When does government intervention here violate the 13thA on peonage grounds? Each government intervention has moved goal posts for hard working Americans and now the goal post moving is more frequent. Like dangling a carrot in front the horse.

This post was edited by RedFromWinter on Mar 20 2023 06:56am

I guess it's all leftist regulations fault.

The system we've created is unsustainable and not fair I agree. What we're seeing now is ultimately a result of government interventions (years of QE not allowing rates to find a true equilibrium so you don't have excess risk taking and once covid hit QE squared). No one is accountable, while inflation from expanding the money supply and debt exponentially, destroys the middle-lower classes.

Average person today has to spend way more on food, housing, car & other necessities. I seen average sale price of a new car was close to 50k in the US now, when it was like half of that 3-4 years ago. I see videos regularly on social media of millennials saying they will never be able to own a house. If you are holding cash (which most poor people do because they really aren't sophisticated enough to understand how to buy stocks/bonds/etc) they are losing anywhere from 6-8% in purchasing power erosion.

The saddest and most frustrating part to me is how we have large swaths of people thinking that short-term over spending (usually by creating more debt) is good. Arguments for fiscal responsibility are shouted down and various low-iq talking points are used as bludgeons. 'You hate the poor', 'You are killing old people' (COVID era argument for not wanting to close the economy, 'you are selfish' etc.

This post was edited by ofthevoid on Mar 20 2023 10:19am

https://news.bloomberglaw.com/capital-markets/hedge-funds-marathon-redwood-scoop-up-credit-suisse-claims

Seems there will be a juicy court battle for AT1 investors who got wiped in Credit Suisse acquisition. It was technically legal to wipe them out as permanent write down was allowed under those convertible bonds term sheets, yet people are betting they can get a settlement out of Swiss government (UBS?).

Interesting.

Yeah I seen that. I think people were up in arms because stock holders are almost always junior to bond holders, even junior tranches but it seems there was some mechanics within the AT1 bond language that left them with nothing.

I read few days back that UBS is expecting a ton of lawsuits from investors and basically made it clear to the Swiss government that those lawsuits costs have to be baked in as part of this takeover.

Swiss government provided so many sweeteners to UBS as part of this deal that stock is actually doing really well versus what I thought might happen.

This post was edited by ofthevoid on Mar 23 2023 09:01am

UBS and Credit Suisse convertibles are the only ones that have permanent writedown as a provision. It was never hidden from investors and was always there. I understand that everybody expected them to be junior to equity, but that is going to be hard to prove. See page 2 - Write Down:
https://www.credit-suisse.com/media/assets/corporate/docs/about-us/investor-relations/regulatory-disclosures/t1-ush3698dbz62.pdf

I quite like how Matt Levine described the situation in his recent newsletter:



This post was edited by Malopox on Mar 23 2023 09:10am

Listened to a video explaining the hierarchy. The bonds that were wiped were specifically bonds that had a contingency that once the bank's assets fall below a certain percentage of their obligations they would be forfeit. Lots of investors ignored it, but turns out there's no shenanigans with letting the bond holders go.



This post was edited by NetflixAdaptationWidow on Mar 23 2023 05:52pm

I think our system might be depression proof now. The 08' collapse caused a lot of changes with the way things operate in order to stop these things before they happen.

Inflation on the other hand? Gunna shoot up and up for the foreseeable future. Let's just hope to the spaghetti monster in the sky that another global catastrophe doesn't happen. 2020 was unpredictable, but hopefully it can be avoided in the future.

The instability of the financial systems (though it's probably not as bad in my country) makes me want to own as little money as possible. I have put down the money for a presale condo, because I want to turn the fiat money that I own into something that actually has value. The only reason I still own money is because I have an account where only cash can be kept. If I had any spare money, I would buy gold. I have no faith in either banks nor the central bank/s.

When everything melts down, you'll be left with a condo and a tenant that the courts / tribunals refuse to evict.