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Lobby Okay Hustle topic #21512

Subject: "relationships between all of them:" Previous topic | Next topic
jest
Member since Jun 18th 2006
1783 posts
Wed Feb-18-09 09:49 PM

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32. "relationships between all of them:"
In response to In response to 26


  

          

the point that keeps coming up is that all of the banks are interconnected in a big web of trades, loans, and repos.

this is called interbank lending.

so the daisy chain is as follows:

1) the gov't issues bonds,
2) investment banks sell them to commercial banks,
3) the commercial banks use the bonds as collateral to borrow & lend money,
4) the money is lent back to investment banks,
5) who re-lend the money to hedge funds,
6) who buy more bonds as trading vehicles.


7) meanwhile, the fed buys treasuries in the fed funds market, boosting the trading values of bonds for all parties involved, by lowering interest rates.


this is why banking seems so complicated; just know that every bank is tightly integrated into other, and are dependent on each other for survival.

  

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How the world works [View all] , jest, Mon Feb-16-09 08:07 PM
 
Subject Author Message Date ID
MYTHS
Feb 16th 2009
1
The Stock Market
Feb 16th 2009
2
whats a good balance of stocks/bonds
Mar 08th 2009
105
RE: whats a good balance of stocks/bonds
Mar 09th 2009
106
There isn't a direct relationship between
Apr 11th 2009
113
better yet
Apr 13th 2009
114
I would like to invest in the Bond Market
Dec 27th 2011
130
      something like that
Dec 30th 2011
131
Arithmetic Math vs. Geometric Math [or (2+0)/2 != 1 ]
Feb 17th 2009
18
Portfolio Theory, Rational Investors, etc,
Feb 18th 2009
25
RE: Portfolio Theory, Rational Investors, etc,
Feb 18th 2009
37
Taxes & Real Estate
Feb 19th 2009
38
THE BOND MARKET
Feb 16th 2009
3
Equity capital vs. debt capital
Feb 16th 2009
4
Capital vs. Money
Feb 17th 2009
19
      RE: Capital vs. Money
Jun 05th 2009
123
Bond Investing
Feb 16th 2009
5
Credit Ratings
Feb 16th 2009
11
      Importance of Credit Ratings
Feb 16th 2009
12
      European stocks hit by Moody's latest bank warning - AP
Feb 17th 2009
13
      Key Detail on Credit Ratings:
Feb 25th 2009
85
           they aren't regulated either
Feb 26th 2009
86
                They're like Gangsters
Feb 26th 2009
88
                     LOL
Mar 02nd 2009
96
                     ratings agencies are exempted from lawsuits by rule of law
Apr 16th 2009
115
Duration
Feb 16th 2009
8
Commercial paper/money markets
Feb 16th 2009
9
Mortgages
Feb 16th 2009
10
The US Treasury market
Feb 17th 2009
20
      Agency Securities (Fannie & Freddie)
Feb 17th 2009
21
      Central banking and the treasury market
Feb 17th 2009
22
      Banks and the treasury market
Feb 17th 2009
23
Interest Rates
Feb 16th 2009
6
Taylor rule
Feb 16th 2009
7
can you explain in the simplest terms possible how interest rates work?
Mar 04th 2009
99
      grossly oversimplified:
Mar 04th 2009
100
           i'm too stupid to understand any of what you just said.
Mar 04th 2009
101
can you outline a day in the life of a bond?
Feb 17th 2009
14
cosign! like if i wanted to buy a bond and play out the process...
Feb 17th 2009
15
it's hard for people like us to do
Feb 17th 2009
17
You might also try a bond mutual fund or closed end fund
Feb 18th 2009
24
good question
Feb 17th 2009
16
don't know if this was covered, but basic fixed income
Mar 11th 2009
108
THE BANKING SYSTEM
Feb 18th 2009
26
Central banks
Feb 18th 2009
27
Commercial banks
Feb 18th 2009
28
Capital/reserve requirements
Feb 18th 2009
29
      M2 explains bank capital:
Apr 25th 2009
116
Investment banks
Feb 18th 2009
30
Hedge funds
Feb 18th 2009
31
      you should of gone much more into detail about hedge funds
Mar 01st 2009
94
           That's like a book in of itself though
Mar 02nd 2009
95
                Another thought
Mar 02nd 2009
97
International finance
Feb 18th 2009
33
      Counterparties & interbank lending
Feb 18th 2009
34
           LIBOR & the TED Spread
Feb 18th 2009
35
           Modern bank runs, liquidity & interbank lending
Feb 18th 2009
36
           Repos Explained
Dec 24th 2011
129
THE CREDIT BUBBLE
Feb 19th 2009
39
A Chronology
Feb 19th 2009
40
Timeline - Global Credit Crunch - Swipe from the BBC
Feb 24th 2009
74
      thanks, that was great
Feb 24th 2009
77
Modern & Structured Finance - How the world really works
Feb 21st 2009
45
The shadow banking system
Feb 21st 2009
46
The rise of hedge funds
Feb 21st 2009
47
      Leverage ratios
Feb 21st 2009
49
Derivatives (financial weapons of mass destruction)
Feb 21st 2009
48
Quantitative finance
Feb 21st 2009
50
The Black Swan
Feb 21st 2009
51
Dynamic hedging
Feb 21st 2009
52
k_orr just made a fantastic post on this
Feb 24th 2009
78
Fraudulent accounting, SIVs, & Enron
Feb 21st 2009
53
Enron Envy
Feb 21st 2009
54
Mark to model accounting
Feb 21st 2009
55
Securitization
Feb 21st 2009
56
      The Repeal of the Glass-Steagall Act
Feb 21st 2009
57
      CDOs
Feb 21st 2009
59
           ABCP (Asset Backed Commercial Paper)
Feb 21st 2009
60
           embedded leverage
Feb 21st 2009
61
                Credit Default Swaps
Feb 21st 2009
62
THE GREAT DELEVERAGING (where we are now)
Feb 21st 2009
63
      mortgage finance & mortgage equity withdrawals
Feb 21st 2009
64
      The end of leverage
Feb 21st 2009
65
      Bear Stearns
Feb 21st 2009
66
      LEHMAN & AIG
Feb 21st 2009
67
           TARP
Feb 21st 2009
68
                The Bottom Line Is........
Feb 21st 2009
69
                THE SOVEREIGN DEBT CRISIS
Aug 28th 2011
127
      9% Nationally, 20% on the West Coast.......
Feb 24th 2009
83
      Adding $0.99 - AIG & Bank Capitalization
Feb 24th 2009
82
           that's another reason the ratings agencies should be beaten
Feb 25th 2009
84
                It's fucking retarded
Feb 26th 2009
90
what's a toggle bond?
Feb 20th 2009
41
it's sort of like an option ARM mortgage
Feb 20th 2009
43
can you talk about M1-M3?
Feb 20th 2009
42
RE: can you talk about M1-M3?
Feb 20th 2009
44
so what does this all mean?
Feb 21st 2009
58
what dont you understand?
Feb 23rd 2009
71
Are regular business as dependent on credit as the finance industry?
Feb 22nd 2009
70
RE: Are regular business as dependent on credit as the finance industry?
Feb 23rd 2009
72
Import/Export is all about Credit.
Feb 24th 2009
75
Yes
Feb 24th 2009
81
How did you amass this knowledge?
Feb 24th 2009
73
b/c financial advisers are con men
Feb 24th 2009
79
what did you read in the beginning?
Mar 05th 2009
104
      i learned everything from google & the public library
Mar 09th 2009
107
It's more opinion than knowledge. n/m
Apr 26th 2009
117
      Care to add on and/or correct the opinion so that it's more factual?
Apr 27th 2009
118
           RE: Care to add on and/or correct the opinion so that it's more factual?
Apr 27th 2009
119
           and what is knowledge if not opinion? nm
Apr 28th 2009
120
                I'm not criticizing...just stating an observation...
May 03rd 2009
121
                     that's fair; i agree
May 05th 2009
122
What are your thoughts on the future markets?
Feb 24th 2009
76
there are shenanigans going on with the exchanges too
Feb 24th 2009
80
related youtubage: Crisis of Credit Visualized
Feb 26th 2009
87
It seemed ok, but i agree, it just focuses on housing.
Feb 26th 2009
91
Legalized Criminality @ Hedge Funds
Feb 26th 2009
89
criminality isn't important,
Feb 27th 2009
92
      My Bad
Mar 03rd 2009
98
i love this post so much i'd take it out to red lobster
Feb 27th 2009
93
Did someone ask about Iceland? (Vanity Fair Swipe)
Mar 05th 2009
102
fascinating
Mar 05th 2009
103
Placemarker
Mar 12th 2009
109
is there only one way to securitize? if so, what is it?
Mar 24th 2009
110
securtiziation refers to a way to market a cashflow to investors
Apr 04th 2009
111
      you have got to be kidding me
Apr 04th 2009
112
Great post.
Jul 01st 2009
124
RE: How the world works
Jul 04th 2009
125
thx
Jul 08th 2009
126
i forgot how awesome this thread was/is..
Aug 28th 2011
128
sometimes i forget stuff & re-read it as a reminder
Dec 30th 2011
132
BUMP
May 09th 2013
133

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