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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

#31

Post by JumpCrisscross »

perfecthjrjth wrote: post #27
legulere wrote: post #15

Earlier quoted context omitted.

Or money creation should be more exclusive to public institutions.

Loans create more money; in other words, according to your proposal, private banks shouldn't lend out more money than what they have (as customers' deposits).

> private banks shouldn't lend out more money than what they have (as customers' deposits)

The proposal is to eliminate fractional-reserve banking, which usually requires public accounts at the central bank [1][2], though in practice, there is no reason each state couldn’t open an account at the Fed, to keep the Fed out of the business of retail banking.

[1] https://www.econstor.eu/bitstream/10419/197911/1/1043494065....

[2] https://www.reuters.com/article/us-swiss-vote-sovereign/swis...

Re: Reasons the banking crisis isn’t a repeat of 2008

#32

Post by peyton »

hifromLA wrote: post #5
pnemonic wrote: post #2

Serious 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.

One big issue is ignoring causality and hindsight. E.g. author contrasts “low quality” assets of 15 yrs ago with today’s “high quality” assets, ignoring the fact that asset quality was apparent only in hindsight.

Re: Reasons the banking crisis isn’t a repeat of 2008

#33

Post by notch898a »

fyzix wrote: post #23

History never repeats itself, but it does often rhyme. We cannot have a decade of 0% interest rates and expect no consequences. Peter Schiff predicted this from the moment the fed bailouted the banks in 2008. There's nothing the fed can do to escape this one, it's either massive inflation or massive recession. The fed has avoided the latter by bailing out the banks again so expect double digit inflation for the next…

>There's nothing the fed can do to escape this one, it's either massive inflation or massive recession.

The fed knows this. They should make it explicit to the common, ~100 IQ, joe six pack American. It's infuriating watching them act so carefully as to pretend to try and not spook anyone.

Re: Reasons the banking crisis isn’t a repeat of 2008

#34

Post by e_i_pi_2 »

fyzix wrote: post #23

History never repeats itself, but it does often rhyme. We cannot have a decade of 0% interest rates and expect no consequences. Peter Schiff predicted this from the moment the fed bailouted the banks in 2008. There's nothing the fed can do to escape this one, it's either massive inflation or massive recession. The fed has avoided the latter by bailing out the banks again so expect double digit inflation for the next…

I nice twist I heard recently - it's more like a song, and I'm getting really tired of going back to the same chorus over and over again

Re: Reasons the banking crisis isn’t a repeat of 2008

#36

Post by vkou »

fyzix wrote: post #23

History never repeats itself, but it does often rhyme. We cannot have a decade of 0% interest rates and expect no consequences. Peter Schiff predicted this from the moment the fed bailouted the banks in 2008. There's nothing the fed can do to escape this one, it's either massive inflation or massive recession. The fed has avoided the latter by bailing out the banks again so expect double digit inflation for the next…

> The fed has avoided the latter by bailing out the banks again so expect double digit inflation for the next decade.

How on Earth is providing short-term liquidity[1] until the long-term low-yield bonds owned by those banks mature translates into double-digit inflation?

And why should we listen to this [2] prediction of double-digit inflation?

[1] At least in the US. Switzerland is doing its own thing with the UBS/CS merger, good luck to those folks, that sounds like a fun garbage dump to dig through.

[2] Similar comments predicted 15 of the past ~1 years of double-digit inflation.

Re: Reasons the banking crisis isn’t a repeat of 2008

#37

Post by hanniabu »

perfecthjrjth wrote: post #27
legulere wrote: post #15

Earlier quoted context omitted.

Or money creation should be more exclusive to public institutions.

Loans create more money; in other words, according to your proposal, private banks shouldn't lend out more money than what they have (as customers' deposits).

How does a loan create money? A loan is just shifting funds from the lender to the borrower.

Re: Reasons the banking crisis isn’t a repeat of 2008

#38

Post by nostrademons »

kiernanmcgowan wrote: post #8
pnemonic wrote: post #2

Serious 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.

It's more like a manager's take on whether they need more headcount or an engineer's opinion on how long a project is going to take. They are the most informed person in the room - however, they also have an incentive to present a certain story.

Re: Reasons the banking crisis isn’t a repeat of 2008

#39

Post by corndoge »

mabbo wrote: post #21

Okay did anyone else get tricked by that websites dark pattern? We've all been trained to not even look at the "do you accept cookies" thing anymore and just blindly press it. On this website, it's actually an ad link to their paid services that looks just like one of those accept cookies buttons.

At least some of us do bother to click "set preferences" and set all the cookies to off.

If you are a habitual cookie clicker there is also this:

https://addons.mozilla.org/en-US/firefox/addon/istilldontcar...

Re: Reasons the banking crisis isn’t a repeat of 2008

#40

Post by brigandish »

fyzix wrote: post #23

History never repeats itself, but it does often rhyme. We cannot have a decade of 0% interest rates and expect no consequences. Peter Schiff predicted this from the moment the fed bailouted the banks in 2008. There's nothing the fed can do to escape this one, it's either massive inflation or massive recession. The fed has avoided the latter by bailing out the banks again so expect double digit inflation for the next…

Consumer Price Index...?
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