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McKinsey: Half the World’s Banks Too Weak to Survive Downturn

bloomberg.com

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Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn

#41

Post by rb808 »

chatmasta wrote: post #32
jsjohnst wrote: post #20

Earlier quoted context omitted.

No wonder you are hiding behind a throwaway, as you clearly don’t know what you’re talking about and are just posting mindless drivel. If you want to know the outcome of “we can always make more money” attitudes, look no further than Zimbabwe. In ~2007 they had a 50 cent paper note. ~6 months later a common paper note was $10,000,000,000. Just a short while after that, paper notes were being printed in one hundred tr…

Zimbabwe doesn’t have the US military backing its debt.

So if the economy gets bad its the job of the US military to invade something to get their resources?

Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn

#42

Post by helpPeople »

toomuchtodo wrote: post #39
helpPeople wrote: post #35

Earlier quoted context omitted.

I don't agree on the private doctor practice. Source, married a dr Worst, worst case, the ~15k/yr in rent, ins, and software put a dent in profits, but if each visit is min 75$, you can figure out how hard it is to break even. Upper revenue is 200k+/yr

Reimbursement compression along with EHR/EMR requirements has seen a lot of practices acquired by large health systems.

Not to get too bogged down with details, but this winter she is looking to change EMR systems. The current one is the most expensive/established EMR for her field.

Rent is 12,000 dollars of expenses. EMR is almost trivial.

Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn

#43

Post by helpPeople »

I look at 8 year automotive loans, and I wonder- who is about to get screwed.

People with jobs at gas stations buying new $30k vehicles.

Either inflation is about to get bad, and our parents/Grandparents lose big or deflation happens and young people are screwed.

Are there any other options?

Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn

#44

Post by dawg- »

And if you're a bank, guess who is conveniently standing by ready to fix it for you with an army of $2000 an hour consultants? McKinsey.

Same exact scam as the shady mechanic who wants charge you $400 to flush your transmission fluid and convinces you that your car will surely blow up if you don't do it.

Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn

#45

Post by seganddr »

helpPeople wrote: post #43

I look at 8 year automotive loans, and I wonder- who is about to get screwed. People with jobs at gas stations buying new $30k vehicles. Either inflation is about to get bad, and our parents/Grandparents lose big or deflation happens and young people are screwed. Are there any other options?

People stop with all the fear mongering and there's another decade of slow and steady growth.

Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn

#46

Post by mywittyname »

omginternets wrote: post #7
richliss wrote: post #2

AKA 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?

> Other than printing money and risking a cataclysmic devaluation

The US government would need to print an insane amount of money to have a tangible devaluation impact. Even more so when the money creation is intended to offset deflationary pressures due to a economic contraction.

Considering the GDP of the US is ~$20 trillion, I bet we're probably talking about $2-4 trillion of printed money, in addition to deflation offsets, over the course of a year before the noticeable market inflation occurs. That would be like spending the entire annual budget of the US military five times over.

Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn

#47

Post by gherkinnn »

golergka wrote: post #40
geodel wrote: post #31

Not that I disagree. Its same pattern: half of the universities, most of liberal art colleges, 60% of IT companies, 70% of private Doctor practices and so on are too weak to survive next shock. The only sad part I see is nasty businesses like McKinsey is not fitting in any pattern of failure.

Why are you calling McKinsey "nasty"?

True. You might as well call a sphere “round”. Redundant tautologies.

Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn

#48

Post by twh270 »

Much, possibly most, of the economic value in a downturn comes from weeding out the weaker companies -- through bankruptcy, acquisition, or restructuring/pivoting.

I well remember the "dot com" crash. It wiped out tons of companies that had no business existing (pardon the pun).

(Of course when it comes to banking, that can be a bit of a special case as we've witnessed multiple times.)

And yes, downturns are hard on people, and this is why a social safety net is invaluable. Gives them time to find a new job, or retool their skills, or otherwise adjust. And I don't pretend that's easy either.

Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn

#49

Post by sailfast »

throwaway66920 wrote: post #25

I believe this is the actual article https://www.mckinsey.com/industries/financial-services/our-i... Broadly it seems to be less extreme than Bloomberg’s summary and more nuanced to particular conditions. I like how exhibit 6 is rotated to encourage reading it from either direction. Haven’t seen that before in charts.

Thank you for posting the original source.

Re: McKinsey: Half the World’s Banks Too Weak to Survive Downturn

#50

Post by rchaud »

dawg- wrote: post #44

And if you're a bank, guess who is conveniently standing by ready to fix it for you with an army of $2000 an hour consultants? McKinsey. Same exact scam as the shady mechanic who wants charge you $400 to flush your transmission fluid and convinces you that your car will surely blow up if you don't do it.

The difference is that in most cases, the shady mechanic is not somebody you already know from college, or from golf or your national frat society.

McKinsey gets paid ungodly sums in part because they are the archetype of the old boy's club. Their new hires usually come only from top business schools, and likely already have several years under their belt at the types of companies McKinsey gets business from. In addition to that, most banks already have several ex-McKinsey people on staff anyway.

Boston Consulting Group are in the same tier. Back in college, BCG and McKinsey were the holy grail of employers for pretty much all Econ/Finance students who didn't want to go the IB route.

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