McKinsey: Half the World’s Banks Too Weak to Survive Downturn • Hacker News Board

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

#141

Post by dmix » Wed, Oct 23, 2019, 4:45 AM UTC

QuesnayJr wrote: post #138

dmix wrote: post #77

Earlier quoted context omitted.

Once again completing the cycle of moral hazards in the name of reducing the "impact" of rescissions in the short-term. The only metric that apparently matters.

In the last recession, unemployment in the US reached 10%. How big does unemployment have to reach before you take the quotes away from "impact"? 15%? 20%? Unemployment in Spain reached as high as 26% because Spain was unable to reduce the impact.

The unemployment rate is the short term metric which is exactly what I’m taking about.

A long term perspective means preventing future recessions too, not just fixing the short term problems. Creating new moral hazards, negative incentives, behaviour and careers which would have been tarnished and discredited normally are allowed to continue, often with the same people and companies.

If we were serious about preventing recessions our policies should not only be measured in how they deal with the fallouts but also addressing the things that cause it in the first place, and balancing what’s lost by not letting the markets naturally correct themselves.

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

#142

Post by glangdale » Wed, Oct 23, 2019, 6:03 AM UTC

std_throwaway wrote: post #56

glangdale wrote: post #8

Earlier quoted context omitted.

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.

I did not say that gold backed currency is better for everybody. I'm just amazed at the time span over which the dilution is happening. And I don't think that anybody can deny that our money is slowly losing its purchasing power.

Mainstream economic opinion is not particularly concerned by the fact that our money is slowly losing its purchasing power.

There's a general consensus that a small amount of inflation is useful, although the reasons are pretty cynical (i.e. wage flexibility -> "it's easier to give someone a 0% raise under conditions of 2% inflation than it is to give someone of -2% pay cut under conditions of 0% inflation").

You might make the argument that making it psychologically easier for employers to hand out small 'in-real-terms' pay cuts is wrong in itself, of course, but that's another discussion.

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

#143

Post by QuesnayJr » Wed, Oct 23, 2019, 6:49 AM UTC

dmix wrote: post #141

QuesnayJr wrote: post #138

Earlier quoted context omitted.

In the last recession, unemployment in the US reached 10%. How big does unemployment have to reach before you take the quotes away from "impact"? 15%? 20%? Unemployment in Spain reached as high as 26% because Spain was unable to reduce the impact.

The unemployment rate is the short term metric which is exactly what I’m taking about. A long term perspective means preventing future recessions too, not just fixing the short term problems. Creating new moral hazards, negative incentives, behaviour and careers which would have been tarnished and discredited normally are allowed to continue, often with the same people and companies. If we were serious about preventi…

We've had recessions for the entire history of capitalism, under a large number of legal regimes. We had recessions back when banking was much more tightly regulated. We had recessions under laissez-faire. Recessions are endemic to the system. Our choices are either "combat unemployment" or get ready for socialism to finally win the war of ideas.

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

#144

Post by antaviana » Wed, Oct 23, 2019, 6:55 AM UTC

throwaways66722 wrote: post #104

Rainymood wrote: post #87

Earlier quoted context omitted.

I'm thinking of applying to McKinsey as a data scientist, could we have a chat sometime?

I would prefer to remain anonymous but I'm open to answering questions here

I think we all know by now that you are James Oscar McKinsey

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

#145

Post by EETruth » Wed, Oct 23, 2019, 7:06 AM UTC

chatmasta wrote: post #88

WillPostForFood wrote: post #84

Earlier quoted context omitted.

To suggest that the American foreign interventions have been positive for the economy is crazy. Neither left nor right believe that lunacy.

Sure. But ultimately, debt is meaningless unless collected. In a scenario of global economic collapse, anyone who wants to collect their debt (if it even means anything anymore) from the US would have to go through the US military first.

Too bad that a decent chunk of the US debt is owed internally... Maybe 1st Armored will go and collect what's rightfully theirs from 101 Airborne?

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

#146

Post by op00to » Wed, Oct 23, 2019, 10:35 AM UTC

tomrod wrote: post #136

throwaway66920 wrote: post #127

Earlier quoted context omitted.

Former employee Edit: I cannot reply to the below, but I will say, that’s a pretty contrived justification for your view. Communication is hard. Few things done at a corporate scale are easy to implement. People like to point at big consulting firms and say “I could have done that” or “they could have just asked me” but that’s really just a fraction of it.

Former employee of former McKinsey employees. Grandparent point stands: McKinsey seems to offer little to no value that isn't already known and easy to communicate. I will say though that McKinsey alums I know seem to be better at playing corporate politics than the average, which can be a skill when married with technical acumen.

You call it playing politics, others call it effective communication.

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

#147

Post by tomrod » Wed, Oct 23, 2019, 11:10 AM UTC

op00to wrote: post #146

tomrod wrote: post #136

Earlier quoted context omitted.

Former employee of former McKinsey employees. Grandparent point stands: McKinsey seems to offer little to no value that isn't already known and easy to communicate. I will say though that McKinsey alums I know seem to be better at playing corporate politics than the average, which can be a skill when married with technical acumen.

You call it playing politics, others call it effective communication.

Effective communication is pushing people the alums dislike out of their jobs and building silos?

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

#148

Post by icebraining » Wed, Oct 23, 2019, 11:46 AM UTC

ur-whale wrote: post #91

baron_harkonnen wrote: post #86

Earlier quoted context omitted.

My experience has been that the vast majority of McKinsey and BCG consultants have absolutely no real world experience. My company has been hiring these people for internal roles in droves and it's hilarious (and depressing) to watch how useless they are when they can't just leave after dropping some nice sounding but useless solution on someones desk.

>My experience has been that the vast majority of McKinsey and BCG consultants have absolutely no real world experience And one of these drones currently runs Google :(

Pichai worked at Google for a decade before becoming CEO, he's hardly a consultant with "absolutely no real world experience".

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

#149

Post by omginternets » Wed, Oct 23, 2019, 12:08 PM UTC

Merrill wrote: post #111

omginternets wrote: post #102

Earlier quoted context omitted.

>Also blame borrowers defaulting. Forgive my ignorance, but wasn't the subprime crisis so scandalous precisely because bankers were recklessly pushing mortgages on people who couldn't pay?

NINJA mortgages. No Income, No Job, or Assets. There is actually a good business in providing mortgages to people who have income, jobs or assets, but who can't/won't provide documentation because of their legal status or the nature of their job/assets. They are actually good credit risks because they don't want any of the attention caused by debt collection and/or bankruptcy proceedings. But some mortgage brokers to…

So short answer, yes? Or am I missing some nuance in your explanation.

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

#150

Post by turk73 » Wed, Oct 23, 2019, 12:31 PM UTC

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.

If we lost half our universities we would be just fine, probably better. Something positive could rise from the ashes of what has become an ossified and out of touch gaggle of echo chambers and far left political ideology. Universities have been less about their core mission and far too much about political indocrination and meaningless sports contests.