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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

#321

Post by Dylan16807 »

fijiaarone wrote: post #309
Dylan16807 wrote: post #229

Earlier quoted context omitted.

Position yourself for the windfall how? Let's say Alice will be wrong several times and then right once, and Bob will be right several times and wrong once. Both of them start with $10k. To give Alice every advantage, let's say her bets pay out 10x or nothing, and Bob's bets pay out 4x or nothing. We'll also say Alice magically knows which time she'll be right, but Bob won't know which time he'll be wrong. Alice will…

How is Bob getting a 400% return on every bet he makes? Especially when his strategy is to make the same bet that everyone else is making? Last I checked, Bob’s investments so closely tracked inflation, its indistinguishable. And it’s about 50-100 times less than you claim. Oh and Bob did not save 1/3 of his gains. To be fair, he spent it, living high on the irrational market all these years. Meanwhile, Alice scrimpe…

> Especially when his strategy is to make the same bet that everyone else is making?

Who said that? I was just responding to "It's better to be wrong until you're right than right until you're wrong...because you will get the last laugh."

I assumed that "right" in the first half is at least somewhat similar to "right" in the second half. And that "wrong" in the first half is at least somewhat similar to "wrong" in the second half.

If they're supposed to have inverse odds, then that wording is very misleading.

> Last I checked, Bob’s investments so closely tracked inflation, its indistinguishable.

???

Please elaborate on who you think Bob is, because whatever you think it was not my intent.

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

#322

Post by imtringued »

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 problem is the difference between the average and the median.

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

#323

Post by sandworm101 »

safety1st wrote: post #154
quags wrote: post #103

Earlier quoted context omitted.

If we go by another Peter, Peter Lynch in this case he would say no one can predict inflation or interest rates long term. Secondly his words is there is always something to worry about when investing - like when oil went to 40 and there would be a depression or when Japan was going to take over the world leading to Americas downfall - or when Japan was crashing and going to cause a depression. Or when oil went from…

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…

>> No other country can compare.

Except canada. The coasts. The transportation system, the tech industry... and canada has a far better-regulated banking sector, one that surfed past 2008 almost without incident. And for every natural resource, from water to uranium, Canada has more than it will ever need. I would far rather ride out the comming climate/economic crisis in calgary/vancouver than LA/SF.

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

#324

Post by fijiaarone »

JumpCrisscross wrote: post #9
smcin wrote: post #7

Earlier quoted context omitted.

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…

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.

Glass-Stegall would have prevented JP Morgan Chase Washington Mutual etc from participating in collateralized debt swaps, or from taking depositors money to do so.

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

#325

Post by imtringued »

arcticbull wrote: post #81
bogomipz wrote: post #79

Earlier quoted context omitted.

>"The q4 numbers came in showing the US economy was still expanding and now those same papers are telling me we're in a banking crisis on the basis of like two and a half banks, with SVB and CS both being fully rescued." Why would GDP(a lagging indicator) and a current event(a wave of banks over the last two week) be mutually exclusive? You also seem to have overlooked some significant details and context. To date th…

> SVB’s uninsured deposits(anything over 250k) accounted for 94% of its total deposits and the FDIC took the extraordinary step of insuring those deposit after the fact. Did they need to? It's not clear anyone would have lost anything at all because depositors are senior to equity and bond holders. All the bank's equity would have been wiped out sure (and it was anyways) but losses to depositors would likely be slim…

This strategy only makes sense if the Fed believes this to be a short term problem for which it is worth buying time for. If it was genuinely hopeless and in the next decade will see 5% interest, making all those 10 year bonds worthless then there is no rhyme or reason to bail anyone out. The return on selling bonds today or waiting until maturity would be identical.

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

#327

Post by imtringued »

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…

It's called a local maximum or prisoners dilemma. Ironically, the way out of a prisoners dilemma is coommunication and cooperation which implies that we are sitting in some mental prison rather than a physical one.

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

#328

Post by ptero »

TheOtherHobbes wrote: post #276
monero-xmr wrote: post #188

Earlier quoted context omitted.

I would argue the perceived haphazardness is an advantage. The more centrally planned the economy, the more likely an incompetent government takes power and mucks it up. Part of America’s genius is the (fairly) restricted powers and decentralized nature of responsibility.

Is this why the US financial system blows up so regularly?

That may be. But whatever those blowups are they tend to be a lot less damaging than at other places.

I lived through two growing up, and both times almost everyone lost almost all money. I will take the risk on my US bank account over those any time. My 2c.

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

#329

Post by Armisael16 »

fijiaarone wrote: post #295
kirse wrote: post #162

Earlier quoted context omitted.

No other country can compare. No one else has this. These in-built advantages are incredibly hard to beat. It's why it's on our currency - "e pluribus unum". It's also why Russia and China are constantly working to erode the unity of the American people, whether it's through false narratives that "we're more divided than ever", driving a wedge into political parties, fomenting rage-mode across social media, utilizing…

“A cord of many strands is not easily broken” is literally Fascism.

The idea people can get more done by working together is literally older than writing.

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

#330

Post by imtringued »

Avshalom wrote: post #82
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 mean hubris and arrogance are in full and open display pretty constantly. The inability to actually control shit is why its always a moving target. but the idea that rich people are acting in a manner to maintain/increase their wealth aint exactly a conspiracy theory.

If there are positive and zero sum games that can be played, then people who can win both of them will play them and ultimately win everything.

The question becomes identifying zero sum games and finding optimal solutions for the public at large.

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