Potentially complicated outcomes. I'd rather see the Fed work to split the megabanks.

Generally speaking, I think the Fed. has been doing an excellent job--much better than Congress, for example. I wonder about this move, however. Any further insight that another poster could provide would be useful.

-Laelth

... bonds have been the traditional safe place to hold 401K's and similar investment until after "the correction". Sounds like the fed is taking away that option.


I'd love to hear from our more expert members.

It's kind of a circular thing, too: if it's deemed municipalities could go bankrupt, then investors will have a harder time justifying to go there, which means it's more difficult to support projects, which means municipalities might die and go bankrupt, etc.

Is there a hint here that there is more hurt yet to come? I dunno....

I am in the business, and my company has very strict rules against posting anything business related onto internet message boards. My guess is mine is not the only firm which has that rule.

So my warning is to be careful with financial information on sites like DU.

Oftentimes, people who know what they're talking about are forbidden to post which leaves lots opf wrong information posted.

I don't think they'll even feel this.

are seeing in Detroit sounds like what Naomi Klein wrote about in her book.

The system is massively overloaded with debt - we go nowhere until enough of the bad debt is defaulted and written off. By pushing the bankruptcies down to the local level, the Fed can feign innocence.

debt money gets sucked into treasuries and the corporatocracy.

How come nobody questions why there is so much debt in the first place? Aside from what I think of the Fed and Wall Street, there's a big question about all of the towns and cities running in the red instead of operating within a strict budget.

for everyone but the very rich who may be able to pick up some bargain basement deals on libraries, schools, pools and cemetaries.

yes, this id prompting me to reconsider my US residency.

again. only ow under a Dem.

Damn.

more Detroit type crisis to take place.

I see no upside to this except this may spur more states to start their own publicly owned banks.

Perhaps this in turn will pull money away from the federal bank monopoly?

Thanks for the thread, 99thMonkey.

wish it were better nooz though .. sorry for that part.

Last edited Wed Sep 10, 2014, 11:09 PM - Edit history (1)

The plans of the plutocrats are getting real, and it does not look good for the rest of us.

in Detroit, San Bernardino. Stockton, et. al.

have been trial runs / camel's noses under the tent

fine tuning. working out the bugs.

now this opens the floodgates.

All of a sudden living in this country doesn't seem like such a great idea.

http://online.wsj.com/articles/banking-regulators-open-to-including-municipal-bonds-in-bank-financing-rule-1410284586

WASHINGTON—Federal banking regulators said they plan to revisit a decision to exclude municipal securities from a postcrisis rule aimed at ensuring banks have enough cash on hand to survive a crisis, saying they are open to allowing some debt issued by states and localities to count as a "safe" asset.

Top officials from three bank regulators—the Federal Reserve, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp.—told Senate lawmakers Tuesday they would consider altering a rule completed last week that requires banks to hold enough cash or cash-like assets to fund their operations for 30 days. Previously, only the Fed had expressed a willingness to alter the rule.

Municipal securities currently don't count as a "high-quality liquid asset" under the rule, which means they won't qualify under the new funding requirements. State and local officials have said the exclusion could prompt banks to retreat from the municipal debt markets, forcing governments to scale back spending on roads, schools and other infrastructure projects financed with municipal bonds. Banks play an increasingly important role in the market, having nearly doubled their ownership of municipal securities over the past decade to more than 11%, according to Fed data.

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It seems like muni's were excluded to to liquidity issues, not due to high quality or not. I don't know how real that issue is, and there maybe some bonds that are reasonably liquid and others which are not.

debt markets tend to operate on virtuous or vicious cycles--the safer the debt, the lower the interest rate charged, the less likely default is, the safer the debt . . . and the converse

that said, the regulators are feeling the heat over this and may revise their decision

they revise their decision

this is something of a warning sign--it will be a MAJOR problem if munis are considered a risky investment.

Thank you, 99th_Monkey. Great article.

education. This is seriously pisses me off.

Until now they have focused on looting Americans' bank accounts and looting personal assets and homes through debt. Now they will come after our municipal assets, schools, public treasures.

Detroit was a harbinger for the nation.

I don't have the education or knowledge-base to say anything about it: I wish I knew more, though - so, kick.