#45: On Banks, Bonds, and Bailouts.
Your ability to explain complex financial concepts/issues/trends in simple (yet powerful IMO) terms is just amazing!
"If the end goal is to build a financial system that is resilient to shocks, we might just have to let it face one. "
Great writing! 🤘🏽
"If the end goal is to build a financial system that is resilient to shocks, we might just have to let it face one."
Must, not "might", as many times and however often it takes right down to the individual level. There should never have been any bailouts. Not even considered. At some point, one can't help but think (or realize?) it's just a long series of opportunity-scams from "Great Financial Crisis" to Covid to Official ScamCoin Currency printing to foreign military interventions. It all certainly does work out well only for those at the top. Oh well, just shut-up and pay "your fair share".
Thanks for another great read!
I would be interested in you thoughts on the following
WSJ is reporting "Borrowers in their 20s and 30s reached 90-day or more delinquency on credit-card debt and auto loans at a higher rate in the fourth quarter of 2022 than before the pandemic."
" In the fourth quarter, they fell behind on credit-card payments by 90 days or more at a rate similar to that in 2009, at the end of the financial crisis."
"... student-loan payments are expected to restart this summer after the Supreme Court acts on litigation challenging a Biden plan for mass student-debt cancellation."
“...it’s hard to see how suppressing price discovery leads to more efficient markets over the long run. Central bank intervention merely allows investment returns to be privatized while investment risk is socialized...”
Spot on! Thanks for sharing
They banks/i-banks have always done a great job of pulling the wool over the eyes of regulators, and it's impossible to find meaningful information about derivative/Contingent Liability exposures. Hopefully your hunch is right
I see leverage is now lower and this is good on the face of it. But how about if Contingent Liabilities are added in, and not with a net counterparty levels. Still plenty of risk in the banking system, just not in the same place. The problems are always there, and the I-banks/Banks will always outwork and outthink the Regulators
What a writing TLBS!! Easy to understand and full of knowledge. I cannot say more than thank you for these!
So True....Central bank intervention merely allows investment returns to be privatized while investment risk is socialized - a deeply regressive tax in the form of dollar dilution and dwindling spending power that benefits the richest among us."
Proves to me two things...1st Lesson is the FED is flying blind! & 2nd Lesson is those pesky "Beliefs," old ways never die, Adapt/Learn & Change your models/perspective. Data Metrics alone is a joke now...MOAR Revisions, MOAR JawBoning, Incompetent Politicians who still want to pick there own Winners...seeing beyond the tribalism & belief! Its' a squirt in your brain! Such a Dopamine Hit!