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

251–260 of 441 posts

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

#251

Post by Broken_Hippo »

baldeagle wrote: post #3
pnemonic wrote: post #2

Serious 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.

Once you acknowledge their bias, they do know an awful lot about banking

Sure, but I really don't. And a lot of other folks are the same. I know they are both biased and have financial incentives to lie or mislead me. As much as I might try, I know I might not be able to parse out the bullshit from the facts. Those facts are gonna stink of the bullshit even if I can verify it.

At least with something like a plumber, I can get a second opinion and so on, and I might just be able to take care of the issue myself instead. This just isn't the case with a bank.

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

#252

Post by karmakurtisaani »

kevinfat wrote: post #247
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 often hear the interest rates yielded this result of massive inflation or massive recession. But I'm not sure I believe that. I'm not convinced that the 0% interest rates lead to the massive inflation. So a non-mainstream economist Richard D. Wolff asked the elephant in the room question which no one seems to be asking which is to point out that we don't know how much of the price increases is simply due to compani…

That's a very good point. I don't have any data, but I feel like many industries have been consolidated into the hands of few companies since the crisis of 2008. Now they all can raise prices together using inflation as an excuse.

See the big oil and its record profits last year for an example.

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

#253

Post by tomcam »

vlovich123 wrote: post #160
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…

> A market of 350 million high income people (by global standards) under one regulatory framework China almost has the same number of millionaires. Per capita it’s not as good, but in terms of volume. And I’d say they’re closer to a single regulatory framework than the US which has all sorts of conflicting state laws which get in the way of interstate commerce (despite the commerce clause). Sure there are a lot of ad…

Guess where many, many Chinese millionaires have been moving the last 10 years or so?

Anywhere but China. It is a failing state with a plummeting economy and subject to even more arbitrary control over the money, its citizens own than the USA.

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

#254

Post by Broken_Hippo »

pdonis wrote: post #95
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.

On the other hand, $4500 is nearly 3 months of income for quite a few people, pre-tax. ($10/hour, 40 hours a week for 3 months is $4800). And it isn't like you are going to be able to save much at those wages.

In other words, a significant amount of Americans have little-to-no money saved.

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

#255

Post by tomcam »

paganel wrote: post #242
safety1st wrote: post #175

Earlier quoted context omitted.

For sure China has a ton of people and a huge economy. Fair point that the regulatory framework there may be more homogenous, but it's also weaker. And it lacks all the other inbuilt advantages I mentioned. Remember, the USA can ship goods back and forth between itself and what... 90% of the ex-US global economy? With very little geopolitical interference. This is largely a function of geography, plop a cargo ship in…

I think this is a skewed perspective. In case of a war the Chinese leaders won't care about the fact that they won't be able to sell their plasticky stuff to Europe or the US, they'll only care to have enough food for their population and enough raw materials for their Army (it takes lots of iron and access to cheap energy to make lots of artillery shells). Lack of enough food for their population was what brought th…

Spot on. Russia will have much more grain if it crushes Ukraine, which is very possible.

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

#256

Post by tomcam »

FredPret wrote: post #196
vlovich123 wrote: post #160

Earlier quoted context omitted.

> A market of 350 million high income people (by global standards) under one regulatory framework China almost has the same number of millionaires. Per capita it’s not as good, but in terms of volume. And I’d say they’re closer to a single regulatory framework than the US which has all sorts of conflicting state laws which get in the way of interstate commerce (despite the commerce clause). Sure there are a lot of ad…

That isn’t true - the US has 39% of all millionaires, and China has 10%. [0] Clearly a lead that can be overcome, but now with China’s turn back to proper communism, they will probably never get there. [0] Page 27: https://www.credit-suisse.com/media/assets/corporate/docs/ab...

China is not, of course, turning back to proper communism. It is a wildly corrupt dictatorship, and will be for the foreseeable future. It was an oligarchy for many generations (traditionally, their central committee was allowed to preserve opposing opinions among factions, a practice Xi extinguished), but Xi has definitely removed the vast majority of his competent opponents.

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

#257

Post by blitzar »

arcticbull wrote: post #91
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 is…

The average net worth of me and Elon Musk is $96.3bn.

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

#258

Post by makomk »

smcin wrote: post #46
JumpCrisscross wrote: post #9

Earlier quoted context omitted.

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 Glass-Steagall and 2008 crisis, Robert Reich and Elizabeth Warren disagree with you [ https://robertreich.org/post/124114229225 ]. According to you, which legislation prevented the conflict-of-interest in banks writing trillions in subprime mortgages decades prior to 1999? or securities firms selling CDOs backed by subprime MBS? IIUC, the issue in 2008 was never "preventing mortgage CDOs" outright, but preventing…

Robert Reich and Elizabeth Warren have massive partisan and ideological axes to grind, and their careers basically rely on convincing people that it's all the fault of big businesses convincing the government to lift regulations and that they could fix all of this if voters only gave them and their side the power.

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

#260

Post by FredPret »

satellite2 wrote: post #235
FredPret wrote: post #195

Earlier quoted context omitted.

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…

It's basically impossible to do any financial transactions in Switzerland as an American. Even something as mundane as opening a bank account to receive your salary is extremely complicated as most banks refuse to do business with Americans. A lot of Americans there renounced their citizenship because of this.

That's due to American regulations. If any American has an account at your bank, they can audit your whole bank.

So now there are banks that will never take an American customer, and banks that specialize in Americans.

Post reply on HN