Yes, and early LTRO repayments to "signal health to the market".

And yes.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

Jalopnik: That Zero Hedge Article On Unsold Cars Is Bullshit (May 18, 2014)

It is an admittedly appealing idea to think that automakers, unable to sell cars, are just wildly producing them and then dumping them around the world in an endless cycle of mass production hysteria. So much of the modern economy seems senseless and inexplicable, which is why an article like this seems to give some credence to the feeling many of us have inside that something is terribly wrong.

The visuals are strong, the headline is clear, and you almost don't have to read the article to viscerally understand the problem. I, more than anyone, get the appeal of this story because it seems to largely rip off an article I wrote -- including the images and headline -- more than five years ago (which itself was largely a rehash of a Guardian article).

...

There's even an update in the post where either the author, Vincent Lewis, or Tyler Durden -- ZH's mysterious author -- realized there was a fault in their knowledge and they say this:

UPDATE: Currently May 16th, 2014, all of these cars at the Nissan Sunderland test track have disappeared? Now I don't believe they have all suddenly been sold. I would guess they may have been taken away and recycled to make room for the next vast production run.

Well, if you don't want to believe that in five years they couldn't sell a few hundred cars at a price above the recycle rate then I can't help you, because you must be so paranoid you think that Fudgie The Whale is the secret symbol of the illuminati.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

With the Fed buying what are probably CDOs and buying them at face value, or par, they are effectively trading new high powered money for trash at 50 cents on the dollar. So the TBTF entity gets cash for its illiquid asset. If, as likely, the operation is a repo the Fed, in theory, could demand that the recipient buy the 'asset' back. This probably doesn't constrain the recipient of QE because the exercise of that right by the Fed on any significant scale could bankrupt the bank, and, in any case, the whole point of the exercise was to help the financial sector.

"It is not necessary to have hope in order to persevere."

When the regulators turn a blind eye to the activities of the rich, only scams that are not big enough is illegal.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

...They're a cab company with an app. That is a viable business model. It's not a billion dollar one.

I do not recall that this question was dealt with in my Money and Banking course. From an SEC PDF: SEC Financial Responsibility Rules

SEC amended the net capital rule (Rule 15c3-1) in 1975 to establish uniform net capital standards for brokers and dealers' registered with SEC under Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act). With few exceptions, all broker-dealers registered with SEC must comply with this liquidity standard.' The primary purpose of this rule is to ensure that registered broker-dealers maintain at all times sufficient liquid assets to (1) promptly satisfy their liabilities-the claims of customers, creditors, and other broker-dealers; and (2) to provide a cushion of liquid assets in excess of liabilities to cover potential market, credit, and other risks if they should be required to liquidate. The rule achieves its purpose by prescribing a liquidity test that requires a broker-dealer to maintain the greater of a specified minimum dollar amount or specified percentage of net capital in relation to either aggregate indebtedness (generally all liabilities of the broker-dealer) or customer-related receivables (money owed to the broker-dealer by customers) as computed by the reserve requirements of Rule 15c3-3. The net capital rule thus enhances investor/customer& confidence in the financial integrity of broker-dealers and the securities market. The net capital rule applies only to the registered broker-dealer and does not apply to the broker-dealer's holding company or unregulated subsidiaries or affiliates.'

To me it is difficult to see which of the SEC and Federal Reserve is worst at prudential regulation.


"It is not necessary to have hope in order to persevere."

Mr. Market has once again decided This Time It's Different©

But if it's not broker credit, then what's the trick this time? What new story they tell investors to convince them that This Time It's Different? What's the biggest latest "financial innovation"?

_{*Lunatic*, n.
One whose delusions are out of fashion.}

From the chapter The Twilight of Illusion in The Great Crash:

(Sorry about the readability, there still seems to be a 600px limit on image height...)