Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Reasons the banking crisis isn’t a repeat of 2008

chase.com

Post reply on HN
Print view View original

211–220 of 441 posts

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

#211

Post by lottin »

fyzix wrote: post #128
dragonwriter wrote: post #111

Earlier quoted context omitted.

> Schiff didn’t account for the economic ignorance of the masses in his prediction. Literally every economic misprediction can be blamed on not accounting for the way people actually behave in real-world economies, but…that’s not something that adds credibility for the next prediction by the same predictor.

1.decade of 0% apr >>> 2.high inflation >>> 3.gold price surge We have gotten 1 and 2 but we haven't gotten to 3 because traders believe that the FED can win the inflation fight. The FED abandoned the inflation fight with a soft pivot yet traders are still not buying gold. This is what Peter couldn't foresee...traders' unwillingness to go against the FED. This is not a misprediction because in any sane world, the pro…

So he basically predicted "high inflation". He's been predicting that since at least 2010, probably earlier. Over a long enough period there is bound to be some episode of "high inflation", so sooner or later the prediction of "high inflation" will become true. This doesn't mean that the individual who made the prediction is some kind of visionary.

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

#212

Post by dragonwriter »

fyzix wrote: post #128
dragonwriter wrote: post #111

Earlier quoted context omitted.

> Schiff didn’t account for the economic ignorance of the masses in his prediction. Literally every economic misprediction can be blamed on not accounting for the way people actually behave in real-world economies, but…that’s not something that adds credibility for the next prediction by the same predictor.

1.decade of 0% apr >>> 2.high inflation >>> 3.gold price surge We have gotten 1 and 2 but we haven't gotten to 3 because traders believe that the FED can win the inflation fight. The FED abandoned the inflation fight with a soft pivot yet traders are still not buying gold. This is what Peter couldn't foresee...traders' unwillingness to go against the FED. This is not a misprediction because in any sane world, the pro…

> This is not a misprediction because in any sane world, the prospects of very high inflation would result in a spike of the gold price.

Since it was a prediction of the behavior in the real world, and it doesn’t reflect what actually occurred, it is a misprediction.

The fact that the predictor (or you) believes that a world in which the prediction was accurate would be more sane doesn’t make the wrong prediction better, since it wasn’t offered as a prediction of what would occur in some hypothetical sane world.

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

#214

Post by mushbino »

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…

Peter Shiff predicts a million things and about 2 per decade end of being correct, aside from the obvious ones.

0% interest can work just fine, but not in the trickle down model.

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

#216

Post by tfourb »

FredPret wrote: post #195
safety1st wrote: post #154

Earlier quoted context omitted.

Over the years as my perspective has become more global I've come to realize what a privileged position the US is in, economically: * Ports on both the Atlantic and Pacific * A very effective transportation system in between * In the big growth sector where points 1 and 2 don't matter, tech, it's still #1 in the world anyway * A market of 350 million high income people (by global standards) under one regulatory frame…

The other advantage is the total net worth as opposed to GDP. You hear a lot about GDP and the US has the biggest economy by far. But the total net worth per person in the States is even further ahead of the rest of the world. Only Switzerland is ahead of the US in per-capita net worth (only by a hair though) and one suspects that’s partly due to so many Americans parking their money there. Having had the biggest GDP…

Actually the U.S. in 3rd place behind Switzerland and Luxembourg in terms of mean wealth per adult and Hong Kong is not far behind. But you are right that the other countries on the upper ranks are mostly smaller nations with large banking sectors: https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe...

While I agree that the U.S. has an enormous built-in advantage over other countries, I would really highlight one other piece of data: In terms of median wealth, the U.S. is eclipsed by half the E.U. and many Asian countries including diverse economies like France. This points to a terrifying concentration of wealth, which has also been highlighted by researchers like Picketty and this could (or arguably already does) put the social fabric of the U.S. under enormous strain.

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

#217

Post by 64bittechie »

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…

[dead]

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

#218

Post by hgomersall »

roenxi wrote: post #126
bigdaddyrabbit2 wrote: post #116

Earlier quoted context omitted.

>banks to become even riskier with deposits as they get to keep the profits if their risky bets payoff and get bailed out if they fail This isn't true, is it? While they do get to keep profits, if the bets don't pay off, the bankers - shareholders, bondholders, employees, executives - all get wiped out (as happened with SI, Signature and SVB). The depositors get bailed out. They get to keep profits if they win, but l…

The bankers are closet creatives; they're probably going set up structures where the equity-holders are on paper running something that looks like a charity and there is a class of "depositors" who are making suspiciously high returns. They just need to figure out how to get the money into their sphere of control as a deposit rather than as equity. Indeed, in the SVB case there is probably an interesting story around…

So they should be told not to do that and be put in prison if they persist. We (the people) make the rules, but the regulators are rather too cosy with the bankers.

I'd start by stopping any securitization and having the banks keep all their loan assets on their own balance sheets.

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

#219

Post by tfourb »

locallost wrote: post #192
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…

"Predicted this in 2008" is a funny sentence. If I now predicted that what the Fed is doing will result in an amazing economy, would it really count if it happened in 15 years? Peter Schiff is always predicting doom. It's not that he's talking complete nonsense, but objectively he is more wrong than right. His opinions corelate less to being correct and more to the fact that he invests a lot in gold, and his interest…

If I recall correctly, the general consensus is that while there are people who do very well in predicting future events and developments (google "super forecasters"), nobody can do so reliably beyond a time horizon of five years or so.

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

#220

Post by Dylan16807 »

fyzix wrote: post #113
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.

By "banks", I mean 90% of the other banks in the country that would've failed, absent the SVB depositor bailout. If the FED didn't step in, every regional bank in the country would experience a bank run as people would withdraw everything and deposit in the "too big to fail" banks for safety. Why I think the depositors should've suffered a haircut: What the FED did, was implicitly guarantee the deposits, this incenti…

Convincing people not to bank run every single bank is not a bailout of all those banks, jeez.

And are you talking about people with more than 250k, or everyone else?

The former wouldn't destroy banks, and if you think insurance for everyone else is a problem then why has it taken 90 years to be such an issue?

Post reply on HN