McKinsey: Half the World’s Banks Too Weak to Survive Downturn
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Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn
#2AKA On behalf of our banking customers we're going to be advising that governments get ready to do another bailout.
Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn
#3We can always make more money if we really want to. The economy might run out of oil, sand, gold, land, and willpower but it will never run out of money until the central banks stop the money supply or politicians cause a hard fault.
Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn
#4AKA On behalf of our banking customers we're going to be advising that governments get ready to do another bailout.
It amazes me how long and how slowly the value of our money can be eroded without casing a hard crash. This has been going on for over 100 years in the US. Money used to pay things used to be gold, then fully gold backed, then partially gold backed, then no gold but security backed, then securities are diluted more and more. The next logical steps would be that the central banks buy up the bankrupt economy and introduce social credit as currency which is backed by surveillance.
Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn
#5AKA On behalf of our banking customers we're going to be advising that governments get ready to do another bailout.
That's a cynical, conspiratorial, and woefully uninformed take on this.
On the most basic level, what you're suggesting doesn't make sense: "getting ready for a bailout" doesn't imply any real action any government would take.
If anything, being warned about financial instability will lead to an increase in requirements for banks: capital requirements might increase, M&A might become harder, etc.
But those are the sort of changes banks would tend to hate, because they necessarily reduce their opportunities to make money.
So I believe you're reacting to seeing "McKinsey", and it triggers you into running your conspiracy-themed sentence-generation Markov chain. In the process, it reveals that "government" and "finance" figure large as sinister agents in your belief system.
Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn
#6AKA On behalf of our banking customers we're going to be advising that governments get ready to do another bailout.
It amazes me how long and how slowly the value of our money can be eroded without casing a hard crash. This has been going on for over 100 years in the US. Money used to pay things used to be gold, then fully gold backed, then partially gold backed, then no gold but security backed, then securities are diluted more and more. The next logical steps would be that the central banks buy up the bankrupt economy and introd…
Your "next logical step" isn't logical in any sense of the word. You're just recounting a few steps of history (that actually went along with increased stability of the financial system) and then suddenly suggesting it's a preamble to some scenario that's currently en vogue among the paranoid.
"backed by surveillance" simply does not mean anything. At least not in the sense of "backed by" as used in those other cases.
Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn
#7AKA On behalf of our banking customers we're going to be advising that governments get ready to do another bailout.
>do another bailout.
I know you're being tongue-in-cheek, but in theory, are governments even capable of doing another bailout?
My understanding is that public debt in most Western countries (not sure about China/India) is through the roof. Other than printing money and risking a cataclysmic devaluation, what can be done?
Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn
#8AKA On behalf of our banking customers we're going to be advising that governments get ready to do another bailout.
It amazes me how long and how slowly the value of our money can be eroded without casing a hard crash. This has been going on for over 100 years in the US. Money used to pay things used to be gold, then fully gold backed, then partially gold backed, then no gold but security backed, then securities are diluted more and more. The next logical steps would be that the central banks buy up the bankrupt economy and introd…
Right, because everything was so much better when you could, for no particularly good reason, relate money to a marginally useful-to-jewellers-and-dentists soft metal. I suppose I shouldn't expect economic literacy on Hacker News, but the twist on the standard goldbug narrative ("social credit backed by surveillance") is at least original, if nutty.
Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn
#9Earlier quoted context omitted.
It amazes me how long and how slowly the value of our money can be eroded without casing a hard crash. This has been going on for over 100 years in the US. Money used to pay things used to be gold, then fully gold backed, then partially gold backed, then no gold but security backed, then securities are diluted more and more. The next logical steps would be that the central banks buy up the bankrupt economy and introd…
Right, because everything was so much better when you could, for no particularly good reason, relate money to a marginally useful-to-jewellers-and-dentists soft metal. I suppose I shouldn't expect economic literacy on Hacker News, but the twist on the standard goldbug narrative ("social credit backed by surveillance") is at least original, if nutty.
Gold's uselessness / rarity is what makes it perfect as money.
The dollars you hold in your wallet are not even useful as toilet paper. Its sole use is to store value - just like gold.
Gold standard created the first motor, railway, steamships. More importantly, wages kept up with productivity, in fact as soon as you decoupled gold from money, wages stagnated.
Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn
#10AKA On behalf of our banking customers we're going to be advising that governments get ready to do another bailout.
>do another bailout. I know you're being tongue-in-cheek, but in theory, are governments even capable of doing another bailout? My understanding is that public debt in most Western countries (not sure about China/India) is through the roof. Other than printing money and risking a cataclysmic devaluation, what can be done?
The problem was never with banks failing, it was with some of them being "too big to fail". This news therefore doesn't mean attempts to prevent another 2008-like crisis have been unsuccessful.
Also, let's the remember the last bailout was a somewhat underrated success: " TARP recovered funds totalling $441.7 billion from $426.4 billion invested, earning a $15.3 billion profit or an annualized rate of return of 0.6% and perhaps a loss when adjusted for inflation.".
Apart from that, public debt is up considerably in the US (mostly due to tax cuts) but rather flat in the EU. Nothing would preclude another bailout of the same magnitude as the last one.
But that's a somewhat silly question. Because if there's one thing we can be sure of, it's that the next crisis will be different than the last one.
Italy going bankrupt is a far more imminent danger than private banks, and one that would be too big to contain, for example.