I’m a quarter way convinced mid-sized banks’ stock shouldn’t be publicly traded.
Why is that?
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
#12I’m a quarter way convinced mid-sized banks’ stock shouldn’t be publicly traded.
Nor big too?
Re: Reasons the banking crisis isn’t a repeat of 2008
#13Serious 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.
A software engineer usually doesn't have a financial incentive to lie to you.
Re: Reasons the banking crisis isn’t a repeat of 2008
#14Serious 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.
Until you find the devs take on why the SQL query is slow is a hallucination in the LLM sense.
Re: Reasons the banking crisis isn’t a repeat of 2008
#15I’m a quarter way convinced mid-sized banks’ stock shouldn’t be publicly traded.
Or money creation should be more exclusive to public institutions.
Re: Reasons the banking crisis isn’t a repeat of 2008
#16I’m a quarter way convinced mid-sized banks’ stock shouldn’t be publicly traded.
Why is that?
Our equity markets have always been weird, but they’ve gotten weirder in recent years. For most businesses, that volatility is fine. Customers of e.g. Nike aren’t checking its stock price before buying sneakers, and it mostly has enough cash on hand to conduct business if creditors get spooked.
Banks are different. A random drop in their stock price will lead to a perceptions failure that trigger run conditions. This is how Signature and Credit Suisse were, at least proximately, done in. We’re practically seeing it play out again with Deutsche Bank.
Public ownership lets these banks access cheaper capital. But the operational effects of volatility make it seem a bad deal. For the largest banks, if closely supervised, I can see the risks balancing. But for mid-sized banks I don’t.
Re: Reasons the banking crisis isn’t a repeat of 2008
#17Earlier 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…
And zero acknowledgment that Credit Default Swaps were pioneered by Blythe Masters AT JP Morgan and used relentlessly to move risk off of balance sheets in a house of cards that led to millions losing their homes and life savings.
"In bypassing barriers between different classes, maturities, rating categories, debt seniority levels and so on, credit derivatives are creating enormous opportunities to exploit and profit from associated discontinuities in the pricing of credit risk."
https://www.theguardian.com/business/2008/sep/20/wallstreet....
And of course now she's in crypto.
https://www.thisismoney.co.uk/money/markets/article-9263487/...
Re: Reasons the banking crisis isn’t a repeat of 2008
#18Earlier quoted context omitted.
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.
A software engineer usually doesn't have a financial incentive to lie to you.
Hey, some of us are passionate about paying rent and bills
Re: Reasons the banking crisis isn’t a repeat of 2008
#19Re: Reasons the banking crisis isn’t a repeat of 2008
#20Banking will only change when we keep the management fully responsible. The bank goes bankrupt, the management goes bankrupt, see how they will gamble with your money then.