Reasons the banking crisis isn’t a repeat of 2008
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Re: Reasons the banking crisis isn’t a repeat of 2008
#2Serious question: Is it a good idea (ever) to trust a bank's take on a financial crisis?
Re: Reasons the banking crisis isn’t a repeat of 2008
#3Serious question: Is it a good idea (ever) to trust a bank's take on a financial crisis?
Once you acknowledge their bias, they do know an awful lot about banking.
Re: Reasons the banking crisis isn’t a repeat of 2008
#4I’m a quarter way convinced mid-sized banks’ stock shouldn’t be publicly traded.
Re: Reasons the banking crisis isn’t a repeat of 2008
#5Serious question: Is it a good idea (ever) to trust a bank's take on a financial crisis?
Honestly this article seems pretty reasonable for the most part. Source matters, but content matters the most imo.
Re: Reasons the banking crisis isn’t a repeat of 2008
#6Re: Reasons the banking crisis isn’t a repeat of 2008
#7Serious question: Is it a good idea (ever) to trust a bank's take on a financial crisis?
Once you acknowledge their bias, they do know an awful lot about banking.
Well, their selective take is like a description of a mass shooting that only describes where the bodies ended up, but no discussion of who caused it, or even that bullets might have been involved, let alone which people actually did it:
"Households had too much leverage in 2008 : Mortgage debt % potential GDP..." "The Global Financial Crisis was driven by price declines in low-quality assets with poor disclosure leading to a solvency crisis."
Drink one finger very time you find a bank mentioning the Glass-Steagall Act, and ten bottles every time you find them admitting they lobbied Congress hard to repeal it. [0]
"Why didn’t any Wall Street CEOs (or executives) go to jail after the financial crisis?" (also a list of criminal and civil charges, and which banks got fined) [1]
...and here's some shameless revisionism by Cato [2] ("It wasn't the banks [being allowed to issue the CDOs], it was the securities salesmen who spontaneously invented and sold CDOs"). I must remember that compelling excuse if I ever get busted running a casino in my own living-room.
> "In any case, the 2008 financial crisis had precious little to do with Glass‐Steagall, one way or the other. It was caused primarily by bad lending policies, which in turn led to the growth of the subprime market to an extent that neither the lawmakers nor regulatory authorities recognized at the time. The commercial banks and parent holding companies that failed — or had to be sold to other viable financial institutions — did so because underwriting standards were abandoned."
[0]: https://blogs.law.ox.ac.uk/business-law-blog/blog/2018/11/de...
[1]: https://features.marketplace.org/why-no-ceo-went-jail-after-...
[2]: https://www.cato.org/policy-analysis/repeal-glass-steagall-a...
Re: Reasons the banking crisis isn’t a repeat of 2008
#8Serious question: Is it a good idea (ever) to trust a bank's take on a financial crisis?
In the same way that you should take a software engineer's take on why a a SQL query is slow. They're probably the most knowledgeable person in the room but that doesn't always mean that they're right.
Re: Reasons the banking crisis isn’t a repeat of 2008
#9Earlier quoted context omitted.
Once you acknowledge their bias, they do know an awful lot about banking.
Well, their selective take is like a description of a mass shooting that only describes where the bodies ended up, but no discussion of who caused it, or even that bullets might have been involved, let alone which people actually did it: "Households had too much leverage in 2008 : Mortgage debt % potential GDP..." "The Global Financial Crisis was driven by price declines in low-quality assets with poor disclosure lea…
Glass-Steagall’s repeal wasn’t proximate to any post-repeal banking crises. (Glass-Steagall wouldn’t have prevented mortgage CDOs.) It certainly wouldn’t have done anything for SVB or Signature.
Re: Reasons the banking crisis isn’t a repeat of 2008
#10To summarize:
"Policymakers have tools to solve banking crises [...]"
"The economy is in a much different place"
"The magnitude of the problem is, so far, much smaller"
In conclusion, "we still don't see it coming" avoiding the term, "subprime" or acknowledging that predatory lending ever occurred, and this weird typo:
"[...] the primary facility *though* which banks can borrow [...]"