Mortgage regulations are thankfully better than they were pre2008. Currently there isn't a systemic risk unless we get housing to fall something like 60% and we see large unemployment.

Might happen but the non-tech unemployment is still pretty strong even after the interest rate hikes

do you have any sources on post-2008 regulation? everything ive read shows there's been basically no changes to the system in terms of risk assessment. and sub prime mortgages are still a huge line of dominos.

mortgage packaged bonds still exist, sub prime mortgages still exist, variable rate mortgages still exist, banks still issue loans based on you spending every last dollar you make on a mortgage, and in the mean time the housing prices are incredibly inflated.

what exactly did we regulate if not the root causes of the 2008 crash?

This post was edited by thesnipa on Mar 24 2023 12:00pm

Did you?

I’m hoping you read some Bank of International Settlements extra boring documents. Watching “The Big Short” with Margot Robbie in a bath tub doesn’t make you an expert in CLOs.

TLDR: Biggest change is Basel III accords which were implemented across the world. There are minor differences but overall, Basel III increased how much capital banks need to hold on their balance sheet against their assets. Mortgage backed securities and subprime mortgages were never a problem per se, it was a combination of deteriorating lending standards, companies that did not capitalize correctly against potential losses in their portfolio and synthethics that took people (that didn’t know what they were doing) by surprise.

got bitcoin. no fear

Things like income verification have to be done by 3rd parties and there's now. Federal minimums that have to be met and down payment requirements.

I don't have a source but that's more or less what my broker told me two years ago when I bought my house.

They are definitely can still be a problem in that banks are willing to take on risky loans but the situation is not nearly as bad as it was where they didn't even have to verify income.

Don't think mortgage lending today is a huge issue IMO standards are much stronger compared to pre-2008. Ask anyone that bought a home in the last few years. It would become an issue if all of the sudden we have a huge crash in prices and people start to walk away, which is highly unlikely as there's structural real estate shortages nor is anyone eager to walk away from a 3% mortgage to get a 7% mortgage.

If you read the average regional bank 10k/q any stress on the asset quality side would probably come from CRE, particularly office. Consumer loans, i.e. credit card, auto, etc is another area that could see stress if we have a long recession.

We had our global head of underwriting for fixed income come the other day to speak to us and it was interesting some of the stuff he said. SVB had extremely concentrated deposits, like some clients there had 2-3bn in deposits , which is a huge risk because if you have a few of these whales walking away you're in trouble. Besides that general banking industry failed to understand the velocity of deposit flight that mobile banking enabled that as no model or past crises has ever seen. To give you an idea, some of our internal stress models basically have 5% deposit flight in a stress scenario when it should be much much higher in time of stress. But their (SVB) management honestly went full retard in 2022. They knew rate hikes were coming, they knew they were holding a fuck ton of rate-sensitive instruments and instead of selling off some of that exposure or at the very least hedging heavily they did very little.

This post was edited by ofthevoid on Mar 24 2023 04:59pm

Withdraw all your money, now before it's too late. Clear, simple, easy.

And do what? Stay poor? Double digit inflation will eat your cash under your mattress in a matter of a few years. Just look at Zimbabwe or Venezuela.

You HAVE TO invest your free cash into something and buy some risks - otherwise you just can’t catch up and ensure you have food to eat in our modern capitalist society.

Don't worry, I just decribed the best extension of what is real bank crisis. Was very funny, right ?

Don't all laws work that way?