Regarding rate hikes, to the chagrin of many DC politicians, Powell is serious about fighting inflation. The normalization of rates may make him the most significant Fed Chair since Volker. ZIRP was a big mistake.
By the way, being a consensus builder by nature, I sometimes wonder where the areas of agreement are among participants here. I suspect there are more than we might realize. It might even be fun to have a separate thread to try to identify them. But, I guess that virtually everyone agrees with the substance of this statement: ZIRP was a mistake.
"The Great Unwind is under way. It is the consequence of monetary and currency distortions. . ."
"US Treasury bond yields could easily double, and the political class will be powerless to stop them going even higher. The implications for interest rates globally are that they will be forced considerably higher as well."
". . . residential property prices in the US and elsewhere can be expected to fall further, reflecting rising mortgage costs for marginal demand."
"Led by the Saudis, for the first time a plethora of undeveloped commodity exporting nations are finding there is safety in numbers, and can turn their backs on the dollar."
You seem to be hell bent on the destruction of America. You post these articles over and over and it's the same BS that these doomsayers have been preaching for the past half century. No matter how much you fantasize and wish for the demise of this great nation you will never see it happen in your lifetime. If you hate it here so much I'm sure there are a few other countries out there that would gladly accept you and your anti-American views. SMPR!
@blitzdude said:
You seem to be hell bent on the destruction of America. You post these articles over and over and it's the same BS that these doomsayers have been preaching for the past half century. No matter how much you fantasize and wish for the demise of this great nation you will never see it happen in your lifetime. If you hate it here so much I'm sure there are a few other countries out there that would gladly accept you and your anti-American views. SMPR!
Nope, just hell bent on exposing it. The best investment decisions require the best information. Many of these "doomsayer" articles use actual public data/charts to make their point. They're conspiracy theories are slowly being exposed as truth.
You gotta stop going with New Work Times and MSNBC. Your sources of information are based on what is fed to them. They are nothing more than PR guys running with the press releases they are given. Appears you're sucked in. There's still hope for those willing to dig deeper for truth.
I appreciate that you are fascinated with me and am entertained with your attacks. Instead of guessing what my ideals and beliefs are simply click on the link in my signature. Hopefully it will untangle your twisted mind, but I'm not counting on it.
@psuman08 said:
In my opinion, inflation will not be close to the targeted 2% until we are energy independent again. Powell does not have the dials to turn.
agree
Just like ZIRP was a mistake so is raising rates so quickly. I am not a fan of Powell or his ego.
While we know free (QE) and cheap (ZIRP) money were major causes of inflation, now that it is a problem how would you tackle it?
Me? I'd raise rates to 10% to start with. Pain comes with cure. Something we should have understood and livid with in 2008.
@Higashiyama said:
By the way, being a consensus builder by nature, I sometimes wonder where the areas of agreement are among participants here. I suspect there are more than we might realize. It might even be fun to have a separate thread to try to identify them. But, I guess that virtually everyone agrees with the substance of this statement: ZIRP was a mistake.
Another big mistake was the 1999 repeal of the Glass Steagall Act of 1933 that kept Investment Banks and Brokerages out of the Commercial Banking business. If you want to look for causes of inflation.....look no further than the TBTF banks and otc derivatives. It's certainly not deflationary....lol. This stuff was rocket fuel for the SM from 2009-2020. And not of it ever appears in any monetary aggregate (ie M0, M1, M2).
Recent investigations and FOIA requests have now brought to light where the TARP and other "funny" money distributed by the FED went to paper over all the otc derivatives losses of the 2008-2010 financial crisis. $19.6 TRILLION in documented payouts to the major banks of the world.....yes, the same ones who destroyed the MBS and CDS markets by 2009. Consider all the times on the forum where the pro-TBTF banking pundits have espoused that there is NO significant OTC derivatives risk at the "notional" level. The risk as preached by them is only 1-3% tops and easily covered by the FED and its banks through some nifty netting schemes and complicated mathematical modeling.....which is why we don't need "marked to market" anymore. Well, that didn't work so well back in 2008-2010. The total MBS and CDS markets at that time were on the order of a piddly $70 TRILL ($61 TRILL due to CDS and $9 TRILL MBS). Which was a mere 6% of the total world OTC derivatives market by the 2008 peak.
No matter how you slice it, paying out nearly $20 TRILL to the bankers is a load of cash....certainly not 0.5% to 2% of what actually failed.....the failure pay out rate was 28%. And paid to the precise players who caused the crash in the first place by abusing the repeal of Glass-Steagall. Well, at least that was much better than the 91% failure rate seen at Lehman Brothers when they were flushed down the toilet.
The interest swaps were not stressed in that crash and did not fail. Which left only the MBS and CDS markets to be papered over. Imagine what the payout rates could be if the 10X-20X larger Interest Rate Derivatives go bust down the road? The CDS markets were reigned in over the last decade, supposedly a much better netting program with highly reduced risk. Maybe so. But were the same so-called "fixes" then applied to the much larger Interest Rate Derivatives?
Not dissolving the Fed is a mistake.
Money from nothing is a mistake.
No matter how you slice it, paying out nearly $20 TRILL to the bankers is a load of cash....certainly not 0.5% to 2% of what actually failed.....the failure pay out rate was 28%. And paid to the precise players who caused the crash in the first place by abusing the repeal of Glass-Steagall. Well, at least that was much better than the 91% failure rate seen at Lehman Brothers when they were flushed down the toilet.
I contend that almost all of the problems we've seen are the result of using debt as "money" when it should be considered a prime liability instead of an asset. Crazy stuff, and there's no good way to dig out of it.
Q: Are You Printing Money? Bernanke: Not Literally
The US debt increase in just the last two months alone (July and August) will eclipse $500B. The fiscal year ending 30 Sep 23, deficit will easily eclipse $2T. Pandemic level deficit, but without the pandemic. This fiscal year marks the US's largest deficit increase ever in a year that was not the result of a recession, national emergency, or war. Let the good times roll!
@RobM said:
The US debt increase in just the last two months alone (July and August) will eclipse $500B. The fiscal year ending 30 Sep 23, deficit will easily eclipse $2T. Pandemic level deficit, but without the pandemic. This fiscal year marks the US's largest deficit increase ever in a year that was not the result of a recession, national emergency, or war. Let the good times roll!
@blitzdude said:
The doomsday crowd always seem to be rooting for the end...god bless "Merica, SMPR!, #Yawn.
.
The post prior to yours is factually accurate. Deal with it.
@blitzdude said:
You seem to be hell bent on the destruction of America. You post these articles over and over and it's the same BS that these doomsayers have been preaching for the past half century. No matter how much you fantasize and wish for the demise of this great nation you will never see it happen in your lifetime. If you hate it here so much I'm sure there are a few other countries out there that would gladly accept you and your anti-American views. SMPR!
There are real problems from governance to ballooning debt. In response to these very real problems Congress keeps hobbling the economy by reducing taxes for trickle down to raising spending for nonsense. Congress knows their behavior is acceptable because the media act as cheerleaders for everything they do. Science, government, and the press are all bought and paid for now days so anyone who dares question anything must be a traitor, an idiot, or wholly ignorant.
@blitzdude said:
You seem to be hell bent on the destruction of America. You post these articles over and over and it's the same BS that these doomsayers have been preaching for the past half century. No matter how much you fantasize and wish for the demise of this great nation you will never see it happen in your lifetime. If you hate it here so much I'm sure there are a few other countries out there that would gladly accept you and your anti-American views. SMPR!
There are real problems from governance to ballooning debt. In response to these very real problems Congress keeps hobbling the economy by reducing taxes for trickle down to raising spending for nonsense. Congress knows their behavior is acceptable because the media act as cheerleaders for everything they do. Science, government, and the press are all bought and paid for now days so anyone who dares question anything must be a traitor, an idiot, or wholly ignorant.
Huh? Anyone else cashing out their I-bonds in the AM? Good times. THKS! UNCLE SAM!!
ZIRP is no longer in effect. The hyper-inflation predicted by Art History majors who never took a monetary economics course didn't show up.
Another big mistake was the 1999 repeal of the Glass Steagall Act of 1933 that kept Investment Banks and Brokerages out of the Commercial Banking business. If you want to look for causes of inflation.....look no further than the TBTF banks and otc derivatives. It's certainly not deflationary....lol. This stuff was rocket fuel for the SM from 2009-2020. And not of it ever appears in any monetary aggregate (ie M0, M1, M2).
Except there was no inflation during that time and the repeal of G-S has nothing to do with inflation or monetary aggregates.... but everything to do with competing with European, Japanese, and Chinese banks. If you want all good-paying financial and banking jobs to be in Shangai, Bejing, and other cities in Southern China....put back up G-S.
Sorry, but there were NO BAILOUTS of Wall Street banks. There was a bailout of smaller regional commercial banks...small local banks (favorites of politicians)....the United Auto Workers and AFL-CIO....and just a few months ago, the Teamsters Penion Fund (cost = $36,000,000,000).
You focus on non-existent "bailouts" on Wall Street because a politically biased media elite wants you to...while no mention of a real bailout and more to come (probably trillions when including S&L pension/OPEB benefits).
The government made money off TARP. They made a FORTUNE off TARP loans to Wall Street banks (most of whom didn't need the $$$).
The Teamsters and AFL-CIO will NOT be paying back $1 of the $36,000,000,000 bailout of Central States Pension Fund.
Don't look for any media or other accounts of this REAL bailout. They don't exist.
Recent investigations and FOIA requests have now brought to light where the TARP and other "funny" money distributed by the FED went to paper over all the otc derivatives losses of the 2008-2010 financial crisis. $19.6 TRILLION in documented payouts to the major banks of the world.....yes, the same ones who destroyed the MBS and CDS markets by 2009. Consider all the times on the forum where the pro-TBTF banking pundits have espoused that there is NO significant OTC derivatives risk at the "notional" level. The risk as preached by them is only 1-3% tops and easily covered by the FED and its banks through some nifty netting schemes and complicated mathematical modeling.....which is why we don't need "marked to market" anymore. Well, that didn't work so well back in 2008-2010. The total MBS and CDS markets at that time were on the order of a piddly $70 TRILL ($61 TRILL due to CDS and $9 TRILL MBS). Which was a mere 6% of the total world OTC derivatives market by the 2008 peak.
You are confusing notional values with values-at-risk. There has been no "documented" payouts of $20 trillion that I have seen.
No matter how you slice it, paying out nearly $20 TRILL to the bankers is a load of cash....certainly not 0.5% to 2% of what actually failed.....the failure pay out rate was 28%. And paid to the precise players who caused the crash in the first place by abusing the repeal of Glass-Steagall. Well, at least that was much better than the 91% failure rate seen at Lehman Brothers when they were flushed down the toilet.
No matter how you slice it, $20 trillion didn't go to anybody unless you count loans daily or weekly or monthly. I suspect your pseudo-journalists are confusing repurchase and reverse repurchase agreements. Central bank balance sheets didn't even go up by half of that amount and it was subsequently larglely unwound.
The interest swaps were not stressed in that crash and did not fail. Which left only the MBS and CDS markets to be papered over. Imagine what the payout rates could be if the 10X-20X larger Interest Rate Derivatives go bust down the road? The CDS markets were reigned in over the last decade, supposedly a much better netting program with highly reduced risk. Maybe so. But were the same so-called "fixes" then applied to the much larger Interest Rate Derivatives?
ZIRP is no longer in effect. The hyper-inflation predicted by Art History majors who never took a monetary economics course didn't show up.
Another big mistake was the 1999 repeal of the Glass Steagall Act of 1933 that kept Investment Banks and Brokerages out of the Commercial Banking business. If you want to look for causes of inflation.....look no further than the TBTF banks and otc derivatives. It's certainly not deflationary....lol. This stuff was rocket fuel for the SM from 2009-2020. And not of it ever appears in any monetary aggregate (ie M0, M1, M2).
Except there was no inflation during that time and the repeal of G-S has nothing to do with inflation or monetary aggregates.... but everything to do with competing with European, Japanese, and Chinese banks. If you want all good-paying financial and banking jobs to be in Shangai, Bejing, and other cities in Southern China....put back up G-S.
Sorry, but there were NO BAILOUTS of Wall Street banks. There was a bailout of smaller regional commercial banks...small local banks (favorites of politicians)....the United Auto Workers and AFL-CIO....and just a few months ago, the Teamsters Penion Fund (cost = $36,000,000,000).
You focus on non-existent "bailouts" on Wall Street because a politically biased media elite wants you to...while no mention of a real bailout and more to come (probably trillions when including S&L pension/OPEB benefits).
The government made money off TARP. They made a FORTUNE of TARP loans to Wall Street banks (most of whom didn't need the $$$).
The Teamsters and AFL-CIO will NOT be paying back $1 of the $36,000,000,000 bailout of Central States Pension Fund.
Don't look for any media or other accounts of this REAL bailout. They don't exist.
Recent investigations and FOIA requests have now brought to light where the TARP and other "funny" money distributed by the FED went to paper over all the otc derivatives losses of the 2008-2010 financial crisis. $19.6 TRILLION in documented payouts to the major banks of the world.....yes, the same ones who destroyed the MBS and CDS markets by 2009. Consider all the times on the forum where the pro-TBTF banking pundits have espoused that there is NO significant OTC derivatives risk at the "notional" level. The risk as preached by them is only 1-3% tops and easily covered by the FED and its banks through some nifty netting schemes and complicated mathematical modeling.....which is why we don't need "marked to market" anymore. Well, that didn't work so well back in 2008-2010. The total MBS and CDS markets at that time were on the order of a piddly $70 TRILL ($61 TRILL due to CDS and $9 TRILL MBS). Which was a mere 6% of the total world OTC derivatives market by the 2008 peak.
You are confusing notional values with values-at-risk. There has been no "documented" payouts of $20 trillion that I have seen.
No matter how you slice it, paying out nearly $20 TRILL to the bankers is a load of cash....certainly not 0.5% to 2% of what actually failed.....the failure pay out rate was 28%. And paid to the precise players who caused the crash in the first place by abusing the repeal of Glass-Steagall. Well, at least that was much better than the 91% failure rate seen at Lehman Brothers when they were flushed down the toilet.
No matter how you slice it, $20 trillion didn't go to anybody unless you count loans daily or weekly or monthly. I suspect your pseudo-journalists are confusing repurchase and reverse repurchase agreements. Central bank balance sheets didn't even go up by half of that amount and it was subsequently larglely unwound.
The interest swaps were not stressed in that crash and did not fail. Which left only the MBS and CDS markets to be papered over. Imagine what the payout rates could be if the 10X-20X larger Interest Rate Derivatives go bust down the road? The CDS markets were reigned in over the last decade, supposedly a much better netting program with highly reduced risk. Maybe so. But were the same so-called "fixes" then applied to the much larger Interest Rate Derivatives?
I'll read this paper this week but understand that BIS is the Central Bank for central banks.
.
Member banks (owners) of the Federal Reserve Corporation are not going to fail (or even have a difficult time) because the "Fed" will do whatever is necessary to make things work out in their favor.
Where did the money for the TARP loans come from ?
You focus on non-existent "bailouts" on Wall Street because a politically biased media elite wants you to...while no mention of a real bailout and more to come (probably trillions when including S&L pension/OPEB benefits).
The government made money off TARP. They made a FORTUNE of TARP loans to Wall Street banks (most of whom didn't need the $$$).
Was the AIG bailout so that Goldman could salvage their derivative losses just imaginary? Of course, Hank Paulson had a conflict of interest in helping his alma mater buddies at GS, but let's not talk about that. Good old Hank was stuttering & sweating it out, but it all worked out for the banks, didn't it?
Who, exactly did the accounting when the govt made money from TARP? If you believe that, I've got a bridge in Arizona I'll sell you, cheap.
The "elite media" you talk about runs cover for the banks and Wall Street all day long, never mind the ballooning debt crisis that can't be fixed by anything but inflation, taxes or a total societal meltdown.
Q: Are You Printing Money? Bernanke: Not Literally
@dcarr said:
Member banks (owners) of the Federal Reserve Corporation are not going to fail (or even have a difficult time) because the "Fed" will do whatever is necessary to make things work out in their favor.
No, the Fed avoids systemic risk but the so-called "owners" of the Fed are merely passive shareholders. Do you think they have a say in if Jay Powell gets re-appointed ?
Lehman Brothers, Bear Stearns, Continental Illinois, Bank of New England, and thousands of other banks have failed or been liquidated and sold off.
Where did the money for the TARP loans come from ?
From the Fed's balance sheet as the Lender Of Last Resort. Actually, the Treasury created the credit lines for preferred stock issuance. Total net cost was under $40 billion, most for a few mid-sized banks, small community banks, the UAW (GM & Ford unions), and mortgage holders/homeowners bailed out.
@jmski52 said:
Was the AIG bailout so that Goldman could salvage their derivative losses just imaginary? Of course, Hank Paulson had a conflict of interest in helping his alma mater buddies at GS, but let's not talk about that. Good old Hank was stuttering & sweating it out, but it all worked out for the banks, didn't it?
Actually, he had a conflict of interest with his brother working at Lehman Brothers -- and he let it fail (wrongly) 6 months after mopping up Bear Stearns. Goldman could have lost 100% of the CDS with AIG and it wouldn't have impacted their solvency
Did you look at GS's balance sheet and stock value in September 2008 ? I did...hourly....as I owned GS bonds. I had skin in the game, most people commenting on it didn't or don't.
Who, exactly did the accounting when the govt made money from TARP? If you believe that, I've got a bridge in Arizona I'll sell you, cheap.
There are plenty of bridges in AZ, which one are you selling me cheap ? Make it one with tolls, thank you !
Last I checked...total profits were in the area of $100 BB. Wall Street profits ex-GSEs were about $35 BB. The GSE (Fannie/Freddie) profit were $110 BB. The LOSSES come from small banks....mid-sized regionals (both preferred favorites of politicians)....the UAW (also favored by politicians)....and homeowners underwater (also favored by politicians).
You can find the data at the Fed, Treasury, or ProPublic websites. My numbers are probably a bit stale, last I looked in-depth it was 2020 or 2021.
The "elite media" you talk about runs cover for the banks and Wall Street all day long, never mind the ballooning debt crisis that can't be fixed by anything but inflation, taxes or a total societal meltdown.
Clearly you don't read the financial and non-financial "mainstream" media press. I've worked with both for years....the fact that you would say that shows me you're new to this game.
@dcarr said:
Member banks (owners) of the Federal Reserve Corporation are not going to fail (or even have a difficult time) because the "Fed" will do whatever is necessary to make things work out in their favor.
No, the Fed avoids systemic risk but the so-called "owners" of the Fed are merely passive shareholders. Do you think they have a say in if Jay Powell gets re-appointed ?
.
They have a say in what Jay Powell (or whomever) does. They don't care who the chairperson is. They only care that the chairperson will do their bidding.
.
@GoldFinger1969 said:
Lehman Brothers, Bear Stearns, Continental Illinois, Bank of New England, and thousands of other banks have failed or been liquidated and sold off.
.
Yes. And note that NONE of them were member/owner banks of the Federal Reserve.
@dcarr said:
Where did the money for the TARP loans come from ?
From the Fed's balance sheet as the Lender Of Last Resort. Actually, the Treasury created the credit lines for preferred stock issuance. Total net cost was under $40 billion, most for a few mid-sized banks, small community banks, the UAW (GM & Ford unions), and mortgage holders/homeowners bailed out.
.
No, funds do not come from a "balance sheet". Funds come from a cash account. Who provided that cash for the bailouts ?
"Homeowners bailed out" ?
How were homeowners "bailed out" ?
All the bailout funds went to entities at or near the top of the pyramid.
None went to homeowners.
You can find the data at the Fed, Treasury, or ProPublic websites. My numbers are probably a bit stale, last I looked in-depth it was 2020 or 2021.
Spoken like a true believer.
Yeah, we're all supposed to believe numbers from the Fed (who never faces an audit and answers to no one), and the Treasury (who can't control their own money creation and answers to no one).
Goldman could have lost 100% of the CDS with AIG and it wouldn't have impacted their solvency
Yup, and they didn't have to eat their own derivatives losses anyway, courtesy of Paulson's $800 Billion one-page TARP bailout. Just for the asking. Who runs the govt, if not the bankers?
Lehman Brothers, Bear Stearns, Continental Illinois, Bank of New England, and thousands of other banks have failed or been liquidated and sold off.
It's a small club, and they weren't in it.
Q: Are You Printing Money? Bernanke: Not Literally
@cohodk said:
So.....it's now a year and half after the first post.
Some dire warnings about how 2023 was going to go....yikes, big fail there.
Your lives going well? Still working? Retirement accounts near highs? Bank forclose on house? Food in the pantry?
LG aka Life's F'n Great at least financially. BASE salary is 43% higher than this time last year, IRAs, 401K's, ROTHS at all time record highs. The pantry? It's so packed this once hard core running fool is becoming a fat pig. Farm could be paid off in cash tomorrow. lol bless "Merica! Thank you!!
Comments
......................The Answer lies here; _ WHO IS JOHN GAULT........._..__
Lowering the credit thresholds for credit card debt doesn't mean that the economy is booming.
I knew it would happen.
It means:
Unpaid (defaulted) sovereign, corporate and personal debt are the root cause of a failing economy.
Give Me Liberty or Give Me Debt
9 Signs That The U.S. Consumer Is About To Break:
"But despite everything that has already happened, Fed officials are telling us that “multiple rate hikes” may still be necessary."
Give Me Liberty or Give Me Debt
Regarding rate hikes, to the chagrin of many DC politicians, Powell is serious about fighting inflation. The normalization of rates may make him the most significant Fed Chair since Volker. ZIRP was a big mistake.
By the way, being a consensus builder by nature, I sometimes wonder where the areas of agreement are among participants here. I suspect there are more than we might realize. It might even be fun to have a separate thread to try to identify them. But, I guess that virtually everyone agrees with the substance of this statement: ZIRP was a mistake.
and those that said so at the time were conspiracy theorists. How long before a majority realizes that free money was a mistake. LOL
Give Me Liberty or Give Me Debt
Beware the great unwind - It's less about economics and more about faith in fiat
"The Great Unwind is under way. It is the consequence of monetary and currency distortions. . ."
"US Treasury bond yields could easily double, and the political class will be powerless to stop them going even higher. The implications for interest rates globally are that they will be forced considerably higher as well."
". . . residential property prices in the US and elsewhere can be expected to fall further, reflecting rising mortgage costs for marginal demand."
"Led by the Saudis, for the first time a plethora of undeveloped commodity exporting nations are finding there is safety in numbers, and can turn their backs on the dollar."
Give Me Liberty or Give Me Debt
You seem to be hell bent on the destruction of America. You post these articles over and over and it's the same BS that these doomsayers have been preaching for the past half century. No matter how much you fantasize and wish for the demise of this great nation you will never see it happen in your lifetime. If you hate it here so much I'm sure there are a few other countries out there that would gladly accept you and your anti-American views. SMPR!
The whole worlds off its rocker, buy Gold™.
Nope, just hell bent on exposing it. The best investment decisions require the best information. Many of these "doomsayer" articles use actual public data/charts to make their point. They're conspiracy theories are slowly being exposed as truth.
You gotta stop going with New Work Times and MSNBC. Your sources of information are based on what is fed to them. They are nothing more than PR guys running with the press releases they are given. Appears you're sucked in. There's still hope for those willing to dig deeper for truth.
I appreciate that you are fascinated with me and am entertained with your attacks. Instead of guessing what my ideals and beliefs are simply click on the link in my signature. Hopefully it will untangle your twisted mind, but I'm not counting on it.
Give Me Liberty or Give Me Debt
In my opinion, inflation will not be close to the targeted 2% until we are energy independent again. Powell does not have the dials to turn.
Just like ZIRP was a mistake so is raising rates so quickly. I am not a fan of Powell or his ego.
agree
While we know free (QE) and cheap (ZIRP) money were major causes of inflation, now that it is a problem how would you tackle it?
Me? I'd raise rates to 10% to start with. Pain comes with cure. Something we should have understood and livid with in 2008.
Give Me Liberty or Give Me Debt
Another big mistake was the 1999 repeal of the Glass Steagall Act of 1933 that kept Investment Banks and Brokerages out of the Commercial Banking business. If you want to look for causes of inflation.....look no further than the TBTF banks and otc derivatives. It's certainly not deflationary....lol. This stuff was rocket fuel for the SM from 2009-2020. And not of it ever appears in any monetary aggregate (ie M0, M1, M2).
https://wallstreetonparade.com/2023/08/wall-street-mega-banks-and-their-disgraceful-bailout-charts-since-the-repeal-of-the-glass-steagall-act-in-1999/
Recent investigations and FOIA requests have now brought to light where the TARP and other "funny" money distributed by the FED went to paper over all the otc derivatives losses of the 2008-2010 financial crisis. $19.6 TRILLION in documented payouts to the major banks of the world.....yes, the same ones who destroyed the MBS and CDS markets by 2009. Consider all the times on the forum where the pro-TBTF banking pundits have espoused that there is NO significant OTC derivatives risk at the "notional" level. The risk as preached by them is only 1-3% tops and easily covered by the FED and its banks through some nifty netting schemes and complicated mathematical modeling.....which is why we don't need "marked to market" anymore. Well, that didn't work so well back in 2008-2010. The total MBS and CDS markets at that time were on the order of a piddly $70 TRILL ($61 TRILL due to CDS and $9 TRILL MBS). Which was a mere 6% of the total world OTC derivatives market by the 2008 peak.
No matter how you slice it, paying out nearly $20 TRILL to the bankers is a load of cash....certainly not 0.5% to 2% of what actually failed.....the failure pay out rate was 28%. And paid to the precise players who caused the crash in the first place by abusing the repeal of Glass-Steagall. Well, at least that was much better than the 91% failure rate seen at Lehman Brothers when they were flushed down the toilet.
The interest swaps were not stressed in that crash and did not fail. Which left only the MBS and CDS markets to be papered over. Imagine what the payout rates could be if the 10X-20X larger Interest Rate Derivatives go bust down the road? The CDS markets were reigned in over the last decade, supposedly a much better netting program with highly reduced risk. Maybe so. But were the same so-called "fixes" then applied to the much larger Interest Rate Derivatives?
https://bis.org/publ/qtrpdf/r_qt1806b.htm
I voted the same as RickO.
I consider it an honor.
Forum members on ignore
Erba - coolstanley-dallasactuary-SDsportsfan
daltex
Not dissolving the Fed is a mistake.
Money from nothing is a mistake.
No matter how you slice it, paying out nearly $20 TRILL to the bankers is a load of cash....certainly not 0.5% to 2% of what actually failed.....the failure pay out rate was 28%. And paid to the precise players who caused the crash in the first place by abusing the repeal of Glass-Steagall. Well, at least that was much better than the 91% failure rate seen at Lehman Brothers when they were flushed down the toilet.
I contend that almost all of the problems we've seen are the result of using debt as "money" when it should be considered a prime liability instead of an asset. Crazy stuff, and there's no good way to dig out of it.
I knew it would happen.
The US debt increase in just the last two months alone (July and August) will eclipse $500B. The fiscal year ending 30 Sep 23, deficit will easily eclipse $2T. Pandemic level deficit, but without the pandemic. This fiscal year marks the US's largest deficit increase ever in a year that was not the result of a recession, national emergency, or war. Let the good times roll!
The doomsday crowd always seem to be rooting for the end...god bless "Merica, SMPR!, #Yawn.
The whole worlds off its rocker, buy Gold™.
.
The post prior to yours is factually accurate. Deal with it.
.
There are real problems from governance to ballooning debt. In response to these very real problems Congress keeps hobbling the economy by reducing taxes for trickle down to raising spending for nonsense. Congress knows their behavior is acceptable because the media act as cheerleaders for everything they do. Science, government, and the press are all bought and paid for now days so anyone who dares question anything must be a traitor, an idiot, or wholly ignorant.
Huh? Anyone else cashing out their I-bonds in the AM? Good times. THKS! UNCLE SAM!!
The whole worlds off its rocker, buy Gold™.
$60 in 2005 is like $100 or more today.
Breakevens have collapsed thanks to the miracle of fracking.
ZIRP is no longer in effect. The hyper-inflation predicted by Art History majors who never took a monetary economics course didn't show up.
Except there was no inflation during that time and the repeal of G-S has nothing to do with inflation or monetary aggregates.... but everything to do with competing with European, Japanese, and Chinese banks. If you want all good-paying financial and banking jobs to be in Shangai, Bejing, and other cities in Southern China....put back up G-S.
Sorry, but there were NO BAILOUTS of Wall Street banks. There was a bailout of smaller regional commercial banks...small local banks (favorites of politicians)....the United Auto Workers and AFL-CIO....and just a few months ago, the Teamsters Penion Fund (cost = $36,000,000,000).
You focus on non-existent "bailouts" on Wall Street because a politically biased media elite wants you to...while no mention of a real bailout and more to come (probably trillions when including S&L pension/OPEB benefits).
The government made money off TARP. They made a FORTUNE off TARP loans to Wall Street banks (most of whom didn't need the $$$).
The Teamsters and AFL-CIO will NOT be paying back $1 of the $36,000,000,000 bailout of Central States Pension Fund.
Don't look for any media or other accounts of this REAL bailout. They don't exist.
You are confusing notional values with values-at-risk. There has been no "documented" payouts of $20 trillion that I have seen.
No matter how you slice it, $20 trillion didn't go to anybody unless you count loans daily or weekly or monthly. I suspect your pseudo-journalists are confusing repurchase and reverse repurchase agreements. Central bank balance sheets didn't even go up by half of that amount and it was subsequently larglely unwound.
I'll read this paper this week but understand that BIS is the Central Bank for central banks.
Breakevens have collapsed thanks to the miracle of inflation.
Give Me Liberty or Give Me Debt
No, that would drive costs UP and lead to HIGHER break-evens.
I was an energy analyst when fracking started to hit. Initial break-evens were about $80/bbl. in 2006.....$60 by 2012.....$45 by 2018.
Those are CASH break-evens....probably have to add $15 a bbl. to generate a healthy return for shareholders and cover fixed costs.
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Member banks (owners) of the Federal Reserve Corporation are not going to fail (or even have a difficult time) because the "Fed" will do whatever is necessary to make things work out in their favor.
Where did the money for the TARP loans come from ?
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You focus on non-existent "bailouts" on Wall Street because a politically biased media elite wants you to...while no mention of a real bailout and more to come (probably trillions when including S&L pension/OPEB benefits).
The government made money off TARP. They made a FORTUNE of TARP loans to Wall Street banks (most of whom didn't need the $$$).
Was the AIG bailout so that Goldman could salvage their derivative losses just imaginary? Of course, Hank Paulson had a conflict of interest in helping his alma mater buddies at GS, but let's not talk about that. Good old Hank was stuttering & sweating it out, but it all worked out for the banks, didn't it?
Who, exactly did the accounting when the govt made money from TARP? If you believe that, I've got a bridge in Arizona I'll sell you, cheap.
The "elite media" you talk about runs cover for the banks and Wall Street all day long, never mind the ballooning debt crisis that can't be fixed by anything but inflation, taxes or a total societal meltdown.
I knew it would happen.
No, the Fed avoids systemic risk but the so-called "owners" of the Fed are merely passive shareholders. Do you think they have a say in if Jay Powell gets re-appointed ?
Lehman Brothers, Bear Stearns, Continental Illinois, Bank of New England, and thousands of other banks have failed or been liquidated and sold off.
From the Fed's balance sheet as the Lender Of Last Resort. Actually, the Treasury created the credit lines for preferred stock issuance. Total net cost was under $40 billion, most for a few mid-sized banks, small community banks, the UAW (GM & Ford unions), and mortgage holders/homeowners bailed out.
Actually, he had a conflict of interest with his brother working at Lehman Brothers -- and he let it fail (wrongly) 6 months after mopping up Bear Stearns. Goldman could have lost 100% of the CDS with AIG and it wouldn't have impacted their solvency
Did you look at GS's balance sheet and stock value in September 2008 ? I did...hourly....as I owned GS bonds.
I had skin in the game, most people commenting on it didn't or don't.
There are plenty of bridges in AZ, which one are you selling me cheap ? Make it one with tolls, thank you !
Last I checked...total profits were in the area of $100 BB. Wall Street profits ex-GSEs were about $35 BB. The GSE (Fannie/Freddie) profit were $110 BB. The LOSSES come from small banks....mid-sized regionals (both preferred favorites of politicians)....the UAW (also favored by politicians)....and homeowners underwater (also favored by politicians).
You can find the data at the Fed, Treasury, or ProPublic websites. My numbers are probably a bit stale, last I looked in-depth it was 2020 or 2021.
Clearly you don't read the financial and non-financial "mainstream" media press. I've worked with both for years....the fact that you would say that shows me you're new to this game.
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They have a say in what Jay Powell (or whomever) does. They don't care who the chairperson is. They only care that the chairperson will do their bidding.
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Yes. And note that NONE of them were member/owner banks of the Federal Reserve.
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No, funds do not come from a "balance sheet". Funds come from a cash account. Who provided that cash for the bailouts ?
"Homeowners bailed out" ?
How were homeowners "bailed out" ?
All the bailout funds went to entities at or near the top of the pyramid.
None went to homeowners.
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You can find the data at the Fed, Treasury, or ProPublic websites. My numbers are probably a bit stale, last I looked in-depth it was 2020 or 2021.
Spoken like a true believer.
Yeah, we're all supposed to believe numbers from the Fed (who never faces an audit and answers to no one), and the Treasury (who can't control their own money creation and answers to no one).
Goldman could have lost 100% of the CDS with AIG and it wouldn't have impacted their solvency
Yup, and they didn't have to eat their own derivatives losses anyway, courtesy of Paulson's $800 Billion one-page TARP bailout. Just for the asking. Who runs the govt, if not the bankers?
Lehman Brothers, Bear Stearns, Continental Illinois, Bank of New England, and thousands of other banks have failed or been liquidated and sold off.
It's a small club, and they weren't in it.
I knew it would happen.
So.....it's now a year and half after the first post.
Some dire warnings about how 2023 was going to go....yikes, big fail there.
Your lives going well? Still working? Retirement accounts near highs? Bank forclose on house? Food in the pantry?
Knowledge is the enemy of fear
LG aka Life's F'n Great at least financially. BASE salary is 43% higher than this time last year, IRAs, 401K's, ROTHS at all time record highs. The pantry? It's so packed this once hard core running fool is becoming a fat pig. Farm could be paid off in cash tomorrow. lol bless "Merica! Thank you!!
The whole worlds off its rocker, buy Gold™.