Browne says the banks should put their capital where their mouth is

bubblesmoney

According to the Bank of International Settlements, the world's total of derivatives investments, including the poorly understood credit default swap (CDS) market reached some $700 trillion at its height, or more than 20 times the world's total annual production! The American portion was about $419 trillion, or some 40 times America's annual production.
The essential problem is that these inherently risky securities were used as collateral for loans. The fall in their value resulted in massive deleveraging. Of course, not all derivatives are yet flawed, or toxic. So, it can be assumed that, in the absence of a total financial collapse, only a limited number will default.
However, if a conservative assumption were made that only some two percent of derivatives fail, it would still amount to some $14 trillion. The American share would be about $8 trillion, or almost one year of GDP once that figure declines to a sustainable level. The estimated total capitalization of all U.S. banks is some $1.6 trillion. But, this amounts to only 20 percent of the potential American liability.
So far, American citizens have been forced to provide financial institutions with nearly $2 trillion in additional bailouts. This brings the total of current U.S. banking capital to some $3.6 trillion, still less than half of the potential problem, leaving a massive $4.4 trillion shortfall. In light of this, even noted bearish economist Nouriel Roubini's estimate of a $3.6 trillion shortfall appears to be too optimistic.

Reports of Profits While Banks Fail

Eureka! Creative Accounting Solves Banking Crisis!

The problem with the banks isn't all the crappy securities and loans they're loaded up with.
It's not that they took on too much excessive risk, lending against assets whose value is plunging.
It's not that they funded asinine private equity deals, stupid commercial construction deals, and dumb home purchases.
It's that they have to mark their book of securities made up of these bundled loans to market. And they argue that the prices they could get for those securities in the markets are “artificially” low — or in some cases, that there is NO market for them.
If only they could avoid marking those assets to market, or use their super- duper net present value and cash flow MODELS — which, surprise, surprise, say the “real” value of those securities is higher — then the banking system would be fine. We could all go back to the wonderful world of yesteryear.

ps: its a different Browne in the 1st article obviously

leveller2911

I keep going back to this thread bubbles, then just pulling back from posting, but I just have to, I can't help myself,its like a release for me........

GORDON BROWN IS THE MOST ARROGANT [EMAIL="W@ANKER"]W@ANKER[/EMAIL] I HAVE THE MIS-PLEASURE OF EVER SEEING,HE REALLY SHOULD BE SECTIONED.

Im sorry all ,I know you may think I may as well not bothered posting at all if all I can post is negative coments .Truth is I just couldn't hole back.:rolleyes:

littlemrtinkle

Gordon clown belongs in a circus:beer:

scousethife

Is this the 'prudence' brown,

or the country is utterly knackered under '11 years of me' brown

MrFonzerelli

leveller2911 wrote: »

I keep going back to this thread bubbles, then just pulling back from posting, but I just have to, I can't help myself,its like a release for me........

GORDON BROWN IS THE MOST ARROGANT W@ANKER I HAVE THE MIS-PLEASURE OF EVER SEEING,HE REALLY SHOULD BE SECTIONED.

Have you ever met Peter Mandelson? <rhetorical>

leveller2911

littlemrtinkle wrote: »

Gordon clown belongs in a circus:beer:

Yep, I would suggest a freak show too. The man is so full of his own p1ss and importance,arrogance,patronising [EMAIL="tw&#64;t"]!!!!!![/EMAIL]. I would agree Im not adding much to the thread but hey when Gordon starts adding something true and positive to the country I will start making positive post towards the idiot..:D

leveller2911

MrFonzerelli wrote: »

Have you ever met Peter Mandelson? <rhetorical>

Mr Fonz, whenever Mandelson is on the television I just have to switch channels.Theres a man I do hope gets what he deserves when he,s at the gates of heaven and asks St Peter if he can come in..My grandad always said "it takes a real man to say sorry" oh how right he was.

chopperharris

leveller2911 wrote: »

My grandad always said "it takes a real man to say sorry" oh how right he was.

It takes an even bigger one to never have the need to.

And a disgusting one to do it at a time when simpathy in his favour from a personal tragedy....there I said it.

bubblesmoney

i think there is a bit of confusion going on here.

it was browne i quoted and not brown.

John Browne is ................................ a distinguished former member of Britain's Parliament who served on the Treasury Select Committee, as Chairman of the Conservative Small Business Committee, and as a close associate of then-Prime Minister Margaret Thatcher. .............served as a principal advisor to Mrs. Thatcher's government on issues related to the Soviet Union, ....................... A graduate of the Royal Military Academy Sandhurst, ..........and retired British army major, John served as a pilot, parachutist, and communications specialist in the elite Grenadiers of the Royal Guard.
..........careers in British politics and the military, ....... significant background, spanning some 37 years, in finance and business. After graduating from the Harvard Business School, .............. as an investment banker. .................... During his career he has served on the boards of numerous banks and international corporations.............frequent guest on CNBC's ...........