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    Sid and FinancyHamilton Nolan
    3/15/16 4:02pm

    [T]he main reason that they decided to put all these businesses under one roof was to obscure the cost and risk of each activity.

    Diversification of risk does not equal intentional obfuscation. Misguided, or not, in principle or in action, it is a legitimate end in itself.

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      20 Shades of Grey including PorpoiseSid and Financy
      3/15/16 4:09pm

      Except they ARE hiding the grift. If you think they are doing this out of the goodness of their hearts, or even to just make a decent profit as part of a smoothly working capitalistic system... well just wait til the next meltdown. This is all about outright thievery.

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      bcallawaySid and Financy
      3/15/16 4:10pm

      I just spent two hours at an ethics and professionalism CLE. I’ll bet the speaker would be pretty disappointed with your cavalier attitude toward Wall Street shenanigans.

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    ReburnsABurningReturnsHamilton Nolan
    3/15/16 3:58pm

    Does he have a particular size threshold in mind?

    How would he deal with the fact that financial sector capital inevitably consolidates, because there are massive economies of scale to bank consolidation?

    You might prevent all of your little subsidiaries from grouping back together, but it is tremendously easy to sell gigantic chunks of assets in the financial sector. Consolidation would be inevitable.

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      RobertMadooReburnsABurningReturns
      3/15/16 4:02pm

      I’m no wonky technocrat so take it with a grain of salt, but maybe there would be rules against consolidation past a certain threshold.

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      Paul DimitrovReburnsABurningReturns
      3/15/16 7:08pm

      Actually, Citibank tried to consolidate...and eventually became such a behemoth that they couldn’t function.

      “Economies of scale” are not endless things...and financial sector consolidation is not some immutable law of nature. It’s not gravity. We can prevent is simply and with little effort: break up the Big Four, and pass laws to prevent re-consolidation of the sector. Easy peasy.

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    WhatthefoxsaysHamilton Nolan
    3/15/16 4:01pm

    Returning the banks to the partnership model? LOLOLOL. Asking Wall Street bankers to return trillions of dollars to investors will have the same effect of screaming into the void. Bernie’s goals for reform seem positively realistic in comparison.

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      Darius Miles in "The Perfect Score"Whatthefoxsays
      3/15/16 5:07pm

      The thing that kind of amuses me here is that literally the only people on the planet with the right kind of experience for something like this work for the big banks already. I assume, judging by everything emanating from Bernie Sanders, that he would avoid, when possible, hiring the Antonio Weisses of the world to work for his regulatory agencies and Cabinet departments.

      But, then, who do you hire to oversee this kind of stuff? The career technocrat folks in Washington, while smart and competent, simply don’t have the experience necessary to unwind something the size of Citi.

      Also, another key issue: what happens to the shareholders and the current leadership of the banks? I’m far from expert on this, but I assume you more or less have to pursue a buyout to get back to a partnership. A common side-effect of buyouts is that the people doing the buying out get incredibly fucking rich. Seems not to comport with the Sanders anger with millionaires and billionaires.

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      Paul DimitrovDarius Miles in "The Perfect Score"
      3/15/16 7:16pm

      Huh?

      Most of the Big Four are simple amalgamations of regional banks. We’d un-do to them what they did over the course of the last view decades; ie, no more B of A, we’d have regional banks like Nations, Seafirst, Cal Fed.

      You know, all the banks they greedily gobbled up.

      We’d then cleave off, and wind down, the investment arms of these zombie squid.

      Presumably, current stockholders would gain stocks in the pieces of what was once a whole.

      We have experience with this: we broke up Ma Bell in the 80s.

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    Dave Hamilton Nolan
    3/15/16 3:57pm

    I was reliably informed by Mr. Beck et. al. that gold was the only safe way to survive the next financial meltdown!

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      caekislove-caekingitupDave
      3/15/16 4:01pm

      Don’t forget survival seeds! Easily divisible and infinitely barterable!

      PS: Chrome says “barterable” isn’t a word and Chrome is WRONG

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      whotakethDave
      3/15/16 4:04pm

      I once had a coworker who, in the middle of the recession, stated that gold was the best place to park one’s money. I asked that given how the price of gold at that point was just constantly going up and up, how was it different from the housing bubble we’d just gone through. He turned around to protest, but his face read like a lightbulb just went off.

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    ThidrekrHamilton Nolan
    3/15/16 4:08pm

    The only question I have with this plan is whether it really is about setting up a stable financial system or if it’s about punishing it. The U.S. has this habit of declaring its problems “exceptional” (American exceptionalism!), as if no other country in the world has ever faced America’s problems before, but other countries—quite notably, Canada—have even bigger banks by market share with less competition (again, Canada basically has five banks), but they’re able to rein in any abuses through heavy government regulation. Is there a reason the U.S. can’t do the same?

    I’d certainly agree, though, that the current U.S. system—gigantic banks with loose regulation—has not served the nation well.

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      XrdsAlumThidrekr
      3/15/16 4:21pm

      It strikes me in its broad outlines as being about basic stability: making banking businesses support themselves, promoting competition, reducing speculation, placing fidiciury duty to clients and shareholders first, disincentivizing extremely risky speculation and needless volatility, discouraging the securitization of everything under the sun.

      That said, the industry culture is very resistant to those changes, and they’ve bought off enough politicians in both parties that if none of this happened after 2008 it won't happen now.

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      BIMming ItThidrekr
      3/15/16 5:30pm

      Because the idea of breaking up the banks is less offensive to most Americans than the words “government regulation”. That’s the best explanation I can think of.

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    Vitamin VHamilton Nolan
    3/15/16 4:00pm

    I just watched “The Big Short.” Had read the book years ago and wondered, “Why has nothing changed?” Now I watched the movie and my anger is renewed. The best part was when they stated that the prices can’t remain high for the CDOs unless there is outright fraud going on. That really struck me. How can there be fraud and no one went to jail? All of this is to say, breaking them up is one part of the puzzle, but getting rid of outright gambling that’s happening with our money is also an important solution, even if the banks stay as they are.

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      chiralVitamin V
      3/15/16 4:04pm

      Simple. Money is a superpower.

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      20 Shades of Grey including PorpoiseVitamin V
      3/15/16 4:07pm

      Answer: The ones committing the fraud, the ones enforcing the rules against fraud, hell the ones MAKING the rules, are all in on the grift, so there is little incentive to change or prosecute.

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    BananaJewHamilton Nolan
    3/15/16 5:40pm

    1) Canada has and had since the 30s a universal bank model with a higher concentration of assets than the US even now has. Not many crisis. Ditto Norway or Sweden or a number of other socialist democracies you admire without knowing any details of

    2) LTCM blew up despite being a partnership model. The idea that partnerships dont blow up is comical, every hedge fund is a partnership and as you note many of them blow out.

    These childish proscriptions are exactly why taking people like you is impossible. For someone who gets nominally paid — and obviously clickbait is all you care about — to write about issues of inequality, finance and economics you manage to come off as ignorant as a first year Vassar political science kid. Without the excuse of being a millenial.

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      You might be wrong.BananaJew
      3/15/16 5:59pm

      Do you think the level of regulation and oversight of the banks in those countries is more palatable to freedom-lovin’ Americans than turning a bunch of businesses into even more businesses?

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      BananaJewYou might be wrong.
      3/15/16 8:46pm

      But you are just presuming that the level of oversight is higher in Canada, just like Hamilton’s expert’ presumes that breaking up the banks is the only way to do it. The actual answer is ‘its complicated’, which is why you look at people who go into the guts of legislation on bank regulation and in the guts of bank’s activities. Unfortunate like all socialists, Hamilton has a simple, Manichean view that matches the tea party. THOSE PEOPLE are bad. PUNISH THEM and it will all be good.

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    VanNostrandHamilton Nolan
    3/15/16 4:01pm

    Come on guys, the libertarians already figured this out in a simple four step plan:

    End the FED!

    Gold Standard!

    Abolish the IRS!

    Stop the CHEMTRAILS!

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      caekislove-caekingitupHamilton Nolan
      3/15/16 3:55pm
      GIF
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        TheEvilAttorneycaekislove-caekingitup
        3/15/16 3:59pm

        HamNo is cleaning out the virtual story closet today. It has all the feeling of a yard sale just before your house is foreclosed on.

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      Gawker's ComeuppanceHamilton Nolan
      3/15/16 4:20pm

      I wish somebody would break YOU up into something. God you are annoying. Never stop complaining, always negative...

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        You might be wrong.Gawker's Comeuppance
        3/15/16 6:00pm

        What positive things are there to say about the US banking sector?

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        Gawker's ComeuppanceYou might be wrong.
        3/15/16 7:26pm

        Nothing. I am just railing against Hamilton Nolan because he just complaints constantly. Every one of his articles is him whining about something. If he doesn’t like it here that much, why does he stay?

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