@Higashiyama said:
Although economics can be a useful discipline, one perpetual problem is that we tend to use economics 101 when we need economics 102.
Agree. Unfortunately most don't even understand econ 101.
@Higashiyama said:
Although economics can be a useful discipline, one perpetual problem is that we tend to use economics 101 when we need economics 102.
Agree. Unfortunately most don't even understand econ 101.
Those living in the United States and watching our economy for the last 15 years? it is easy to understand why they wouldn't understand economics 101.
The Econ 102 we've been living under is quite a show to watch.
@MWK said:
It was fraud, plain and simple. I know this because I'm one of thousands of people who fully knew of the fraud being perpetrated around 2003 or 2004 (I was actually slow to see it unlike the smartest people) and I knew, years in advance, that the entire banking system would be destroyed by the massive fraud which enabled the bubble. I also successfully shorted one of the absolute worst frauds, New Century Financial, from $25 to zero.
Why was it fraud if NCF was making reckless loans ? Reckless loans ACTIVELY ENCOURAGED by politicians in California, New York, and Washington, DC ?
Lots of their loans were legit. Lots weren't. But that doesn't make it fraud -- it just makes it risky.
Fraud implies illegal. Show me where it is ILLEGAL to make a risky mortgage loand...or float a risky junk bond....or issue stock in a risky start-up.
Sorry, MWK, great call on shorting NCF (they all went to zero) but it's not fraud to make dumb loans any more than its fraud to borrow on a credit card at 27%. Stupid, yes, but not fraud or illegal.
If anyone ever saw the Congressional testimony of former regulator William Black (he was one of the key regulators in the Savings and Loan crisis), he did a pretty good job of briefly explaining what the fraud was. I'm pretty sure that he wrote articles or papers that describe in greater detail how the fraud was perpetrated. An entire book he wrote on this subject is The Best Way To Rob a Bank Is To Own One. Here's a TED presentation he gave on elite accounting control frauds for those interested:
I think he was talking about the 1980's S&l Crisis with banks like "Gunbolt Savings & Loan" and other reckless lenders.
Again, for the most part, dumb and reckless but NOT necessarily illegal.
And, no, Lehman Brothers would not have gone bust if they had leveraged themselves with U.S. Treasuries. Interest rates were not at zero and by the time the crisis hit, U.S. Treasury prices actually increased, meaning that Lehman Brothers in this hypothetical situation would have made a huge profit not a loss.
My point is that you can lose money on ANYTHING leveraged 30-to-1. Carlyle Capital was the canary in the coal mine....they went under in 2007 and they owned AAA-rated Treasuries and Agencies. They went under.
And SVB just went under with super-long duration as rates rose.
@bidask said:
I have owned JPM stock since 2011....I have met personally Jamie Dimon 3 times in my career....the guy is exceptinally talented all things finance, I wish he would run for President
I think Netflix has a show on him.....
Simply the SMARTEST banker in the world.
Oh, and I bought the stock in 2011 in the low 30's ....still have it too.
We were in a restaurant in Manhattan when Jamie Dimon was in a table not too far from our group. Then he got the call about buying Bear Stearns.
Yes, smart guy -- now let's hope he dismantles that dolt Elizabeth Warren in testimony, a menace to the financial markets.
@dcarr said:
Who's idea was it to offer 125% equity home loans ?
Mortgage lenders and state regulators who saw them work out GREAT in 1997...and 1998....and 1999...and 2000....and 2001....and 2002....and 2003....and 2004.
Then....well.....it didn't work so well when housing prices don't go up 15% a year.
Oops.....
We can ABSOLUTELY blame "Wall Street banks".
Why ? How about blaming the GSEs like Fannie and Freddie who underwrote and ACTIVELY LOBBIED for loose regulation ? How about the pols who encouraged lowering the lending standards (guess which party they all belonged to) ?
The Wall Street banks mainly securitized the stuff, and a few kept it on their balance sheets (Bear, Lehman, Citi, etc.).
Sorry, Dcarr, I've covered banks as an analyst for 25 years, they didn't cause the crisis they are mainly a scapegoat.
Did you know that the UAW and AFL-CIO cost more in losses for TARP than the Top 10 largest Wall Street banks ?
Yeah, I didn't think so.
The whole financial debacle of 2008 had to do with the collapse in the value of mortgage-backed securities (MBS). Those securities were of obviously dubious value when 125% equity loans were part of the mix.
Of course...because housing prices fell for the 1st time in recorded history (1967). All economies are cyclical, the bigger the boom, the bigger the bust. This one accentuated by leverage.
Once it came time for bailouts, who got all the bailout money ? The banks. Trillions of dollars went their way. That money could have instead been directed towards taxpayers. Knocking off the principal amount owed on mortgages would have shored up the value of MBS, stabilizing the system. But no, the "puppet masters" can't allow any of the strings to be cut.
The banks weren't bailed out -- they REPAID the money and in many cases THEY DIDN'T WANT THE $$$$ !!
Again....you haven't studied the issue, Dcarr, you are just regurgitating what you have read from others....you're using 2nd and 3rd-hand sources. You need to study this issue if you want to be taken seriously.
Trillions did not go the banks way; the most they got were $45 billion and usually $25 BB or $10 BB. ALL PAID BACK....ALL EARNED A PROFIT FOR THE TREASURY.
Did I mention the politically-connected community banks LOST BILLIONS -- shhhhh.....you're not supposed to mention that, politically sensitive since the pols yelled about the Big Banks and Wall Street Banks (all paid back)...but not the smaller banks (HUGE LOSSES).
UAW and AFL-CIO ? $12 billion down the drain. Shhhh........not supposed to mention that.
I've reviewed HUNDREDS of TARP recipients. Trust me, what you read and what is reality are light-years away.
Goldfinger, you appear to be painting the banks as victims of the 2008 crisis. Did or did they not provide massive unjustified loans to unqualified home buyers and how big a part did this play in the bubble pop when housing prices declined? One could wrongly argue that it was a crash in housing prices that caused the 08 crisis. I would argue that banks were the cause of overinflated prices.
Banks enabled housewives and students to become overnight house flippers who fueled market prices beyond their fundamental value. FWIW we are now in the midst of a new breed of overnight house flippers, once again caught with their pants down (literally have one next door that was underwater the day it got listed). Add to that the housewives and students who this time around became day traders in the midst of easily available money (oops, there's that debt word again). It was debt (housing loans facilitated by banks) that brought the financial system to its knees. As we will soon see, we learned nothing from the mistakes made concerning debt and leverage. This time the easy money (more debt) turned housewives and students into stock day traders and crypto masters. This same easy money has turned financial institutions into derivative traders on a massive scale. The equity market, like the 2008 housing market will have its day of reckoning.
PS. I have not met JD from JPM and am not a banker groupie fooled into believing he is a banking messiah. I'm sure he is quite smart as you point out but fact remains he leads one of the most corrupt banking enterprises this nation has ever seen. The corruption is well documented by the Dept. of Justice who obviously views JPM as a revolving cash machine that spits out fines and penalties (the price of doing dirty business). Look for JD to become the next Treasury Secretary as JY's days are very numbered. I am convinced that at some point in history the mafia realized to go "legit" and that banking and finance were the direction they chose.
The Wall Street banks mainly securitized the stuff, and a few kept it on their balance sheets (Bear, Lehman, Citi, etc.).
Sorry, Dcarr, I've covered banks as an analyst for 25 years, they didn't cause the crisis they are mainly a scapegoat.
.
They knew the stuff (MBS) was no good, so they put lipstick on the pig and put it at the top of the list of things to get rid of, and sold it off to unsuspecting "investors".
.
UAW and AFL-CIO ? $12 billion down the drain. Shhhh........not supposed to mention that.
I've reviewed HUNDREDS of TARP recipients. Trust me, what you read and what is reality are light-years away.
.
These labor unions do have a history of corruption. I have never been a fan of them. They are one reason that a lot of manufacturing jobs went to China. Their pension funds have been mismanaged and politicians have been bailing out those pension plans for votes. Who is responsible for that mismanagement ? The union leaders and the banks they dealt with.
All pension plans should be like a 401K - contribute what you can/want into it, you "own" it, and no unfunded promises for the future.
The 12 billion was fairly small in comparison to the rest of the "economic stimulus" undertaken in 2008. But still unfair, regardless.
No one was ever forced to take out a mortgage. They made conscious, yet ill-formed decisions to take out mortgages based on their ignorance and emotions.
"I never would have smashed my finger if not for that hammer".
@derryb said:
Goldfinger, you appear to be painting the banks as victims of the 2008 crisis. Did or did they not provide massive unjustified loans to unqualified home buyers and how big a part did this play in the bubble pop when housing prices declined? One could wrongly argue that it was a crash in housing prices that caused the 08 crisis. I would argue that banks were the cause of overinflated prices.
Victims ? No....but let's just say they weren't the perpetrators. The GSEs were 1st in line. These policies were mandated by HUD in 1997 thanks to Andrew "Our Nursing Homes Are Safe" Cuomo and then loosened by political appointees at Freddie Mac and Fannie Mae, each of which got political appointees with NO EXPERTISE or knowledge in finance.
It wasn't a crash in housing prices...it was a slight decline in median prices instead of a slight increase. At the margins, big changes occur.
Banks enabled housewives and students to become overnight house flippers who fueled market prices beyond their fundamental value. FWIW we are now in the midst of a new breed of overnight house flippers, once again caught with their pants down. Add to that the housewives and students who this time around became day traders in the midst of easily available money (oops, there's that debt word again). It was debt (housing loans facilitated by banks) that brought the financial system to its knees. As we will soon see, we learned nothing from the mistakes made concerning debt and leverage. This time the easy money (more debt) turned housewives and students into stock day traders. This same easy money has turned financial institutions into derivative traders on a massive scale. The equity market, like the 2008 housing market will have its day of reckoning.
Stocks are slightly over-valued if interest rates are at current levels. I am bearish on stocks but don't say they are like housing in 2007 or stocks in 1999-2000. Nowhere even close.
Retail participation is much lower than 2000. Meme and retail peacked in January 2021.
I have not met JD from JPM and am not a banker groupie fooled into believing he is a banking messiah. I'm sure he is quite smart as you point out but fact remains he leads one of the most corrupt banking enterprises this nation has ever seen. The corruption is well documented by the Dept. of Justice who obviously views JPM as a revolving cash machine that spits out fines and penalties (the price of doing dirty business). Look for JD to become the next Treasury Secretary as JY's days are very numbered. I am convinced that at some point in history the mafia realized to go "legit" and that banking and finance were the direction they chose.
You have either preconceived biases and beliefs or like to read scandal sheets. Banking is heavily regulated and watched. I was docked 5% of my bonus years ago because a triplicate copy of some mumbo-jumbo bullbleep was not signed by me after I filled out the same form 3 times (I forgot to sign page 12 or 13 or something like that).
If banks were as corrupt as you state, I would think their stock prices would have done better than 5% a year for the last 20 years.
@dcarr said:
They knew the stuff (MBS) was no good, so they put lipstick on the pig and put it at the top of the list of things to get rid of, and sold it off to unsuspecting "investors".
No, ALL the tranches were money-good.....IF....IF....housing prices went up 3-5% (very modest). Instead, we had a 20% drop in the median sales price. Unheard of.....the 1980's S&L Crisis led to only a 7% drop in median home prices.
These labor unions do have a history of corruption. I have never been a fan of them. They are one reason that a lot of manufacturing jobs went to China. Their pension funds have been mismanaged and politicians have been bailing out those pension plans for votes. Who is responsible for that mismanagement ? The union leaders and the banks they dealt with.
The banks don't deal with them. You think Jimmy Hoffa sent $$$ to JP Morgan ? They engaged in self-dealing and helped themselves.
All pension plans should be like a 401K - contribute what you can/want into it, you "own" it, and no unfunded promises for the future.
100% agree.
The 12 billion was fairly small in comparison to the rest of the "economic stimulus" undertaken in 2008. But still unfair, regardless.
@GoldFinger1969 said:
RR, assume all of what you say is true (it isn't ):
What's your gameplan ? How do you make money off what you posted ? When does it happen ? If you were running an investment fund, what would you be in ?
All ears.....
And it is all true. I was around here in 2003 stating that the then $200 TRILL or so in otc derivatives would be a problem within a decade. Gold was $320 then. A projected price to help balance national debts and banking risks was $1200. And then later in 2010 upped to $1650....which all came to fruition within a decade. Derivatives did their worse blow up ever.
I don't run a hedge fund or determine others' portfolio's.....that's your job and Cohodk's. I just run my own "fund" and protect myself. To OPA's comment about the Riveria. I retired from the rat-race about 10 yrs ago in my 50's.
Your understanding of derivatives and bank risks seem to be on par with Liz Warren and what the main stream media consistently put out.....ie no risk there....no concern. We "beat" 2008-2009 and we'll do the same for 2023-20xx. Lehman Bros. went down because of their derivatives bets'....as did Bear Stearns and others. Not all of it publicized well for good reason......esp the actual payouts from the Central Banks, particularly the FED. It's all dark money anyways. Don't trifle the public or Congress with the details. The Interest Rate Swaps were never close to being tested in 2008. No one knows how they will be tested going forward. When one considers that little failures like LTCM and the Russian Currency Crisis in the later 1990's almost brought the world's financial system to its knees (before bailing them out) I wouldn't gloss over the potential affect of the 5X leverage the IRSwaps have over the MBS/CDS we saw fail system wide in 2008.
How many times can the system be "papered over" with created liquidity to save the day? In doing so US Sovereign debt from 2008 has gone from $10 TRILL to $31.5 TRILL (3X). Money Supply (M1) went from $1.4 TRILL to $19.6 TRILL (14X). If the system is showing cracks today, that's leftover from 2008 which was never properly addressed and fixed despite Dodd-Frank and other patches....most them since dismantled. At some point the papering over has to collapse under its own weight. Price of Gold is one of the warning signs. How does tracking all this influence my own money decisions? More PMs and less paper "stuff" to put in succinctly. Each person has to figure out their own numbers. Do stock owners want to go through another 2000-2011 or 1966-1982? Assuming that's what we're looking at through approx 2033. The markets are way overdue for another one of those 10 yr corrections. Wall Street Papering has kept it at bay though with many little crisis popping up all....the last one in 2019-2020.
After an 18 year under-performance of gold vs. stock market.....what's the next trend going to look like? How will $630 TRILL in derivatives, a $31.5 TRILL in national debt, and $20 TRILL in M1. For years it's always been a "thumbrule" that gold price eventually catches up to Sovereign Debt and M1. If it's catch up time where should one be weighted?
@OPA said:
rr your responses, as always, are to voluminous., and for the most part, over the last 15 years, have not come to fruition. I suppose, that's why you are still posting here, inlieu of enjoying your financial freedom on the Riviera. I do enjoy your posts and knowledge pertaining to coins.
See the above post....first paragraph. Oops. Go back through the threads and read about 2003-2011 again if you missed it.
Are you ready for a replay of that? My posts are generally long because the topics and supporting info is detailed. And for those who have no exposure or knowledge on the topic, it's a way to present them with the info. But then we have "short" posters who usually add nothing but bluster with their posts. They generally don't or can't present anything or support their own one word quips. They wouldn't even know where to start. Everything that was learned here on the Forum back in 2003-2011 seems to have been totally forgotten by many....who by the way....were wrong back then too. Dave Ramsey was an "influencer" around here back then. He and many others chuckled at PMs. He too was wrong on stocks and gold from 2003-2011. But, right from 2011-2020. Only the most recent trends are "remembered."
And quite comical that GoldFinger1969 points the entire 2008 banking crisis "finger" at Lehman Bros who happened to have 30-1 leverage......just like ALL the other TBTF banks at the time. You can't make this stuff up. What about BSC, WaMu, F&F Mac, Merrill Lynch, AIG, Indy Mac, MF Global, UBS, plus another 75 companies ? And the "official published accounting" of the dead bodies and payouts is not the "real" accounting. That will remain forever buried. And rather than point to leverage or Lehman as the "root cause".....how about the removal of the 1933 Glass Steagal in 2000 via the 2000 Commodity Futures Modernization Act. The law formally exempted over-the-counter derivatives trades between financial firms from routine regulation. Oops. It basically allowed all the previously regulated banks to become "betting banks." In other words uncontrolled 30-1 leverage. Apparently the lessons of LTCM in 1998, being guided by PhD economists and mathematicians fell on deaf ears. If I'm going to listen to an economist, it would be Martin Armstrong.
The govt and the other big banks and trading houses didn't want to help out Lehman....they hated them, their style, and wouldn't lift a finger. They would have been relatively easy to bail out or assume in retrospect. The irony here is that on average the entire industry of otc derivatives (currency swaps, commodity swaps, interest rate swaps, real estate and credit default swaps) at the time was leveraged around that same 30-1 range. It still is today. So if leverage was the bogey man back then.....it still is today. It might be a lot less risky in the MBS/CDS swaps today because those already failed once and things were changed. That's NOT the case for the interest rate swaps which are still the big money maker for the TBTF banks. Whatever the CB's papered over in 2008.....5X that amount will be needed with IR Swaps starting blowing up regularly as interest rates stay here or just go higher.
@Higashiyama said:
Although economics can be a useful discipline, one perpetual problem is that we tend to use economics 101 when we need economics 102.
They call it the "dismal" science for a reason. One of the dismal parts is that it's full of inaccuracies. It's about as much a science as the Federal Reserve is "Federal" and a "Reserve." I look at economics as a way to construct a system to support what the world's govt's and banking entities want....and to support those theories and goals. Maybe a course in shadow economics and banking 103 would be more useful for J6P to understand why Economics 101/102 never quite works as advertised. One only has to look at the track record of the govt and FED economists.
Comments
Economics 102?
Give Me Liberty or Give Me Debt
Although economics can be a useful discipline, one perpetual problem is that we tend to use economics 101 when we need economics 102.
Agree. Unfortunately most don't even understand econ 101.
Knowledge is the enemy of fear
Those living in the United States and watching our economy for the last 15 years? it is easy to understand why they wouldn't understand economics 101.
The Econ 102 we've been living under is quite a show to watch.
Why was it fraud if NCF was making reckless loans ? Reckless loans ACTIVELY ENCOURAGED by politicians in California, New York, and Washington, DC ?
Lots of their loans were legit. Lots weren't. But that doesn't make it fraud -- it just makes it risky.
Fraud implies illegal. Show me where it is ILLEGAL to make a risky mortgage loand...or float a risky junk bond....or issue stock in a risky start-up.
Sorry, MWK, great call on shorting NCF (they all went to zero) but it's not fraud to make dumb loans any more than its fraud to borrow on a credit card at 27%. Stupid, yes, but not fraud or illegal.
I think he was talking about the 1980's S&l Crisis with banks like "Gunbolt Savings & Loan" and other reckless lenders.
Again, for the most part, dumb and reckless but NOT necessarily illegal.
My point is that you can lose money on ANYTHING leveraged 30-to-1. Carlyle Capital was the canary in the coal mine....they went under in 2007 and they owned AAA-rated Treasuries and Agencies. They went under.
And SVB just went under with super-long duration as rates rose.
We were in a restaurant in Manhattan when Jamie Dimon was in a table not too far from our group. Then he got the call about buying Bear Stearns.
Yes, smart guy -- now let's hope he dismantles that dolt Elizabeth Warren in testimony, a menace to the financial markets.
Mortgage lenders and state regulators who saw them work out GREAT in 1997...and 1998....and 1999...and 2000....and 2001....and 2002....and 2003....and 2004.
Then....well.....it didn't work so well when housing prices don't go up 15% a year.
Oops.....
Why ? How about blaming the GSEs like Fannie and Freddie who underwrote and ACTIVELY LOBBIED for loose regulation ? How about the pols who encouraged lowering the lending standards (guess which party they all belonged to) ?
The Wall Street banks mainly securitized the stuff, and a few kept it on their balance sheets (Bear, Lehman, Citi, etc.).
Sorry, Dcarr, I've covered banks as an analyst for 25 years, they didn't cause the crisis they are mainly a scapegoat.
Did you know that the UAW and AFL-CIO cost more in losses for TARP than the Top 10 largest Wall Street banks ?
Yeah, I didn't think so.
Of course...because housing prices fell for the 1st time in recorded history (1967). All economies are cyclical, the bigger the boom, the bigger the bust. This one accentuated by leverage.
The banks weren't bailed out -- they REPAID the money and in many cases THEY DIDN'T WANT THE $$$$ !!
Again....you haven't studied the issue, Dcarr, you are just regurgitating what you have read from others....you're using 2nd and 3rd-hand sources. You need to study this issue if you want to be taken seriously.
Trillions did not go the banks way; the most they got were $45 billion and usually $25 BB or $10 BB. ALL PAID BACK....ALL EARNED A PROFIT FOR THE TREASURY.
Did I mention the politically-connected community banks LOST BILLIONS -- shhhhh.....you're not supposed to mention that, politically sensitive since the pols yelled about the Big Banks and Wall Street Banks (all paid back)...but not the smaller banks (HUGE LOSSES).
UAW and AFL-CIO ? $12 billion down the drain. Shhhh........not supposed to mention that.
I've reviewed HUNDREDS of TARP recipients. Trust me, what you read and what is reality are light-years away.
Goldfinger, you appear to be painting the banks as victims of the 2008 crisis. Did or did they not provide massive unjustified loans to unqualified home buyers and how big a part did this play in the bubble pop when housing prices declined? One could wrongly argue that it was a crash in housing prices that caused the 08 crisis. I would argue that banks were the cause of overinflated prices.
Banks enabled housewives and students to become overnight house flippers who fueled market prices beyond their fundamental value. FWIW we are now in the midst of a new breed of overnight house flippers, once again caught with their pants down (literally have one next door that was underwater the day it got listed). Add to that the housewives and students who this time around became day traders in the midst of easily available money (oops, there's that debt word again). It was debt (housing loans facilitated by banks) that brought the financial system to its knees. As we will soon see, we learned nothing from the mistakes made concerning debt and leverage. This time the easy money (more debt) turned housewives and students into stock day traders and crypto masters. This same easy money has turned financial institutions into derivative traders on a massive scale. The equity market, like the 2008 housing market will have its day of reckoning.
PS. I have not met JD from JPM and am not a banker groupie fooled into believing he is a banking messiah. I'm sure he is quite smart as you point out but fact remains he leads one of the most corrupt banking enterprises this nation has ever seen. The corruption is well documented by the Dept. of Justice who obviously views JPM as a revolving cash machine that spits out fines and penalties (the price of doing dirty business). Look for JD to become the next Treasury Secretary as JY's days are very numbered. I am convinced that at some point in history the mafia realized to go "legit" and that banking and finance were the direction they chose.
Give Me Liberty or Give Me Debt
.
They knew the stuff (MBS) was no good, so they put lipstick on the pig and put it at the top of the list of things to get rid of, and sold it off to unsuspecting "investors".
.
.
These labor unions do have a history of corruption. I have never been a fan of them. They are one reason that a lot of manufacturing jobs went to China. Their pension funds have been mismanaged and politicians have been bailing out those pension plans for votes. Who is responsible for that mismanagement ? The union leaders and the banks they dealt with.
All pension plans should be like a 401K - contribute what you can/want into it, you "own" it, and no unfunded promises for the future.
The 12 billion was fairly small in comparison to the rest of the "economic stimulus" undertaken in 2008. But still unfair, regardless.
.
Great examples of the weak becoming prey.
No one was ever forced to take out a mortgage. They made conscious, yet ill-formed decisions to take out mortgages based on their ignorance and emotions.
"I never would have smashed my finger if not for that hammer".
Knowledge is the enemy of fear
Victims ? No....but let's just say they weren't the perpetrators. The GSEs were 1st in line. These policies were mandated by HUD in 1997 thanks to Andrew "Our Nursing Homes Are Safe" Cuomo and then loosened by political appointees at Freddie Mac and Fannie Mae, each of which got political appointees with NO EXPERTISE or knowledge in finance.
It wasn't a crash in housing prices...it was a slight decline in median prices instead of a slight increase. At the margins, big changes occur.
Stocks are slightly over-valued if interest rates are at current levels. I am bearish on stocks but don't say they are like housing in 2007 or stocks in 1999-2000. Nowhere even close.
Retail participation is much lower than 2000. Meme and retail peacked in January 2021.
You have either preconceived biases and beliefs or like to read scandal sheets. Banking is heavily regulated and watched. I was docked 5% of my bonus years ago because a triplicate copy of some mumbo-jumbo bullbleep was not signed by me after I filled out the same form 3 times (I forgot to sign page 12 or 13 or something like that).
If banks were as corrupt as you state, I would think their stock prices would have done better than 5% a year for the last 20 years.
No, ALL the tranches were money-good.....IF....IF....housing prices went up 3-5% (very modest). Instead, we had a 20% drop in the median sales price. Unheard of.....the 1980's S&L Crisis led to only a 7% drop in median home prices.
The banks don't deal with them. You think Jimmy Hoffa sent $$$ to JP Morgan ? They engaged in self-dealing and helped themselves.
100% agree.
It was the biggest TARP loser.
https://bis.org/publ/otc_hy2211.pdf
And it is all true. I was around here in 2003 stating that the then $200 TRILL or so in otc derivatives would be a problem within a decade. Gold was $320 then. A projected price to help balance national debts and banking risks was $1200. And then later in 2010 upped to $1650....which all came to fruition within a decade. Derivatives did their worse blow up ever.
I don't run a hedge fund or determine others' portfolio's.....that's your job and Cohodk's. I just run my own "fund" and protect myself. To OPA's comment about the Riveria. I retired from the rat-race about 10 yrs ago in my 50's.
Your understanding of derivatives and bank risks seem to be on par with Liz Warren and what the main stream media consistently put out.....ie no risk there....no concern. We "beat" 2008-2009 and we'll do the same for 2023-20xx. Lehman Bros. went down because of their derivatives bets'....as did Bear Stearns and others. Not all of it publicized well for good reason......esp the actual payouts from the Central Banks, particularly the FED. It's all dark money anyways. Don't trifle the public or Congress with the details. The Interest Rate Swaps were never close to being tested in 2008. No one knows how they will be tested going forward. When one considers that little failures like LTCM and the Russian Currency Crisis in the later 1990's almost brought the world's financial system to its knees (before bailing them out) I wouldn't gloss over the potential affect of the 5X leverage the IRSwaps have over the MBS/CDS we saw fail system wide in 2008.
How many times can the system be "papered over" with created liquidity to save the day? In doing so US Sovereign debt from 2008 has gone from $10 TRILL to $31.5 TRILL (3X). Money Supply (M1) went from $1.4 TRILL to $19.6 TRILL (14X). If the system is showing cracks today, that's leftover from 2008 which was never properly addressed and fixed despite Dodd-Frank and other patches....most them since dismantled. At some point the papering over has to collapse under its own weight. Price of Gold is one of the warning signs. How does tracking all this influence my own money decisions? More PMs and less paper "stuff" to put in succinctly. Each person has to figure out their own numbers. Do stock owners want to go through another 2000-2011 or 1966-1982? Assuming that's what we're looking at through approx 2033. The markets are way overdue for another one of those 10 yr corrections. Wall Street Papering has kept it at bay though with many little crisis popping up all....the last one in 2019-2020.
After an 18 year under-performance of gold vs. stock market.....what's the next trend going to look like? How will $630 TRILL in derivatives, a $31.5 TRILL in national debt, and $20 TRILL in M1. For years it's always been a "thumbrule" that gold price eventually catches up to Sovereign Debt and M1. If it's catch up time where should one be weighted?
https://fred.stlouisfed.org/series/M1SL
See the above post....first paragraph. Oops. Go back through the threads and read about 2003-2011 again if you missed it.
Are you ready for a replay of that? My posts are generally long because the topics and supporting info is detailed. And for those who have no exposure or knowledge on the topic, it's a way to present them with the info. But then we have "short" posters who usually add nothing but bluster with their posts. They generally don't or can't present anything or support their own one word quips. They wouldn't even know where to start. Everything that was learned here on the Forum back in 2003-2011 seems to have been totally forgotten by many....who by the way....were wrong back then too. Dave Ramsey was an "influencer" around here back then. He and many others chuckled at PMs. He too was wrong on stocks and gold from 2003-2011. But, right from 2011-2020. Only the most recent trends are "remembered."
And quite comical that GoldFinger1969 points the entire 2008 banking crisis "finger" at Lehman Bros who happened to have 30-1 leverage......just like ALL the other TBTF banks at the time. You can't make this stuff up. What about BSC, WaMu, F&F Mac, Merrill Lynch, AIG, Indy Mac, MF Global, UBS, plus another 75 companies ? And the "official published accounting" of the dead bodies and payouts is not the "real" accounting. That will remain forever buried. And rather than point to leverage or Lehman as the "root cause".....how about the removal of the 1933 Glass Steagal in 2000 via the 2000 Commodity Futures Modernization Act. The law formally exempted over-the-counter derivatives trades between financial firms from routine regulation. Oops. It basically allowed all the previously regulated banks to become "betting banks." In other words uncontrolled 30-1 leverage. Apparently the lessons of LTCM in 1998, being guided by PhD economists and mathematicians fell on deaf ears. If I'm going to listen to an economist, it would be Martin Armstrong.
https://en.wikipedia.org/wiki/List_of_banks_acquired_or_bankrupted_during_the_Great_Recession
The govt and the other big banks and trading houses didn't want to help out Lehman....they hated them, their style, and wouldn't lift a finger. They would have been relatively easy to bail out or assume in retrospect. The irony here is that on average the entire industry of otc derivatives (currency swaps, commodity swaps, interest rate swaps, real estate and credit default swaps) at the time was leveraged around that same 30-1 range. It still is today. So if leverage was the bogey man back then.....it still is today. It might be a lot less risky in the MBS/CDS swaps today because those already failed once and things were changed. That's NOT the case for the interest rate swaps which are still the big money maker for the TBTF banks. Whatever the CB's papered over in 2008.....5X that amount will be needed with IR Swaps starting blowing up regularly as interest rates stay here or just go higher.
They call it the "dismal" science for a reason. One of the dismal parts is that it's full of inaccuracies. It's about as much a science as the Federal Reserve is "Federal" and a "Reserve." I look at economics as a way to construct a system to support what the world's govt's and banking entities want....and to support those theories and goals. Maybe a course in shadow economics and banking 103 would be more useful for J6P to understand why Economics 101/102 never quite works as advertised. One only has to look at the track record of the govt and FED economists.