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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

#431

Post by riffraff »

dtech wrote: post #272
riffraff wrote: post #243

Earlier quoted context omitted.

Italy for example (second exporter in Europe, tenth by GDP in the world) has notorious issues with its legal system (for a variety of reasons) where trial may take many years to be concluded.

That export sounds like a suspicious claim, do you have sources? afaik DE, FR and NL are much bigger exporters, and a random Google result seems to back that, placing Italy 5th in EU absolutely and almost last by GDP [1] [2] [1] https://data.worldbank.org/indicator/NE.EXP.GNFS.KD?location... [2] https://data.worldbank.org/indicator/NE.EXP.GNFS.ZS?location...

You're right, I don't know where I got that factoid. Perhaps it was an industrial goods only statistic? I can't find it anyway now, so I may have just misremembered it.

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

#432

Post by htss2013 »

fijiaarone wrote: post #320
Broken_Hippo wrote: post #251

Earlier quoted context omitted.

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,…

Funny, nobody is talking about Bitcoin or Decentralized Finance as a solution (or even a hedge) to this problem.

Ummm, they are? See Balaji's million dollar bitcoin bet.

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

#433

Post by tfourb »

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…

A poor person in the U.S. more likely as not does not have proper health insurance, no unemployment benefits to speak of, is highly unlikely to receive disability benefits even when diagnosed with a disability, is subject to a highly prejudiced and often violent police force, must rely on a famously expensive legal system to press civil claims, must content with a social environment that in many places is shaped by easy access to drugs, has no access to government housing, can be fired at will, etc. etc.

Yes, there are many countries where being poor is even worse. But among developed economies (so about a quarter of all countries), it is hard to come up with a worse place for being poor than the U.S.

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

#434

Post by tfourb »

nonethewiser wrote: post #352
FredPret wrote: post #226

Earlier quoted context omitted.

While it is true that the US mean is much higher than the median, the median person still benefits greatly from that wealth. The rich invest their wealth in business, real estate for rent, and real estate for themselves, making all these things better. I'm currently in the EU, in a country that outperforms the US in median wealth by about 20%. While it's clear that life here is good, I'm also struck by how much worse…

> After accounting for all income, charity, and non-cash welfare benefits like subsidized housing and food stamps, the poorest 20 percent of Americans consume more goods and services than the national averages for all people in most affluent countries. https://www.justfacts.com/news_poorest_americans_richer_than...

This "study" (not peer reviewed) is questionable in various ways and published by a "think tank" that has a strong libertarian agenda and an obvious axe to grind.

First of all, it compares figures from two different data sets. That is usually something that is quite hard to do correctly, because different data sets usually use different definitions for stuff like "household consumption" etc. Without a peer review it is really hard to tell if they've done it correctly and given the intricacies of economic statistics, my guess is they didn't.

But maybe even more importantly, the data concentrates on "private consumption" and thus leaves out all the goods and services that governments pay for – which is the entire point of public services like a public health care system. I.e. when a poor person in the U.S. visits a doctor, they pay for it out of pocket, the transaction will be registered as "private consumption". If I (in Germany) visit the doctor, no money ever changes hands. My contributions to the public health care system are deducted from my income before it ever reaches my account and about half don't come out of my own paycheck anyway, they are the responsibility of my employer.

So my guess would be that this "study" undercounts exactly what it professes to account for: Goods and services consumed (but not necessarily paid for) by the poor.

But how about we measure outcomes? For example in terms of life expectancy, the U.S. is much more "unequal" (if you are poorer, your are more likely to die younger) than other developed economies: https://ourworldindata.org/life-expectancy#inequality-of-lif...

And because the U.S. has worse life expectancy than other developed economies in general, poor people are likely to die younger in the U.S. than in, say, Germany in absolute terms as well. That is just one indicator but if you accept that "the number of years you live" is an important indicator for general quality of life, the U.S. seems to score quite badly on this.

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

#435

Post by listenallyall »

polski-g wrote: post #347
locallost wrote: post #192

Earlier quoted context omitted.

"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…

Peter Schiff has predicted 23 of the last 2 recessions.

Easy to laugh at him, I'd say it's more like the doctor who tells you to quit smoking or it's eventually going to kill you. The fact that you haven't died yet doesn't exactly prove the doctor is an idiot or wrong.

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

#436

Post by than3 »

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…

This isn't a banking crisis. This is an economic attack and the intent seems to be so the banking sector can consolidate further. Its being done with the tacit approval of the fed.

Every action taken in the last 50 years has been to slowly but surely move the banking sector to consolidate banking in the smallest number of hands to consolidate power.

2008 provided the perfect excuse for them to pass legislation that prevented new banks from being chartered. If you look at the requirements, the only way you can charter a bank is to accept personal liability for all outcomes of your board decisions and you are prohibited from receiving any compensation for it. If you can't find people for your board, you can't charter a bank, and you can't pay them for their time or risk. The only reasonable people that would charter banks are the people that lie, if they have no credibility why would you ever give them your money.

Worse, the stock market has a mechanic that allows any exposed company to be at the mercy of faceless entities even if they are in perfect financial health and follow good practices. Synthetic shares.

FRC was a most recent example of this. They had conveniently timed media packages and youtube videos posted in feeds that were edited showing bank runs on a Sunday, and the reflected window text was the wrong direction.

Worse, inflation is out of control, and the data and measures for it have been corrupted to show significantly lower percentages, and there are collusive options and shorted shares are being used to induce volatility halts when the price might exceed a resistance level, its very algorithmic.

The SEC is toothless, the currency will hyper-inflate, and we will be the next Argentina. Its what the Fed wants.

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

#437

Post by than3 »

whitehexagon wrote: post #374
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…

I am curious, but with all the national debt in western economies, will higher inflation help service that debt going forwards? I mean, prices rarely ever come back down... Combined with higher tax incomes, seems like a kinda win-win for the governments? Or is this a follow on from recent currency wars, if that is appropriate phrasing? I dont know much about world finance, at least not enough to have sold CS in time.…

> I am curious, with all the national debt, will higher inflation help service that debt going forwards?

The simple answer is no it wont. The liabilities that matter the most have COLA so when inflation goes up so do payments.

The only thing it actually does is make worthless any existing bonds so anyone holding them is out the money with special corrupt deals for critical infrastructure that might have exposure (i.e. blackrock having 1% bonds being swapped for current interest rate bonds). That would primarily be China, and the Saudis. I'd imagine that is what prompted segmenting the bond market with TIPS vs non-TIPS bonds.

The burden of inflation is placed on the populace, and when people are unable to afford basic necessities, and have to work as slaves (because currency is no longer a store of value and the crown of shadow government in effect seized property), unrest inevitably occurs.

The Fed is a private institution, not an actual branch of government, but they are seizing money from every wage-earner through inflation, and government does the same since percentages increase the basis amount taxed.

Its unfortunate but all the historic factors are slowly lining up with many of the same conditions previously seen between 1767-1776.

Don't get me wrong, this is beyond stupid, but I've come to realize the people in the positions that could stop this simply have no interest in doing so. Its more profitable for them to allow this to progress because "what are you going to do about it".

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

#438

Post by than3 »

chaosbolt wrote: post #333
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

I wish people would simply call things by the commonly known words that describe them. QE is money printing, and the trap of money printing is that eventually you run into issues where you inevitably have either a deflation spiral, or a hyper-inflation spiral once the store of value is no longer accepted for trade.

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

#439

Post by strken »

matthewdgreen wrote: post #239
strken wrote: post #93

Earlier quoted context omitted.

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…

People seem to have a hard time believing that organizations and people with large amounts of concentrated wealth would take coordinated actions to protect their wealth and ensure they gain more of it. They believe this counterintuitively, even when discussing organizations that are literally set up for the purpose of maintaining and gaining new wealth. None of this is a conspiracy, it’s just systems following incent…

Coordination within a bank is expected, yeah: a banker will say whatever is financially advantageous for them, and this is exactly what we all expect. Conspiracies like "rig the LIBOR index in exchange for day-old sushi" exist and don't surprise anyone too much when they're found out.

Close willing coordination between a whole bank or a whole newspaper is less believable. Small-scale coordination is possible, yeah: PR firms pitching articles, revolving-door hiring, conflicts of interest, bias upstream in academia, or even an editor meeting a banker for golf and squashing a story; these things are all believable. These are not the same as a statement like "the news media is helping shift wealth to the top", or at least they have many caveats.

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

#440

Post by pdonis »

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.

Correction, about $40K per American (or about $37K if we subtract cash on hand for businesses, per another post downthread). Still about 9 (or 8) times the median.
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