>http://www.fdic.gov/bank/analytical/banking/2006jan/article2/article2.pdf<BR/><BR/>The 25 largest banks had 58% of assets and 50% of deposits. <BR/><BR/>NBC: “Small Community Banks Benefit From Money Crisis”<BR/><BR/>“Conservative community banks that stayed away from the sub-prime market and risky investments are looking better to a skeptical public looking for trust.”<BR/><BR/>This type of bank will expand and take over some of the work of the bigger banks, even without the need for new entry. <BR/><BR/>(For years people have been asking why the bifurcated banking structure in the US survives. Here is one reasons. Not only did these banks differentiate themselves by focusing on local knowledge, they followed a different investment strategy than the big banks. The inherent diversity of the free market is going to soften the blow, even to the financial system).Tinohttps://www.blogger.com/profile/06744296507176750198noreply@blogger.com