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Mar 13 2023 02:32pm
Quote (ofthevoid @ 13 Mar 2023 20:55)
The valued at Par is the notable part here IMO. There were already various funding mechanism for most banks with FHLB advances where banks could repo/reverse repo their securities. The fact now that they can do this with their underwater bond portfolio at par value is pretty significant.

Our financial system is such a house of cards lol. They will probably stop rate hikes and fuck the consumer further with 4-7% inflation annualized for the next few years because the system literally starts to implode with slightly higher rates.

That's why so many of us when Covid hit talked about the economic damage this unprecedented money printing/low rates would have, but people and governments are short sighted, only to create even bigger issues with their solutions.


Well I mean the big issue with programs like that (eg FED discount window) is that using them has an attached stigma that only institutions with problems have to resort to them. You don’t wanna be that guy. That’s why TARP was mandated to everyone to hide real recipients.

USD 25Bn is not enough for a broad industry-wide backstop so I’ve no clue what those people are smoking over there.

This post was edited by Malopox on Mar 13 2023 02:32pm
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Mar 13 2023 02:51pm
Quote (ofthevoid @ Mar 13 2023 03:55pm)
The valued at Par is the notable part here IMO. There were already various funding mechanism for most banks with FHLB advances where banks could repo/reverse repo their securities. The fact now that they can do this with their underwater bond portfolio at par value is pretty significant.

Our financial system is such a house of cards lol. They will probably stop rate hikes and fuck the consumer further with 4-7% inflation annualized for the next few years because the system literally starts to implode with slightly higher rates.

That's why so many of us when Covid hit talked about the economic damage this unprecedented money printing/low rates would have, but people and governments are short sighted, only to create even bigger issues with their solutions.


The interest expense on the debt alone will capsize the US treasury over any sustained period of time. They need 10-20 years of ~4-5% inflation while they keep rates at artificially depressed levels. That will screw over savers and cripple consumer spending power, but we're at a point where the system can't survive any other way. The "responsible" course of action (index spending increases below inflation, higher taxes, entitlement reform) is a complete non-starter.
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Mar 13 2023 02:59pm
The extremely nerdy financial analysts among us will rejoice to read this piece from 2017 by Deutsche Bank titled “The Next Financial Crisis”

Quote
An obvious issue is how we resolve the combination of the unwinding of unparalleled central bank balance sheet sizes at a time of record peacetime government debt and multi-century record low yields


https://www.tramuntalegria.com/wp-content/uploads/2017/09/Long-Term-Asset-Return-Study-The-Next-Financial-Crisis-db.pdf

It holds up incredibly well.
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Mar 13 2023 07:19pm
A bank serves exclusively the richest most liberal clientele of the west coast, embracing diversity quotas and championing equity over competency. They fail while Biden is president and the watchdog agencies set up by Democrats did not keep them in check. They acted with irresponsibility that could have been detected by the regulatory regime that was rolled back by Donald Trump. Throughout it all was a common thread of the Federal Reserve led by a bipartisan cadre of neoliberals who vastly increased the money supply over the course of the last three presidencies, totally failed to anticipate inflation or to foresee the ramifications of their interest hikes to keep inflation in check.
A lot of people point fingers during and after a crisis like this, one party or another. What I see is the failure of ideology itself. Go too far one way, go too far another, and more damningly of all, think that you alone know the solution.

Its bad fiscal policy. You keep ballooning the money supply, you devalue your currency, you get inflation. You prop up the markets on artificial growth via quantitative easing and bottomless handouts, without any corresponding actual growth in product, and you create a bubble. You constrict that money supply and all the house of cards comes tumbling down, and you can't control the ensuing collapse. And there's a very good chance we're just brushing up against the tip of that iceberg right now. It might only wipe out banks at the periphery of high risk investments and poor management like these, who were so dumb they couldn't see the rate hikes in the future with their bonds- but where does the Fed go next? Rock and a hard place. Either all the monopoly money in your retirement account means nothing when a Big Mac costs $36 in the year 2040, or they keep rolling back the M2 and oops your account no longer exists.
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Mar 13 2023 08:07pm
those are the same people, who are telling you that other investments are scams ^_^

i guess the FED is okay with destroying some wealth to get inflation down, maybe the rate increases will stop for a bit now?

from what i could gather so far we are in a far bigger "bubble" than 2008, of course when in doubt the money printers will go BRRRRRRRRRRR again

i would not want to sit there right now, these guys are dancing next to the abyss
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Mar 13 2023 09:22pm
Nightly news saying second bank has failed. Signature Bank

Think this will spread like wildfire over a tinderbox. There is a whole segment of adults willing and ready to throw gas into the fire like with the Robinhood headlines. Think they will add another layer of pressure on top of the FOMO to compound the crisis.

This post was edited by RedFromWinter on Mar 13 2023 09:23pm
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Mar 14 2023 01:14am
Lol. Banks who went all in on crypto currency failed? Shocking. Lol
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Mar 14 2023 03:01am
Quote (said_aouita @ 14 Mar 2023 08:14)
Lol. Banks who went all in on crypto currency failed? Shocking. Lol


Banks don’t fail because they go on crypto currency.
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Mar 14 2023 05:12am
Quote (NetflixAdaptationWidow @ Mar 14 2023 06:29am)
Let it all burn. Build a better system from the ashes


It won't be better for you lol. Banks have been salvitating at the prospect of creating a cashless society through centralized digital currency for years.
The profits for them will be astronomical the data mining in conjunction with we chat and xapp will have everyone eating out of their hand.

Selling your freedom for convenience is short money. But simps gona simp.
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