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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

#331

Post by imtringued »

ashwagary wrote: post #123
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 all these conspiracy theories. >Let's just realize that we all have a lot less control over our environment than we think we do Do the privately run secretive organization that sets the time value of money and the people that influence it not have "control"? To be clear, I'm talking about the central bank.

The central bank has very little power over the economy actually. It basically only has one lever and it is akin to a wrecking ball. It's job is to clean up the mess, not control the economy.

Fed is 98% talk and 2% action.

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

#332

Post by Armisael16 »

bandrami wrote: post #294
ciconia wrote: post #178

Earlier quoted context omitted.

> No other country can compare. No one else has this. These in-built advantages are incredibly hard to beat. You left out the most important advantage: the US has plenty of oil and gas;

It's weird how people keep forgetting the US is the world's largest petrostate

The US is not a petrostate. Petrostates are defined not just by the large amounts of oil and gas they extract but the relative absence of other economic activity and the dependence of the state on that money.

42% of Saudi GDP is petroleum. 35% of Kazakh GDP is petroleum. 8% of US GDP is petroleum.

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

#333

Post by chaosbolt »

TheAlchemist wrote: post #292

The fact that they publish this in the first place, is worrying, to say the least. It's also quite true - the banking crisis won't be a repeat of 2008. But, unlike 2008 which was fairly limited to (arguably huge) banking and residential mortgage sectors, this crisis will hit hard everywhere - valuations are still insane, the % of zombie companies is off the charts, inflation is everywhere, FED and governments have mu…

Exactly and I doubt QE will work now, there is a reason pyramid schemes don't go up forever

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

#334

Post by tomcam »

tomcam wrote: post #253
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…

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.

* even more arbitrary control over the money its citizens own than the USA.

Thanks for inserting that comma, Siri

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

#335

Post by fijiaarone »

Joel_Mckay wrote: post #263

I find it more interesting few seem able to recall what happened the year prior in 2007. Recall the elevated marketing hype from those trimming portfolios knowing full well what was happening. What I see is a short term 30% sales bump in real-estate (ratio of debts in negative amortization) as the amateur tries to find inflationary shelters after getting disappointed by laggard bond markets. Kind of reminds one of gi…

Stop shining that light in my eyes.

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

#336

Post by acd »

This time its different.

Wait we have been through this before. The 2000 dot.com boom, 2008 subprime banking crisis where we bailed out the banks and the banking bonuses. 2023 silicon valley bank, credit suisse. Central bank zero interest policy caused this. Somehow it started in 1980-1990 Japan with their real eastate crisis and japanese bonds central banks going towards zero interest rates. Hopefully it will be better this time.

I guess now we will have a mix of startup bubble, real estate bubble, obligation bubble, stock proce inflation of p/e rates valuations.

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

#337

Post by fijiaarone »

Archelaos wrote: post #319

> For now, the magnitude of this problem is smaller I am not sure about that. In 2008, it was only a crisis in the US real estate lending market that became contagious. Now, it is a crisis of global inflation. All long-term loans were granted by the banks in recent years with the expectation of much lower interest rates. Their prices were ment to cover the risks. Sinces all such loans were too cheap, they actually do…

In 2008 it was also Chinese real estate and European banking recklessness and Japanese monetary policy that provided the sugar cubes.

This time, it’s US monetary policy being the fuel to the house of cards built on top of the burning wreck of 2008 that was papered over.

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

#338

Post by CamperBob2 »

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?

And why it recovers so quickly.

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

#339

Post by Jochim »

FredPret wrote: post #264
ljf wrote: post #236

Earlier quoted context omitted.

True, but look at the rental markets for the majority of Americans that don't live in the rich coastal areas. And talk about unprofessional business - you have unprofessional legal professionals in parts of the US. Where America is great, it is great. But for the rest of it, it can be a very differently life for most of the inhabitants.

Compare "poor" America with poor (insert geographic area here). There's no comparison. It's hugely, vastly better in the States. The only other places that have large backwater areas that can compete are maybe Canada and Australia. This is due to investment by rich people in rental real estate and businesses such as Walmart, Costco, Amazon, etc. When a family like the Waltons have a net worth in the 100's of $Bn's, t…

I'm not sure the Waltons are a great example to be honest. They pay many of their employees so poorly that they're in receipt of state benefits. Society is effectively paying a portion of Walmart's labour cost. Until that's no longer the case I don't think the Waltons deserve a penny.

To address some of your other points:

A poor person in my country is allowed to take time off for illness without fear of being fired. That time isn't subtracted from their legally mandated minimum number of holiday days.

A poor person in the US will show up to work sick because they know their boss can let them go. Their colleagues might then get sick.

While I'm not sure how common it is, I've seen US news articles lauding co-workers for donating sick days to a colleague with a life threatening illness. While they're obviously doing a good thing, the necessity of the act honestly comes across as barbaric.

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

#340

Post by safety1st »

paganel wrote: post #240
mike_d wrote: post #193

Earlier quoted context omitted.

Whenever the "what actually backs the US dollar" discussion comes up I remind them: 11 aircraft carriers.

> 11 aircraft carriers. That only works when the US has to fight military super-powers that rely on sea-transport in order to feed their people and their military, like Japan had to do in WW2. The moment another super-power stops depending on sea routes in order to provide basic needs for its people and its military then things start getting more complicated. Case in point, the current Russia + China alliance. They c…

The real purpose of the carriers is not to fight a war, but to assert control of sea lanes. In a globalized economy your country needs access to maritime shipping lanes to survive. The carriers basically act as an area denial threat, preserving the ability of the US and its allies to trade and prosper, denying that to anyone who messes with them.

If Russia and China decide they're going to get together and be super trade buddies but the US denies them the trade lanes with everyone else, that's fine, they can share food and oil which are certainly important, but they'll still be broke and their economies will still collapse, especially China's which is super export dependent and seemingly approaching collapse right now anyway. China needs huge exports to survive in its current state and Russia doesn't have that much purchasing capacity.

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