Tuesday, February 24, 2009

The Dubious Parallels

Much is being made of the supposed "uncanny similarities" between "Atlas Shrugged" and the current financial crisis. Yet somehow I don't remember the chapter where at a press conference to announce a new initiative aimed at reducing the regulatory burden on banks, "Representatives of four of the five government agencies responsible for financial supervision used tree shears to attack a stack of paper representing bank regulations. The fifth representative, James Gilleran of the Office of Thrift Supervision, wielded a chainsaw." and where "Two months after that event the Office of the Comptroller of the Currency, one of the tree-shears-wielding agencies, moved to exempt national banks from state regulations that protect consumers against predatory lending." In other words, contra Atlas, the regulations were being systematically repealed in the years prior to the crisis, not increased.



Caption: "June 3, 2003: Determined to cut red tape and reduce the regulatory burden are (l-r), Office of Thrift Supervision Director James Gilleran, Jim McLaughlin of the American Bankers Association, Harry Doherty of America's Community Bankers, FDIC Vice Chairman John Reich and Ken Guenther of the Independent Community Bankers of America"

43 comments:

Anonymous said...

Who has claimed that Atlas Shrugged has a chapter on repealing bank regulations? It seems to be only you saying it doesn't to try to engage in more ridicule. You: In other words, contra Atlas, the regulations were being systematically repealed in the years prior to the crisis, not increased.

Systematically repealed? There has been very little repealing. And to suggest this is contra Atlas Shrugged is ridiculous. The existing banking system is one of fiat money, and banks have a license to create money "out of thin air." If you believe Ayn Rand advocated fiat money and deregulation to give even greater license to the exploiters of fiat money, then you need to reread Atlas.

David said...

Oh, Daniel, you're so concrete bound. ;-)

Mark Plus said...

The existing banking system is one of fiat money, and banks have a license to create money "out of thin air."

I wish libertarians would get their talking points about fiat money and taxation straight. I notice that our fiat money doesn't look like "thin air" to libertarians when tax time comes around.

Anonymous said...

Obviously "out of thin air" is a metaphor, and it's no longer only "thin air" once created. At least paper or computer records are used. :-) But the ultimate backing is (1) a legally created monopoly to print more of it and/or (2) to issue government debt backed only by the coercive power to collect future taxes to repay it.

Anonymous said...

In the comments to "ARI's Practical Solution" Nyquist wrote: This is yet another example of how Objectivists use the vagueness of concepts to equate dissimilar things.

Replace "Objectivists" with "Barnes". He saw the word "deregulation" and blithely assumed Ayn Rand and other Objectivists would approve.

Red Grant said...

___________________________________

Replace "Objectivists" with "Barnes". He saw the word "deregulation" and blithely assumed Ayn Rand and other Objectivists would approve. - anon
___________________________________




Does this mean then you believe Ayn Rand and other Objectivists would not approve of deregulation?

Anonymous said...

Red Grant: Does this mean then you believe Ayn Rand and other Objectivists would not approve of deregulation?

What sort of deregulation? :-)

Red Grant said...

___________________________________

Does this mean then you believe Ayn Rand and other Objectivists would not approve of deregulation? - Red Grant

2/26/2009 06:11:00 PM
===================================

What sort of deregulation? :-) - anon

2/26/2009 07:46:00 PM
___________________________________






Deregulation in the sense you have referred to as in your previous post presented below:








___________________________________

Replace "Objectivists" with "Barnes".

He saw the word

"deregulation"

and blithely assumed Ayn Rand and other Objectivists would approve. - anon

2/26/2009 05:57:00 AM


___________________________________

Anonymous said...

Red Grant, the answer you seek is in the first Anonymous comment.

Daniel Barnes said...

You think? Anonymous 1's comment is obscure, even to himself I suspect.

Anonymous said...

Barnes has a knack for projecting his own confusions onto others.

Daniel Barnes said...
This comment has been removed by the author.
Daniel Barnes said...

Well, what is Anon 1's point? Let's try to find it.

In para one, he brilliantly concludes that as Atlas Shrugged does not in fact contain a chapter on repealing bank regulations, my remark must be intended as ridicule. Uh, duh!

In para 2, he then says...well, it's hard to know what he's saying. Is it that Rand can't make any contribution to the debate over government regulation of the financial sector until we have a fiat money environment? That she'd be not be in favour of less government regulation in the current fiat environment? Who knows? Attempts by other commentators to elicit specifics have been met with only cryptic vagaries, indicating that, just as I suggest, Anon does not really know what point he is trying to make.

Michael Prescott said...

I agree that the details of the current financial crisis bear little resemblance to anything in Atlas. However, in broader strokes there is a similarity.

Many people are exercised over what they see as the government's policy of rewarding people who caused the problem in the first place - not only bankers and brokers, but the deadbeat down the street who bought a house he knew he couldn't afford. They see it as the productive, responsible, conscientious members of society having to subsidize the unproductive, irresponsible, negligent members. Since this is a major theme of Atlas, it makes sense that the book would be garnering good buzz and strong sales right now. And I can't blame ARI for capitalizing on this opportunity.

Red Grant said...

___________________________________

Does this mean then you believe Ayn Rand and other Objectivists would not approve of deregulation? - Red Grant

2/26/2009 06:11:00 PM
===================================

What sort of deregulation? :-) - anon

2/26/2009 07:46:00 PM
===================================

Deregulation in the sense you have referred to as in your previous post presented below: - Red Grant on 2/26/2009 08:16:00 PM

___________________________________

Replace "Objectivists" with "Barnes".

He saw the word

"deregulation"

and blithely assumed Ayn Rand and other Objectivists would approve. - anon

2/26/2009 05:57:00 AM
===================================

Red Grant, the answer you seek is in the first Anonymous comment. - anon on 2/26/2009 11:21:00 PM
___________________________________





An excerpt from first Anonymous comment regarding Ayn Rand:



___________________________________

The existing banking system is one of fiat money, and banks have a license to create money "out of thin air."

If you believe Ayn Rand advocated fiat money and deregulation to give even greater license to the

exploiters of fiat money,


then you need to reread Atlas.

2/25/2009 07:50:00 AM
-----------------------------------
He saw the word

"deregulation"

and blithely assumed Ayn Rand and other Objectivists would approve. - anon

2/26/2009 05:57:00 AM
___________________________________





Does this mean then it's okay for Objectivists to decry government subsidies, regulations, but still try to profit from greater licenses granted to the exploiters of fiat money?

even though Ayn Rand wouldn't have approved of?

___________________________________

http://www.reuters.com/article/pressRelease/idUS105425+16-Sep-2008+BW20080916




Heritage Bank's $60 million-plus capital raise will represent a
record for stand-alone start-up bank in the State of New York, where
the bank is to be headquartered.


A key component in the bank's
successful capital raise strategy was securing investments from
multiple institutions, including asset management firm FrontPoint
Partners LLC, a subsidiary of Morgan Stanley:

___________________________________


http://www.morganstanley.com/about/press/articles/3820.html

FrontPoint's investment teams, which employ strategies that seek to deliver risk-adjusted absolute returns uncorrelated to broad market indices, will continue managing their respective funds once this acquisition is complete.

The FrontPoint management and investment teams will also invest a significant portion of the proceeds from this deal in the FrontPoint funds.

In addition, key members of the firm's management team will assume leadership roles within

Morgan Stanley and its asset management business, including:

Gil Caffray, Managing Partner, will become Vice Chairman of MSIM and remain Portfolio Manager of the FrontPoint Multistrategy Fund;

Mike Kelly, Partner and Head of Manager Selection, will become the Head and Chief Investment Officer of MSIM's Absolute Return Strategies group;

Arthur Lev, Partner and General Counsel, will become General Counsel of MSIM;

Joanne Pace, Partner and COO, will become the Chief Operating Officer of MSIM, working closely with

Owen Thomas, President and Chief Operating Officer of MSIM, to lead the division on a day-to-day basis; and

Daniel Waters, Partner and Head of the Client Advisory Group, will become MSIM's Head of U.S. Institutional Distribution.
___________________________________




___________________________________

http://www.mercurynews.com/columns/ci_11787989

Morgan Stanley has received $10 billion in government bailout money.
___________________________________



and private equity fund
Carpenter Community BancFund (an affiliate of Carpenter & Company),
who have each committed to purchase a 9.9% share of the total
offering.


An additional commitment of $2.25 million was received from
private equity firm

BH Equity Research

___________________________________

Yaron is a founder and Managing Partner at BH.

He frequently lectures at major corporations on the topics of finance, investments, and



ethics.

http://www.bhequity.com/team_YaronBrook.htm
___________________________________



___________________________________

http://www.aynrand.org/site/News2?page=NewsArticle&id=21337

Stop the Bailouts
September 22, 2008

Washington, D.C.--“Over the last year,” said

Yaron Brook, executive director of the Ayn Rand Institute,

“the central planners at the Federal Reserve and the Treasury Department have pretended that by bailing out homeowners, then bailing out investment banks, then bailing out Fannie Mae and Freddie Mac, they were wisely ‘steering’ the economy to protect us against some undefined ‘systemic risk.’

“But the mounting financial problems reveal that Paulson and Bernanke are as clueless as any other central planners who try to control an entire economy.


They are not saving us from anything; they are delaying some of the pain that necessarily follows from a Fed-induced credit bubble, and

redistributing that pain to

innocent victims.



They are punishing responsible individuals and rewarding


irresponsible individuals.



“The bailouts must stop. The government must make clear that from now on, those who are in financial trouble must turn to the private market for help if they are to avoid failure; the government must no longer foist their failures on others, and invite another crisis in the future.” - Yaron Brooks
___________________________________




___________________________________

https://www.hbnysecure.com/press_release/detail/id/30




Herald National Bank to Participate in FDIC’s Transaction Account Guarantee Program (TAGP)



Herald National Bank,

formerly Heritage Bank,

N.A., (NYSE Alternext US: HNB) announced today that is has elected to participate in the

Federal Deposit Insurance Corporation's (FDIC) Transaction Account Guarantee Program (TAGP).


01/16/2009
Download a PDF
NEW YORK (BUSINESS WIRE) — Herald National Bank, formerly Heritage Bank, N.A., (NYSE Alternext US: HNB) announced today that is has elected to participate in the Federal Deposit Insurance Corporation's (FDIC) Transaction Account Guarantee Program (TAGP).

Under the program, all non-interest-bearing transaction accounts are fully

guaranteed by the FDIC for the entirety of the account. This additional coverage will be extended by the FDIC through December 31, 2009, and is separate from the coverage currently available under the FDIC's general deposit insurance rules.

“Through our participation in the Transaction Account Guarantee Program and recent increases to basic FDIC insurance limits, our banking teams are able to put Herald’s strong capital base and clean balance sheet to work for clients by delivering a broader scale of products and services,” comments David S. Bagatelle, President and CEO of Herald National Bank.
___________________________________






___________________________________

http://www.forbes.com/2008/07/18/fannie-freddie-regulation-oped-cx_yb_0718brook.html


Further promoting a sense of security, every major financial institution in America--both commercial banks and investment banks--was implicitly protected by the quasi-official policy of "too big to fail." The "too big to fail" doctrine holds that, when they risk insolvency, large financial institutions (like Countrywide or Bear Stearns) must be bailed out through a network of government bodies including the

Federal Deposit Insurance Corporation,

the Federal Home Loan Banks and the Federal Reserve. - Yaron Brooks
___________________________________





or does this mean Yaron Brooks and possibly his affiliates at ARI are nothing more than bunch of frauds and crooks posing as

Objectivists?

Daniel Barnes said...

Yes I agree Mike, there are broad brush similarities. As there are with Marx. And if I were the ARI I'd be pushing Atlas now too. My point is that these broad similarities are more prophetic than profound - the parallels are not non-existent, but dubious.

Daniel Barnes said...

Red,

If a conservative is a liberal who's been mugged, I suppose a statist is a libertarian who's in the FDIC program...;-)

Red Grant said...

___________________________________

Red,

If a conservative is a liberal who's been mugged, I suppose a

statist is a libertarian who's in the FDIC program...;-) - Daniel
___________________________________






Indeed. Talk about a wolf in sheep's clothing!

This kind of behavior should have been denounced without hesitation by none other than Objectivists themselves, but mostly there are just pathethic excuses such as,

"Oh, but he had done so much for the cause of Objectivism!"

It's like a "Christian" evangelist driving brand new mercedez and living in 10 rooms McMansion while talking about example of Jesus and talking about the rich young man, and how it's easier for a camel to go through the eye of the needle than for a rich man to enter the kingdom of heaven.


Btw. I'm still waiting for Jay to respond to my post in Part 19 thread.

Anonymous said...

Here is my point. Ayn Rand knew the difference between a fiat currency and a gold standard. Whether or not she knew the mechanics of how commercial banks can create money "out of thin air", I don't know. (She clearly knew governments inflate by printing money.) Suppose she knew and a new law others labeled "deregulation" made it much easier for banks to create money "out of thin air". Do you believe she would have approved of such "deregulation"? I don't. On the other hand, she may have approved of deregulation that let banks operate more efficiently, such as allowing ATMs, despite banks being government fiefdoms in a fiat money system. I suspect she would have approved the deregulation of airline fares and routes that occurred about 30 years ago.

Barnes' starting post is about some bankers celebrating some "deregulation". The post was in response to higher sales of Atlas Shrugged, which portrays more and more government controls strangling the economy. Why did he post it? To assert or suggest that the parallels between Atlas Shrugged and the present economy are dubious because there has been a wee bit of "deregulation" that wasn't in Atlas Shrugged? If yes, it sweeps aside the massive amount of controls that has grown like weeds for decades. Atlas Shrugged does not depict a credit crunch or housing bubble either, but so what? Was it to assert or suggest that "deregulation", which Rand generally approved, played a key role in the crisis, contra Atlas Shrugged? Does Barnes even know why? If he clearly explains his purpose, then all readers might benefit. All he has supplied so far, to use his words, are "cryptic vagaries."

He gave no clue about the kind of "deregulation" the bankers celebrated. (What happened two months later is irrelevant.) Although Barnes' purpose is far from clear, I figured it fit his habit of cheap shots at Ayn Rand and her fans. I took it as an innuendo that Rand, or any of her fans, would have approved the "deregulation" celebrated by the bankers, without question, simply because it bore the label "deregulation."

Barnes: Is it that Rand can't make any contribution to the debate over government regulation of the financial sector until we have a fiat money environment?

I kindly overlook his blunder and suggest that his question is another cheap shot at Rand or me or both.

Red Grant said...

___________________________________

I took it as an innuendo that Rand,

or any of her fans, would have approved the "deregulation" celebrated by the bankers, without question, simply because it bore the label "deregulation." - anon
___________________________________




___________________________________

https://www.hbnysecure.com/press_release/detail/id/30




Herald National Bank to Participate in FDIC’s Transaction Account Guarantee Program (TAGP)



Herald National Bank,

formerly Heritage Bank,

N.A., (NYSE Alternext US: HNB) announced today that is has elected to participate in the

Federal Deposit Insurance Corporation's (FDIC) Transaction Account Guarantee Program (TAGP).


01/16/2009
Download a PDF
NEW YORK (BUSINESS WIRE) — Herald National Bank, formerly Heritage Bank, N.A., (NYSE Alternext US: HNB) announced today that is has elected to participate in the Federal Deposit Insurance Corporation's (FDIC) Transaction Account Guarantee Program (TAGP).

Under the program, all non-interest-bearing transaction accounts are fully

guaranteed by the FDIC for the entirety of the account. This additional coverage will be extended by the FDIC through December 31, 2009, and is separate from the coverage currently available under the FDIC's general deposit insurance rules.

“Through our participation in the Transaction Account Guarantee Program and recent increases to basic FDIC insurance limits, our banking teams are able to put Herald’s strong capital base and clean balance sheet to work for clients by delivering a broader scale of products and services,” comments David S. Bagatelle, President and CEO of Herald National Bank.
___________________________________



___________________________________

http://www.forbes.com/2008/07/18/fannie-freddie-regulation-oped-cx_yb_0718brook.html


Further promoting a sense of security, every major financial institution in America--both commercial banks and investment banks--was implicitly protected by the quasi-official policy of "too big to fail." The "too big to fail" doctrine holds that, when they risk insolvency, large financial institutions (like Countrywide or Bear Stearns) must be bailed out through a network of government bodies including the

Federal Deposit Insurance Corporation,

the Federal Home Loan Banks and the Federal Reserve. - Yaron Brooks
___________________________________



___________________________________

http://www.aynrand.org/site/News2?page=NewsArticle&id=21337

Stop the Bailouts
September 22, 2008

Washington, D.C.--“Over the last year,” said

Yaron Brook, executive director of the Ayn Rand Institute,

“the central planners at the Federal Reserve and the Treasury Department have pretended that by bailing out homeowners, then bailing out investment banks, then bailing out Fannie Mae and Freddie Mac, they were wisely ‘steering’ the economy to protect us against some undefined ‘systemic risk.’

“But the mounting financial problems reveal that Paulson and Bernanke are as clueless as any other central planners who try to control an entire economy.


They are not saving us from anything; they are delaying some of the pain that necessarily follows from a Fed-induced credit bubble, and

redistributing that pain to

innocent victims.



They are punishing responsible individuals and rewarding


irresponsible individuals.



“The bailouts must stop. The government must make clear that from now on, those who are in financial trouble must turn to the private market for help if they are to avoid failure; the government must no longer foist their failures on others, and invite another crisis in the future.” - Yaron Brooks
___________________________________




An additional commitment of $2.25 million was received [by Heritage Bank, later changed to Herald National Bank] from
private equity firm

BH Equity Research

___________________________________

Yaron is a founder and Managing Partner at BH.

He frequently lectures at major corporations on the topics of finance, investments, and



ethics.

http://www.bhequity.com/team_YaronBrook.htm
___________________________________






Anon, does this mean then Yaron Brook, the head of ARI is a fraud and a crook as far as his 'philosophical adherence' to Ayn Rand is concerned?

Anonymous said...

Red Grant: Anon, does this mean then Yaron Brook, the head of ARI is a fraud and a crook as far as his 'philosophical adherence' to Ayn Rand is concerned?

No. If you believe it does, then explain.

Daniel Barnes said...

Anon:
>Ayn Rand knew the difference between a fiat currency and a gold standard...Suppose she knew and a new law others labeled "deregulation" made it much easier for banks to create money "out of thin air".Do you believe she would have approved of such "deregulation"? I don't.

Well, on what evidence do you base this belief? Providing other examples of government deregulation of which she approved - such as airlines - hardly supports your claim. (And why do you think ATMs are a good example of deregulation??) They in fact support the thrust of my post. What you need to come up with is, say, some government regulations of markets that she approved of. Then you might have something more than your personal speculation.

>Why did he [Barnes] post it?...Was it to assert or suggest that "deregulation", which Rand generally approved, played a key role in the crisis, contra Atlas Shrugged?

Er...yes. Obviously. Not exactly an unusual assertion.

>I kindly overlook his blunder and suggest that his question is another cheap shot at Rand or me or both.

What blunder?

Anonymous said...

Dubious Dan: What you need to come up with is, say, some government regulations of markets that she approved of.

How does that relate to parallels? Anyway, it's easy -- regulations against counterfeiting.

Dubious Dan: Er...yes. Obviously. Not exactly an unusual assertion.

It's not unusual and typical from leftists, but wrong. I didn't know you thought like Nancy Pelosi. Soros is a great investor and a lousy economist. His Quantum Fund co-founder Jim Rogers puts him to shame. Soros is a political leftist. As Rogers knows well the cause of the current crisis is not a free market, but government controls. In your link Soros says regulators are to blame only because they didn't control enough.

When he gets to the real estate bubble, government gets no blame at all. He describes regulators as ignorant and therefore innocent.

Dubious Dan: What blunder?

Holy cow! You can't see your blunder even after I cite the sentence. You said " . . . until we have a fiat money environment?" Meaning we don't have fiat money now?!

Red Grant said...

___________________________________

Red Grant: Anon, does this mean then Yaron Brook, the head of ARI is a fraud and a crook as far as his 'philosophical adherence' to Ayn Rand is concerned?

No. If you believe it does, then explain. - anon
-----------------------------------
The existing banking system is one of fiat money, and banks have a license to create money "out of thin air."

If you believe Ayn Rand advocated fiat money and deregulation to give even greater license to the exploiters of fiat money, then you need to reread Atlas. - anon

2/25/2009 07:50:00 AM
___________________________________





Does this mean then you believe someone who calls himself an

Objectivist is not being a fraud and a crook

while trying to profit from investing in an exploiter of fiat money

even though Ayn Rand herself (according to anon) was opposed to fiat money

and

deregulation for the purpose of giving greater license to the exploiters of fiat money?





___________________________________

As Rogers knows well the cause of the current crisis is not a

free market, but government controls. - anon
___________________________________








Who decides what is a free market?

Anonymous said...

Red Grant: Who decides what is a free market?

Who decides what "is" means? :-)

Red Grant said...

___________________________________

As Rogers knows well the cause of the current crisis is not a

free market, but government controls. - anon on 3/01/2009 05:52:00 AM

===================================

Who decides what is a free market? - Red Grant on 3/01/2009 11:22:00 AM

===================================

Who decides what "is" means? :-) - anon on 3/01/2009 12:22:00 PM
___________________________________







Does the question of who decide(s) what "is" means has any funtional/topical relevance to the understanding of the question of

"Who decides what is a free market?"?

or

you do not know what "is" means?






___________________________________

As Rogers knows well the cause of the current crisis is not a

free market, but government controls. - anon
___________________________________








In fact, what is a free market?









___________________________________

Red Grant: Anon, does this mean then Yaron Brook, the head of ARI is a fraud and a crook as far as his 'philosophical adherence' to Ayn Rand is concerned?

No. If you believe it does, then explain. - anon
-----------------------------------
The existing banking system is one of fiat money, and banks have a license to create money "out of thin air."

If you believe Ayn Rand advocated fiat money and deregulation to give even greater license to the exploiters of fiat money, then you need to reread Atlas. - anon

2/25/2009 07:50:00 AM
___________________________________





Does this mean then you believe someone who calls himself an

Objectivist is not being a fraud and a crook

while trying to profit from investing in an exploiter of fiat money

even though Ayn Rand herself (according to anon) was opposed to fiat money

and

deregulation for the purpose of giving greater license to the exploiters of fiat money?

Anonymous said...

Red Grant, are you a crook and a fraud simply because you live in a country with fiat money?

Daniel Barnes said...

Anon:
>Holy cow! You can't see your blunder even after I cite the sentence.

Oh yeah, I see. I meant to write "non-fiat." Sorry, I thought you meant something a bit more major. Incidentally, don't know about you, but I always find it much harder to proof stuff on screen. Always easier in hardcopy for some reason?

>It's not unusual and typical from leftists, but
wrong.

It's a sign of the times that billionaire speculators can be nowadays called "leftists."Of course this is no different from the anarchists calling Objectivists paternalistic state-worshippers. (Heh...I remember Tibor Machan writing a whole essay about why they shouldn't do that, cos it hurts his feelings) But hey, that's essentialism for you...;-)

Of course, I don't think deregulation was soley to blame. There is a complex mix of government and private screwups, as well as some major theoretical problems they share, like their approach to risk management. But I'm a Popperian, I would say that.

Rand was vehemently against all forms of government involvement in the market, unless to prevent force or fraud. But she never bothered her head as to what this would mean in practice. . Because such big-talkin' rhetoric is always conveniently light on details of how it would actually work, as Greg has already pointed out. Rand never even worked out a way of credibly funding basic government functions like voting or the military without compulsory taxation, let alone the mechanisms for preventing and punishing the highly complex frauds of the world of finance. But then practical criticism like this is always answered by appeals to a hypothetical future in which the root of all problems has been removed, just as the Marxists promised once capitalism had been overthrown. Once the contradictions have been removed everything just solves itself! So now that we've fast-forwarded to the end of your line of argument, we can leave it there. Whether Rand would have agreed with this or that particular govt deregulation is certainly not clear, and will not be clarified by re-reading Atlas Shrugged. You might as well re-read some tea leaves.

As for Jim Rogers, I hope he's right. He's bullish on agriculture and I live in New Zealand...;-)

Red Grant said...

___________________________________

Red Grant: Anon, does this mean then Yaron Brook, the head of ARI is a fraud and a crook as far as his 'philosophical adherence' to Ayn Rand is concerned?

No. If you believe it does, then explain. - anon
-----------------------------------
The existing banking system is one of fiat money, and banks have a license to create money "out of thin air."

If you believe Ayn Rand advocated fiat money and deregulation to give even greater license to the exploiters of fiat money, then you need to reread Atlas. - anon

2/25/2009 07:50:00 AM
===================================

Does this mean then you believe someone who calls himself an

Objectivist is not being a fraud and a crook

while trying to profit from investing in an exploiter of fiat money

even though Ayn Rand herself (according to anon) was opposed to fiat money

and

deregulation for the purpose of giving greater license to the exploiters of fiat money? - Red Grant on 3/01/2009 03:00:00 PM

===================================

Red Grant, are you a crook and a fraud simply because you live in a country with fiat money? - anon on 3/01/2009 04:03:00 PM
___________________________________






Ah!, but the difference is I never claimed to be an Objectivist!

Yaron did.


Is that what an Objectivist does, trying to profit from investing in an exploiter of fiat money and preaching for deregulation for the purpose of giving greater license to the exploiters of fiat money?

while proclaiming to follow the Ayn Rand's 'philosophy'?



Please take a look at one of Yaron's articles below.






___________________________________

The Gains from

Takeover Deregulation: Evidence from the End of Interstate Banking Restrictions


Yaron Brook,


Robert Hendershott and Darrell Lee
Additional contact information
Yaron Brook: Santa Clara University,
Robert Hendershott: Santa Clara University,
Darrell Lee: Kennesaw State University

Journal of Finance, 1998, vol. 53, issue 6, pages 2185-2204

Abstract: This paper uses

interstate banking deregulation to explore the benefits of takeover deregulation and how these benefits are distributed across different firms.


We find large and significant abnormal returns around the Interstate Banking and Branching Efficiency Act of 1994 which imply


it created $85 billion of value in the banking industry.

Consistent with an active market for corporate control allowing beneficial consolidation and providing needed discipline, there is a strong negative relationship between banks' abnormal returns and their prior performance. Consistent with managerial entrenchment limiting takeover discipline, banks with higher insider ownership, lower outside block ownership, and/or less independent boards have lower abnormal returns. Copyright The American Finance Association 1998.




http://econpapers.repec.org/article/blajfinan/v_3A53_3Ay_3A1998_3Ai_3A6_3Ap_3A2185-2204.htm
___________________________________










___________________________________

As Rogers knows well the cause of the current crisis is not a

free market, but government controls. - anon on 3/01/2009 05:52:00 AM

===================================

Who decides what is a free market? - Red Grant on 3/01/2009 11:22:00 AM

===================================

Who decides what "is" means? :-) - anon on 3/01/2009 12:22:00 PM

===================================


Does the question of who decide(s) what "is" means has any funtional/topical relevance to the understanding of the question of

"Who decides what is a free market?"?

or

you do not know what "is" means? - Red Grant on 3/01/2009 03:00:00 PM
___________________________________








___________________________________

As Rogers knows well the cause of the current crisis is not a

free market, but government controls. - anon
===================================

In fact, what is a free market? - Red Grant on 3/01/2009 03:00:00 PM
___________________________________

Daniel Barnes said...

While we're on the topic of fraud, this is a must-read from the excellent William Black.

Anonymous said...

Barnes: It's a sign of the times that billionaire speculators can be nowadays called "leftists."

I called Soros 'leftist' due to his political views, period.

Barnes: Rand was vehemently against all forms of government involvement in the market, unless to prevent force or fraud. But she never bothered her head as to what this would mean in practice.

Your 'unless' clause is very important. Your next sentence is overstated ("never) but essentially correct and may explain many knee-jerk reactions by many of her fans.

Barnes: So now that we've fast-forwarded to the end of your line of argument, we can leave it there.

Fine, as I exit stage right. And thanks for the link on control fraud.

Red Grant: you do not know what "is" means?

Yes, I know, including multiple ways "is" is used. I only rhetorically asked who decides what it means, which is far from saying I don't know what it means.

Anonymous said...

More on Soros' economic ignorance and anti-free market philosophy are at the URL's below. Adding to the first one, even neoclassical economists recognized the flaws in the perfect competition model and wrote about "imperfect competition" and "monopolistic competition" decades ago.

http://www.marketoracle.co.uk/Article4422.html

http://www.mtholyoke.edu/acad/intrel/soros.htm

Daniel Barnes said...

Anon:
>More on Soros' economic ignorance and anti-free market philosophy are at the URL's below.

Thanks for the links. Gerard Jackson's argument seems odd, as he and Soros are both attacking the same thing - modern economics - for the same reasons - the omission of fallibility. Jackson's vitriol (which comes as standard anyway) is probably more to do with the fact that Soros is a Popperian. This, to a Misean, is worse than even being an Objectivist...;-)

Thanks for the discussion.

Anonymous said...

Barnes: Gerard Jackson's argument seems odd, as he and Soros are both attacking the same thing - modern economics - for the same reasons - the omission of fallibility.

I think it's more than that. They have quite different ideas about equilibrium, too.

Red Grant said...

___________________________________

As Rogers knows well the cause of the current crisis is not a

free market, but government controls. - anon on 3/01/2009 05:52:00 AM

===================================

Who decides what is a free market? - Red Grant on 3/01/2009 11:22:00 AM

===================================

Who decides what "is" means? :-) - anon on 3/01/2009 12:22:00 PM

===================================


Does the question of who decide(s) what "is" means has any funtional/topical relevance to the understanding of the question of

"Who decides what is a free market?"?

or

you do not know what "is" means? - Red Grant on 3/01/2009 03:00:00 PM
===================================

Yes, I know, including multiple ways "is" is used.- anon on 3/02/2009 05:14:00 AM
___________________________________



So does this mean you understand my question of "Who decide(s) what is a free market?"?

If so,

and you do not deny that question["Who decide(s) what is a free market?"] is topically relevant to the subject at hand[the nature of free market], then

why can you not answer the question of who decide(s) what is a free market?


or


you hiding something?




___________________________________

I only rhetorically asked who decides what it["is"] means, which is far from saying I don't know what it means. - anon on 3/02/2009 05:14:00 AM
___________________________________



If you had understood what "is" means, then what was your purpose of asking that rhetorical question, "Who decides what "is" means?"?


And how is your question, "who decides what it["is"] means" topically relevant to the subject at hand [the nature of free market]?


___________________________________

As Rogers knows well the cause of the current crisis is not a

free market, but government controls. - anon
===================================

In fact, what is a free market? - Red Grant on 3/01/2009 03:00:00 PM
___________________________________









___________________________________

Red Grant: Anon, does this mean then Yaron Brook, the head of ARI is a fraud and a crook as far as his 'philosophical adherence' to Ayn Rand is concerned?

No. If you believe it does, then explain. - anon
-----------------------------------
The existing banking system is one of fiat money, and banks have a license to create money "out of thin air."

If you believe Ayn Rand advocated fiat money and deregulation to give even greater license to the exploiters of fiat money, then you need to reread Atlas. - anon

2/25/2009 07:50:00 AM
===================================

Does this mean then you believe someone who calls himself an

Objectivist is not being a fraud and a crook

while trying to profit from investing in an exploiter of fiat money

even though Ayn Rand herself (according to anon) was opposed to fiat money

and

deregulation for the purpose of giving greater license to the exploiters of fiat money? - Red Grant on 3/01/2009 03:00:00 PM

===================================

Red Grant, are you a crook and a fraud simply because you live in a country with fiat money? - anon on 3/01/2009 04:03:00 PM
===================================

Ah!, but the difference is I never claimed to be an Objectivist!

Yaron did.


Is that what an Objectivist does, trying to profit from investing in an exploiter of fiat money and preaching for deregulation for the purpose of giving greater license to the exploiters of fiat money?

while proclaiming to follow the Ayn Rand's 'philosophy'?



Please take a look at one of Yaron's articles below. - Red Grant on 3/01/2009 05:18:00 PM







___________________________________

The Gains from

Takeover Deregulation: Evidence from the End of Interstate Banking Restrictions


Yaron Brook,


Robert Hendershott and Darrell Lee
Additional contact information
Yaron Brook: Santa Clara University,
Robert Hendershott: Santa Clara University,
Darrell Lee: Kennesaw State University

Journal of Finance, 1998, vol. 53, issue 6, pages 2185-2204

Abstract: This paper uses

interstate banking deregulation to explore the benefits of takeover deregulation and how these benefits are distributed across different firms.


We find large and significant abnormal returns around the Interstate Banking and Branching Efficiency Act of 1994 which imply


it created $85 billion of value in the banking industry.

Consistent with an active market for corporate control allowing beneficial consolidation and providing needed discipline, there is a strong negative relationship between banks' abnormal returns and their prior performance. Consistent with managerial entrenchment limiting takeover discipline, banks with higher insider ownership, lower outside block ownership, and/or less independent boards have lower abnormal returns. Copyright The American Finance Association 1998.




http://econpapers.repec.org/article/blajfinan/v_3A53_3Ay_3A1998_3Ai_3A6_3Ap_3A2185-2204.htm
___________________________________





And below is a post from anon within this thread, in fact, very first post.

___________________________________

The existing banking system is one of fiat money, and banks have a license to create money "out of thin air."

If you believe

Ayn Rand advocated

fiat money and deregulation

to give even greater license to

the exploiters of fiat money,

then you need to reread Atlas. - anon on 2/25/2009 07:50:00 AM
___________________________________




What do you say, anon? Your own words attributing to Ayn Rand, and Atlas shrugged!

Anonymous said...

I wrote: Red Grant, are you a crook and a fraud simply because you live in a country with fiat money?

Red Grant replied: Ah!, but the difference is I never claimed to be an Objectivist! Yaron did.

That difference is irrelevant. Yaron has no control over what kind of money system the U.S. has, just like you.

Red Grant: Is that what an Objectivist does, trying to profit from investing in an exploiter of fiat money and preaching for deregulation for the purpose of giving greater license to the exploiters of fiat money?

He is not doing so, and your claim that he is is simply a smear. And farewell to your obnoxiousness.

Wells said...

What happened to the American Financial Markets in 2008,2009,and probably a few more years after that.

I'm sure you all know the story about how subprime mortgages crashed, and how giant banking entities like Bear Sterns, Lehman Brothers, IndyMac, and others have fallen.
If you come to Ayn Rand Contra Human Nature, you probably even have an opinion about what caused it, sometimes it is summed up as 'To much regulation' or 'Not enough regulation'.

Here's my opinion;

The problems of the American Financial System are caused several things.

(1) Banks have divorced the risk in lending someone money from the decision to lend.
Back in the olden days, before debt securitization, if you failed to pay a bank back money borrowed, the bank lost money. This actually caused an interesting behavior amongst borrowers. Essentially, if a bank would loan you money, you could assume that it was a safe to borrow said money.
However, with debt securitization, this is no longer the case. The bank's risk is divorced from your probability to pay, so they will loan money regardless. Consumer behavior has not yet caught up. This is crazy to me since financial planning books have said that banks will lend you more money than it is prudent to borrow since the mid 90's. This is also the reason why people get pre-approved credit card offers in the mail.

(2) Banks have figured out that you can 'mine' low credit worthy persons for cash. This is actually closely related to point (1) above. Basically the name of this game is to give someone as much credit as possible then make them pay interest forever. Sumerians invented this, they also invented words like 'slavery'. The point is to target people with low credit, so such laws as the Community Reinvestment Act really do not come into play, banks would lend predatorly to people covered by the CRA if that act existed or not. The operations that did this rate in regulatedness from the largest financial institutions on Wall Street to fly-by-nite ops with no appreciable regulation that are ending up on ml-implode.com.

(3) The United State's Federal Government Has borrowed entirely too much cash. Ronald Reagen Screwed us, George H.W. Bush tried to put sanity back into the budget when he raised new taxes, Bill Clinton succeeded, W. Broke what Clinton fixed, Baruak Obama seems to be doing what G-dubs did before him. My evidence is here. This is making it harder to respond to current or future crises. The feeling that the government is having is similar to the feeling a man has with no savings, maxxed out lines of credit, and then their refrigerator breaks.

(4) Credit Default Swaps. There is no such thing as mortgage insurance. Insurance implies several things, it implies that the insurer has the money to cover the losses if they are on the losing end of an insurance contract. It implies that the insurance contract owner has an interest in the underlying asset and that being on the winning end of an insurance contract is a suboptimal condition.
None of this is true. You can buy Credit Default Swaps for any bond on Earth, whether you own it or not, you can sell a Credit Default Swap right now if you can convince people that you have any cash at all. Your average ARCHN reader probably doesn't have friends with a hedge fund. However there are consultants that can get you into the world of high-finance. Bernard L. Madoff is going to need a job one day. Perhaps you can retain his services. This used to be illegal. There was a law against Bucket Shops that applied to this type of trade. It was actually repealed. The problem with these things is that one security could have bunches of CDS attached to it, so the default of $1 billion in bonds could cause the loss of $60 billion in CDS. Causing more pain in the markets than the original default should.

(5) Government Guarantees for private debt. In the past, the government guaranteed the debt of Fannie Mae, Feddie Mac, and Salle Mae. This was stupid. It allowed these entities to borrow at a lower cost than they otherwise should have been able to. It also allowed them to rack up more leverage than similar private firms would have. It probably killed the market for similar private firms. Now the government also guarantees the debt of Morgan Stanley, JP Morgan Chase, American Insurance Group, and General Motors. Next we will probably see the State of California, and American Express added to this list. This increases the 'shadow' debt of the Government (see point (3)), and causes sick firms to have an advantage against healthy firms.

(6) Leverage Baby. People borrowed too much money in service to the greed for yet more cash. See also points (1) and (2), this is the flip side of those coins.
But First how leverage works. Let's say that you have an asset worth $1 million. You can borrow say $900,000 to buy it. Or you can bay cash. Hopefully the asset increases in value. Let's say 10% ROI is the return as a percentage of the original cash investment.
(a) Conservative Cash
Asset = $1,000,000
Loan = $0
Investment = $1,000,000
--time passes--
Asset = $1,100,000
Loan = $0
ROI = 10%
(b) Leverage Baby!
Asset = $1,000,000
Loan = $900,000
Investment = $100,000
--time passes--
Asset = $1,100,000
Loan = $900,000
ROI = 100%!!!
Yes, Leverage is a beautiful thing on the way up. Suppose you are on the way down.
(a) Cash
Asset = $1,000,000
Cash = $1,000,000
--Time--
Asset = $800,000
losses = 20%
(b) Leverage
Asset = $1,000,000
Loans = $900,000
Cash = $100,000
--Time--
Asset=$800,000
Loans=$900,000
losses=200%!?!?! <--That number is more than 100%
Leverage Hurts on the way down. And guess what, we're on the way down. When you lose more than you have, you have this feeling as though you are drowning. That's why the financial situation is known as being Under Water. The government actually regulates how much leverage financial institutions have, it also indirectly regulates how much leverage you can have on a primary residence if you are getting a loan guaranteed by the government on account of being a poor person who wants to buy a house. Loopholes around both classes regulations are commonly used.

(7) The Foreign Trade Deficit is too high. Any country that imports more stuff than they export over the long term will end up broke. Trade deficits also are a harbinger of borrowed money, since that's the only kind of money that Americans can get to pay for all of this stuff without getting foreign exchange the old fashioned way which is by selling stuff to foreigners. There are regulations here, some of them are about National Security (Don't sell Crypto to the Iranians), some of them are more politically motivated (The tariff on foreign sugar is to benefit Florida Sugar makers and makers of High Fructose Corn Syrup). Lots of these regulations are stupid.

For those on the regulation argument that are keeping score.
(1) There's no reg that will fix this.
(2) There is too little regulation. Bankruptcy judges should be given absolute power over debt, even mortgages and especially student loans.
(3) Too much government in general, or at last more government then the taxpayers really feel like paying for.
(4) Not enough regulation of Credit Default Swaps. Maybe you should only be allowed to buy a CDS if you own the security being 'insured'. You should only be able to sell a CDS if you have cash to cover losses.
(5) Too much regulation with regards to guaranteeing private debt for no reason.
(6) Regulations concerning leverage would be fine if there were no bailouts or guarantees of private debt. This is something that the free market can regulate well. Over leveraged people end up broke when times are bad, that's not a bug, that's a feature. Poor people should rent, their housing costs will be lower, and they will become rich people sooner if they do that rather than carry an onerous mortgage.
(7) Not much can be done here, but maybe we can try to replace oil with something made in America.

What should you do?

Save your money, Max out your 401(k) if you have one, Update your resume maybe, Pay down debt if you have it.

Red Grant said...

___________________________________

I wrote: Red Grant, are you a crook and a fraud simply because you live in a country with fiat money?

Red Grant replied: Ah!, but the difference is I never claimed to be an Objectivist! Yaron did.
===================================

That difference is irrelevant. - anon on 3/02/2009 07:36:00 PM

===================================





So you believe the difference attributed to whether a person who never claimed to be an Objectivist not following Ayn Rand's 'philosophy'

and

a person who not only claims to be an Objectivist, but also the head of Ayn Rand Institute, not following Ayn Rand's 'philosophy'

is

irrelevant

when it comes to deciding whether a person is a fraud or not?


___________________________________

Yaron has no control over what kind of money system the U.S. has, just like you. - anon
===================================


Did I call him a fraud because he has no control over what kind of money system the U.S.?


Yaron did have control over how to, where to invest the money entrusted to him in BH Equity.

He did not have to invest the money in an exploiter of fiat money system.




___________________________________

Red Grant: Is that what an Objectivist does, trying to profit from investing in an exploiter of fiat money and preaching for deregulation for the purpose of giving greater license to the exploiters of fiat money?

He is not doing so and your claim that he is is simply a smear. And farewell to your obnoxiousness. - anon on 3/02/2009 07:36:00 PM
___________________________________





___________________________________

Yaron is a founder and Managing Partner at BH.

He frequently lectures at major corporations on the topics of finance, investments, and



ethics.

http://www.bhequity.com/team_YaronBrook.htm
___________________________________






___________________________________

Heritage Bank's $60 million-plus capital raise will represent a
record for stand-alone start-up bank in the State of New York, where
the bank is to be headquartered.


A key component in the bank's
successful capital raise strategy was securing investments from
multiple institutions, including asset management firm FrontPoint
Partners LLC, a subsidiary of Morgan Stanley:


An additional commitment of $2.25 million was received from
private equity firm

BH Equity Research

http://www.reuters.com/article/pressRelease/idUS105425+16-Sep-2008+BW20080916
___________________________________






___________________________________

https://www.hbnysecure.com/press_release/detail/id/30




Herald National Bank to Participate in FDIC’s Transaction Account Guarantee Program (TAGP)



Herald National Bank,

formerly Heritage Bank,

N.A., (NYSE Alternext US: HNB) announced today that is has elected to participate in the

Federal Deposit Insurance Corporation's (FDIC) Transaction Account Guarantee Program (TAGP).


01/16/2009
Download a PDF
NEW YORK (BUSINESS WIRE) — Herald National Bank, formerly Heritage Bank, N.A., (NYSE Alternext US: HNB) announced today that is has elected to participate in the Federal Deposit Insurance Corporation's (FDIC) Transaction Account Guarantee Program (TAGP).

Under the program, all non-interest-bearing transaction accounts are fully

guaranteed by the FDIC for the entirety of the account. This additional coverage will be extended by the FDIC through December 31, 2009, and is separate from the coverage currently available under the FDIC's general deposit insurance rules.

“Through our participation in the Transaction Account Guarantee Program and recent increases to basic FDIC insurance limits, our banking teams are able to put Herald’s strong capital base and clean balance sheet to work for clients by delivering a broader scale of products and services,” comments David S. Bagatelle, President and CEO of Herald National Bank.
___________________________________






___________________________________

http://www.forbes.com/2008/07/18/fannie-freddie-regulation-oped-cx_yb_0718brook.html


Further promoting a sense of security, every major financial institution in America--both commercial banks and investment banks--was implicitly protected by the quasi-official policy of "too big to fail." The "too big to fail" doctrine holds that, when they risk insolvency, large financial institutions (like Countrywide or Bear Stearns) must be bailed out through a network of government bodies including the

Federal Deposit Insurance Corporation,

the Federal Home Loan Banks and the Federal Reserve. - Yaron Brooks
___________________________________









___________________________________

The Gains from

Takeover Deregulation: Evidence from the End of Interstate Banking Restrictions


Yaron Brook,


Robert Hendershott and Darrell Lee
Additional contact information
Yaron Brook: Santa Clara University,
Robert Hendershott: Santa Clara University,
Darrell Lee: Kennesaw State University

Journal of Finance, 1998, vol. 53, issue 6, pages 2185-2204

Abstract: This paper uses

interstate banking deregulation to explore the benefits of takeover deregulation and how these benefits are distributed across different firms.


We find large and significant abnormal returns around the Interstate Banking and Branching Efficiency Act of 1994 which imply


it created $85 billion of value in the banking industry.

Consistent with an active market for corporate control allowing beneficial consolidation and providing needed discipline, there is a strong negative relationship between banks' abnormal returns and their prior performance. Consistent with managerial entrenchment limiting takeover discipline, banks with higher insider ownership, lower outside block ownership, and/or less independent boards have lower abnormal returns. Copyright The American Finance Association 1998.




http://econpapers.repec.org/article/blajfinan/v_3A53_3Ay_3A1998_3Ai_3A6_3Ap_3A2185-2204.htm
___________________________________

Daniel Barnes said...

Good posts all, esp Wells and Red Grant's intriguing point. Would love to comment more but am a bit short of time.

Anonymous said...

Barnes: Good posts all, esp Wells and Red Grant's intriguing point.

I very much agree about Wells' post and the opposite for Red Grant's.

Wells: You should only be able to sell a CDS if you have cash to cover losses.

Of course, the big problem is what might happen after the seller enters the contract. He may appear to have adequate cash at the start, but later on be overwhelmed by growing losses. If CDS were exchange traded, the problem would be alleviated. The exchange could require the seller add enough collateral to cover the growing losses or have his position closed.

A note about Red Grant. I stopped replying to this obnoxious, logic-challenged smear artist. A few minutes ago I clicked on his name and then "my web page" -- which shows he is a liar -- and "audio clip", both of which prominantly display some of the most evil men in history. If Red likes communism, as these links suggest, then by his own standard he is a crook and a fraud by not living in Cuba or North Korea.

Here are the URL's if he changes the links:
http://www.youtube.com/watch?v=bSw0DBT8SkU&feature=related
http://www.youtube.com/watch?v=8MS2vZLW9Xk&feature=PlayList&p=BB941FBB97C689DB&index=22

Red Grant said...

___________________________________

A note about Red Grant. I stopped replying to this obnoxious, logic-challenged smear artist. A few minutes ago I clicked on his name and then "my web page" -- which shows he is a liar -- and "audio clip", both of which prominantly display some of the most evil men in history. If Red likes communism, as these links suggest, then by his own standard he is a crook and a fraud by not living in Cuba or North Korea.

Here are the URL's if he changes the links:
http://www.youtube.com/watch?v=bSw0DBT8SkU&feature=related
http://www.youtube.com/watch?v=8MS2vZLW9Xk&feature=PlayList&p=BB941FBB97C689DB&index=22 - anon who defends that fraud/crook Yaron

3/05/2009 04:33:00 AM
___________________________________



Ha! Is this the best/worst you can do?

anon who defends Yaron?


Those web sites are basically for facetious purpose!

People who have been reading my posts already know that!

Instead take a look at the books that I like:

Doesn't contain any refernce to Das Kapital, is there?

In fact, the books and the authors I admire the most as Greg knows,

are Vilfredo Pareto, and Oswald Spengler, hardly friends of Communism!

In fact, as much as I despise Ayn Rand,

I do like the character of Howard Roark and have said so.

In fact, if Ayn Rand and those who claim to follow her 'philosophy' had had half as much courage and integrity (as I see) as Howard Roark were portrayed to have possessed,

I would have had far more respect for Ayn Rand and the 'Objectivists'.



Please everyone, go to my blog and look at the books that I like, and see for yourself how shallow fellow this anon who defends that fraud/crook Yaron is.


Just to make sure that I'm not a smear artist,

I'll provide my evidence why Yaron is a crook and a fraud.

It doesn't have anything to do with Objectivism,

It has everything to do with his false faith in Objectivism and the standard of Ayn Rand as claimed by anon who defends Yaron.



Here's what this anon who likes Yaron had to say about Ayn Rand:


___________________________________

The existing banking system is one of fiat money, and banks have a license to create money "out of thin air."

If you believe Ayn Rand advocated fiat money and

deregulation

to give even greater license to

the exploiters of fiat money,

then you need to reread Atlas. - anon who defends Yaron on 2/25/2009 07:50:00 AM
___________________________________



and here's what that crook/fraud Yaron had to say about banking deregulation:


___________________________________

The Gains from

Takeover Deregulation: Evidence from the End of Interstate Banking Restrictions


Yaron Brook,


Robert Hendershott and Darrell Lee
Additional contact information
Yaron Brook: Santa Clara University,
Robert Hendershott: Santa Clara University,
Darrell Lee: Kennesaw State University

Journal of Finance, 1998, vol. 53, issue 6, pages 2185-2204

Abstract: This paper uses

interstate banking deregulation to explore the benefits of takeover deregulation and how these benefits are distributed across different firms.


We find large and significant abnormal returns around the Interstate Banking and Branching Efficiency Act of 1994 which imply


it created $85 billion of value in the banking industry.

Consistent with an active market for corporate control allowing beneficial consolidation and providing needed discipline, there is a strong negative relationship between banks' abnormal returns and their prior performance. Consistent with managerial entrenchment limiting takeover discipline, banks with higher insider ownership, lower outside block ownership, and/or less independent boards have lower abnormal returns. Copyright The American Finance Association 1998.




http://econpapers.repec.org/article/blajfinan/v_3A53_3Ay_3A1998_3Ai_3A6_3Ap_3A2185-2204.htm
___________________________________




and here's what Yaron had to say about FDIC:




___________________________________

http://www.forbes.com/2008/07/18/fannie-freddie-regulation-oped-cx_yb_0718brook.html


Further promoting a sense of security, every major financial institution in America--both commercial banks and investment banks--was implicitly protected by the quasi-official policy of "too big to fail." The "too big to fail" doctrine holds that, when they risk insolvency, large financial institutions (like Countrywide or Bear Stearns) must be bailed out through a network of government bodies including the

Federal Deposit Insurance Corporation,

the Federal Home Loan Banks and the Federal Reserve. - Yaron Brooks
___________________________________



and here's an exploiter of fiat money that Yaron has invested $2.25 million of the company he co-founded and manages:



___________________________________

Heritage Bank's $60 million-plus capital raise will represent a
record for stand-alone start-up bank in the State of New York, where
the bank is to be headquartered.


A key component in the bank's
successful capital raise strategy was securing investments from
multiple institutions, including asset management firm FrontPoint
Partners LLC, a subsidiary of Morgan Stanley:


An additional commitment of $2.25 million was received from
private equity firm

BH Equity Research

http://www.reuters.com/article/pressRelease/idUS105425+16-Sep-2008+BW20080916
___________________________________






___________________________________

Yaron is a founder and Managing Partner at BH.

He frequently lectures at major corporations on the topics of finance, investments, and



ethics.

http://www.bhequity.com/team_YaronBrook.htm
___________________________________





and here's what this exploiter of fiat money that Yaron had invested $2.25 million from the company he manages had to say about FDIC and other subsidy program from Federal government:


___________________________________

https://www.hbnysecure.com/press_release/detail/id/30




Herald National Bank to Participate in FDIC’s Transaction Account Guarantee Program (TAGP)



Herald National Bank,

formerly Heritage Bank,

N.A., (NYSE Alternext US: HNB) announced today that is has elected to participate in the

Federal Deposit Insurance Corporation's (FDIC) Transaction Account Guarantee Program (TAGP).


01/16/2009
Download a PDF
NEW YORK (BUSINESS WIRE) — Herald National Bank, formerly Heritage Bank, N.A., (NYSE Alternext US: HNB) announced today that is has elected to participate in the Federal Deposit Insurance Corporation's (FDIC) Transaction Account Guarantee Program (TAGP).

Under the program, all non-interest-bearing transaction accounts are fully

guaranteed by the FDIC for the entirety of the account. This additional coverage will be extended by the FDIC through December 31, 2009, and is separate from the coverage currently available under the FDIC's general deposit insurance rules.
___________________________________





Even worse, and shameless fact is this exploiter of fiat money claims to already have strong capital base and clean balance sheet,

another word, no troubled assets,

yet still partakes in Federal subsidy program

for greater profit.

Another word, this is worse than welfare/subsidy,

this is really a welfare fraud by financially sound company.


___________________________________
“Through our participation in the

Transaction Account Guarantee Program

and

recent increases to basic FDIC insurance limits,

our banking teams are able to put

Herald’s

strong capital base and

clean balance sheet

to work for clients by delivering a broader scale of products and services,” comments David S. Bagatelle, President and CEO of Herald National Bank.
___________________________________






The evidences are overwhelming and explicit and concrete.

This anon who defends Yaron the crook/fraud

had no rebuttals to my evidences

except calling me abusive names without the shredd of proof.



I rest my case.

JayCross said...

Red,

You like the Offspring? Noticed the kids aren't alright in your music list.

Red Grant said...

Yes, I happen to like that particular song.

Both the lyric and the rythem of the song expresses what I feel inside.