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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

#91

Post by arcticbull »

alxmng wrote: post #87

Who cares about keeping deposits safe when money isn’t worth anything? Americans don’t even have money in the bank. Median savings is $4500. Many people who perform socially useful jobs can barely afford the basic basket of goods like rent, food, and transportation.

My money still seems to work great. Those are some serious fiscal and social (but not monetary) issues that should be taken up with Congress not the Fed, and not the FDIC. Who handled this all very well I might add.

> Median savings is $4500.

The average American family has a $748,000 net worth, according to Federal Reserve data, median $121,000. Savings isn't just what's in your 'savings' account. Mine definitely isn't.

Money is a medium of exchange and unit of account. It's not a tool for building wealth, and it's not a long-term store of value. It never was. They shouldn't have money in the bank, they should have it productively invested.

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

#92

Post by mym1990 »

alxmng wrote: post #87

Who cares about keeping deposits safe when money isn’t worth anything? Americans don’t even have money in the bank. Median savings is $4500. Many people who perform socially useful jobs can barely afford the basic basket of goods like rent, food, and transportation.

Ah but we have a solution to that: its called going into a crippling amount of debt which one will never be able to pay off, which will guarantee a revolving door leading right into the bank's pocket book!

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

#93

Post by strken »

oblio wrote: post #74
chiefalchemist wrote: post #71

Earlier quoted context omitted.

> The fucking owners of capital seem bound and determined to destroy their own system. Nah. These disruptions are a means to an ends. That is, shifting still more wealth to the top. Follow that graph. Everything else is a means to that ends or a distraction.

I hate all these conspiracy theories. And you know why? It's because they imply hubris, arrogance, control. Let's just realize that we all have a lot less control over our environment than we think we do, and some things are just forces beyond anyone's control.

I hate the implication of coordination.

I think it's more likely that every person at every link in the chain is following some incentive: financial experts within banks are saying whatever they think will get governments to stop putting up interest rates (we're in a banking crisis), journalists are repeating interesting and dramatic news from their sources (that we're in a banking crisis), their editors are careful not to block an important message (that we're in a banking crisis), and so on.

The net effect is possibly going to be moving wealth to the top, but if you take a conspiratorial view, the solution seems like it's "find the shadowy council working behind the scenes and force them to stop". If it's just distributed rational decision-making you have to take a systems-level view of what the incentives are and work to change the overall behaviour of everyone, which is a much more complicated problem.

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

#94

Post by cultureswitch »

dalbasal wrote: post #57

It feels like all the content here is subtext... so I guess I get to do Philology. These are the given reasons: | this probably isn’t 2008, for three key reasons: (1)Policymakers have tools to solve banking crises, (1.5) and the bigger banks are much stronger (2) The economy is in a much different place (3) The magnitude of the problem is, so far, much smaller | His take on reason #1 is that MMT has won. Monetarism i…

Money started out fictional, we're just taking our sweet time mentally recovering from around a millennia of thinking metal and money are the same thing.

Turns out, the real nature of money is debt. And debt is just a relation between people, so there's no natural limit to it, other than confidence.

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

#95

Post by pdonis »

alxmng wrote: post #87

Who cares about keeping deposits safe when money isn’t worth anything? Americans don’t even have money in the bank. Median savings is $4500. Many people who perform socially useful jobs can barely afford the basic basket of goods like rent, food, and transportation.

> Americans don’t even have money in the bank. Median savings is $4500.

But M1 is about three times M0; the difference, about $12T, comes to about $400K per American, so some Americans do have significant money in the bank.

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

#96

Post by nicoburns »

strken wrote: post #93
oblio wrote: post #74

Earlier quoted context omitted.

I hate all these conspiracy theories. And you know why? It's because they imply hubris, arrogance, control. Let's just realize that we all have a lot less control over our environment than we think we do, and some things are just forces beyond anyone's control.

I hate the implication of coordination. I think it's more likely that every person at every link in the chain is following some incentive: financial experts within banks are saying whatever they think will get governments to stop putting up interest rates (we're in a banking crisis), journalists are repeating interesting and dramatic news from their sources (that we're in a banking crisis), their editors are careful…

I mean the right-wing political parties are pretty open about their desire to keep the status quo economic system which causes wealth the move to the top (and in many cases increase the extent to which it does by doing things like privatising public industries, deregulating industries, etc). And they're obviously a coordinated entity by nature of being a political party.

No conspiracy theories required.

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

#97

Post by kneebonian »

Dalewyn wrote: post #80
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…

>bailing out the banks My understanding this time around is the depositors rightfully got bailed out (both to maintain peoples' trust in banking, and because losing your money to others' failures fucking sucks), but the banks themselves were left out to dry.

Sure the depositors that had more than 3x my annual salary just sitting in their account.

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

#98

Post by Avshalom »

strken wrote: post #93
oblio wrote: post #74

Earlier quoted context omitted.

I hate all these conspiracy theories. And you know why? It's because they imply hubris, arrogance, control. Let's just realize that we all have a lot less control over our environment than we think we do, and some things are just forces beyond anyone's control.

I hate the implication of coordination. I think it's more likely that every person at every link in the chain is following some incentive: financial experts within banks are saying whatever they think will get governments to stop putting up interest rates (we're in a banking crisis), journalists are repeating interesting and dramatic news from their sources (that we're in a banking crisis), their editors are careful…

The rhetorical problem is that it's a sort of inverse of Yossarian's "they're trying to kill me", coordination is often not usefully distinct from a system which incentivizes the same actions that would be achieved through coordination. Some things are very hard to describe without sounding like a conspiracy no matter how little communication happens between actors, precisely because those incentives are a form of communication.

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

#99

Post by mym1990 »

oblio wrote: post #74
chiefalchemist wrote: post #71

Earlier quoted context omitted.

> The fucking owners of capital seem bound and determined to destroy their own system. Nah. These disruptions are a means to an ends. That is, shifting still more wealth to the top. Follow that graph. Everything else is a means to that ends or a distraction.

I hate all these conspiracy theories. And you know why? It's because they imply hubris, arrogance, control. Let's just realize that we all have a lot less control over our environment than we think we do, and some things are just forces beyond anyone's control.

This might be true for most people, but those with billions have the means to control policy, technological advancement, incentives, and how that technology gets used. Small picture, sure, random walk, but zoom out and there is definitely a path most people are following without knowing.

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

#100

Post by jzymbaluk »

kneebonian wrote: post #97
Dalewyn wrote: post #80

Earlier quoted context omitted.

>bailing out the banks My understanding this time around is the depositors rightfully got bailed out (both to maintain peoples' trust in banking, and because losing your money to others' failures fucking sucks), but the banks themselves were left out to dry.

Sure the depositors that had more than 3x my annual salary just sitting in their account.

Of all the "evil" things one could do with gargantuan wads of cash, having it sit in a bank account is just about the most innocuous thing I can think of to do with it. It seems like a wise, cautious move actually, and it seems like it'd be bad to punish businesses for being cautious with their money
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