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That's the problem.....banks are no longer banks.....because of government
regulations.
JP Morgan is rolling over in his grave.
> -----Original Message-----
> From: Jim Johnson [mailto:jejohn@xxxxxxxxxxx]
> Sent: Tuesday, September 10, 2002 7:16 PM
> To: M. Simms
> Subject: Re[6]: [RT] Money supply charts
>
>
> Hello M.,
>
> I don't know what the default rates are but it doesn't matter. if
> you have money and have several things you can do with it (lend it to
> A, lend it to B, invest it, put it in a mattress) you will do whatever
> you think is "best". I suggest best is defined differently for each
> "agent" but the banks in general must all look at the options and be
> concluding something makes more sense from a risk/reward than
> commercial lending. Otherwise, you are implying that banks should
> lend to commercial borrowers regardless of their assessment of
> risk/reward.
>
> You can't blame the banks (unless they are doing something illegal).
> As it stand they are simply participating in a free economy like all
> of us. Now one could fault the policy makers/legislators for allowing
> banks to move into other areas of finance. You asked before "what
> function do they perform?" Seems to me their function is to use the
> assets they have in the best interests of their stakeholders (owners,
> employees, etc.) the question you might ask is "why is a function
> going unperformed in this economy?" Banks are under no legal or moral
> obligation to perform a function just because you may feel it should
> be performed. I think changes in legislation has allowed banks to
> perform other functions which they apparently see as in the better
> intersts of their stakeholders.
>
>
> Best regards,
> Jim Johnson mailto:jejohn@xxxxxxxxxxx
>
> --
> Tuesday, September 10, 2002, 6:44:41 PM, you wrote:
>
> MS> But are the DEFAULT RATES that high statistically ?
> MS> I had always thought they were in the 5-10% range...no ?
>
>
> >> -----Original Message-----
> >> From: Jim Johnson [mailto:jejohn@xxxxxxxxxxx]
> >> Sent: Tuesday, September 10, 2002 12:13 PM
> >> To: M. Simms
> >> Subject: Re[4]: [RT] Money supply charts
> >>
> >>
> >> Hello M.,
> >>
> >> I have a feeling those borrowers have already maxed out their credit
> >> cards. Somebody is paying that price for money. Says to me the risk
> >> premium in lending is very high. that's why they call this
> >> "sub-prime" lending. would you lend me money at say 3% over your cost
> >> is you thought the chances were 50/50 I pay it back? 60/40? etc. So
> >> its about supply (seems to be money around), demand (don't know but I
> >> assume there are willing borrowers), and terms. its the latter that
> >> is the sticking point. I don't see it as greed or avarice as Ira
> >> suggests. It's just prudence. Am i greedy because I won't take out a
> >> long position in the NDX with half my wealth? No. its an imprudent
> >> risk that my stakeholders (me, wife, kids) won't stand for.
> >>
> >>
> >> Best regards,
> >> Jim Johnson mailto:jejohn@xxxxxxxxxxx
> >>
> >> --
> >> Tuesday, September 10, 2002, 11:50:10 AM, you wrote:
> >>
> >> MS> With an inflation rate of 1-2% and long term rates at 4-5%,
> >> MS> that 16% is analogous to Mafia extortion rates of the 1930's.
> >>
> >> MS> I see no advantage compared to credit card rates of 18% that
> >> don't require
> >> MS> that collateral....
> >> MS> am I missing something here ?
> >>
> >> >> -----Original Message-----
> >> >> From: Jim Johnson [mailto:jejohn@xxxxxxxxxxx]
> >> >> Sent: Tuesday, September 10, 2002 10:16 AM
> >> >> To: M. Simms
> >> >> Subject: Re[2]: [RT] Money supply charts
> >> >>
> >> >>
> >> >> Hello Mark,
> >> >>
> >> >> In theory (as in Michael Porter) if there was less-risky
> profit to be
> >> >> had in business lending someone would quickly fill the void. As it
> >> >> stands they apparently see profit with less risk in other
> areas. Many
> >> >> businesses have shown themselves to be less than great bets--big
> >> >> plans, fancy accounting, bubble-driven optimism all around.
> Would you
> >> >> lend money to a business right now? Or at what rate and at what
> >> >> level of collateral? Met a guy at the gym the other day. He lends to
> >> >> small businesses--takes mortgage on the house at 16%, collateralizes
> >> >> every piece of personal property. That's the picture of risk/reward
> >> >> today in commercial lending I guess.
> >> >>
> >> >>
> >> >>
> >> >>
> >> >> Best regards,
> >> >> Jim Johnson mailto:jejohn@xxxxxxxxxxx
> >> >>
> >> >> --
> >> >> Tuesday, September 10, 2002, 9:43:39 AM, you wrote:
> >> >>
> >> >> MS> This is interesting.....since Banks aren't lending anymore
> >> >> for businesses to
> >> >> MS> expand, what function do they perform ?
> >> >> MS> Man, this really smacks of a "just like Japan" condition.
> >> >>
> >> >> >> -----Original Message-----
> >> >> >> From: Daniel Goncharoff [mailto:thegonch@xxxxxxxxxx]
> >> >> >> Sent: Tuesday, September 10, 2002 12:32 AM
> >> >> >> To: realtraders@xxxxxxxxxxxxxxx
> >> >> >> Subject: Re: [RT] Money supply charts
> >> >> >>
> >> >> >>
> >> >> >> Actually, the lack of CP issuance says more about the level
> >> of fear of
> >> >> >> more corporate surprises. Remember that with CP, the bank that
> >> >> >> underwrites it has the default risk. These days, who is
> >> going to take
> >> >> >> that risk?
> >> >> >>
> >> >> >> For the historical perspective that the collapse of Penn
> >> Central in the
> >> >> >> early 70s (IMS) nearly brought down Goldman Sachs.
> >> >> >>
> >> >> >> Regards
> >> >> >> DanG
> >> >> >>
> >> >> >> "M. Simms" wrote:
> >> >> >> >
> >> >> >> > Wow - Commercial Paper activity......lowest in more
> than a decade.
> >> >> >> > That kind of says it all as far as overall business activity.
> >> >> >> >
> >> >> >> > > -----Original Message-----
> >> >> >> > > From: Terry B. Rhodes [mailto:trhodes3@xxxxxxxxx]
> >> >> >> > > Sent: Monday, September 09, 2002 11:40 AM
> >> >> >> > > To: realtraders@xxxxxxxxxxxxxxx
> >> >> >> > > Subject: Re: [RT] Money supply charts
> >> >> >> > >
> >> >> >> > >
> >> >> >> > >
> >> >> >> > > > We haven't seen an update of your money supply chart on
> >> >> >> > > realtraders in awhile. Could you publish an updated
> >> chart? Thanks.
> >> >> >> > > >
> >> >> >> > >
> >> >> >> > > You can view money supply charts here
> >> >> >> > >
> >> >> >> > > http://www.martincapital.com/charts.htm
> >> >> >> > >
> >> >> >> > > regards,
> >> >> >> > >
> >> >> >> > > tbr
> >> >> >> > >
> >> >> >> > >
> >> >> >> > > To unsubscribe from this group, send an email to:
> >> >> >> > > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >> >> >> > >
> >> >> >> > >
> >> >> >> > >
> >> >> >> > > Your use of Yahoo! Groups is subject to
> >> >> >> http://docs.yahoo.com/info/terms/
> >> >> >> > >
> >> >> >> > >
> >> >> >> > >
> >> >> >> >
> >> >> >> >
> >> >> >> > To unsubscribe from this group, send an email to:
> >> >> >> > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >> >> >> >
> >> >> >> >
> >> >> >> >
> >> >> >> > Your use of Yahoo! Groups is subject to
> >> >> >> http://docs.yahoo.com/info/terms/
> >> >> >>
> >> >> >>
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> >> >> >>
> >> >> >>
> >> >> >>
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> >> >> >>
> >> >> >>
> >> >>
> >> >>
> >> >>
> >> >>
> >> >>
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> >> >>
> >> >>
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> >> >>
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> >> >>
> >> >>
> >> >>
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> MS> http://docs.yahoo.com/info/terms/
> >>>
> >>>
>
>
>
>
>
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