The looming bank collapse -Thoughts?

[ramonesfreak]

I already know Tab's response

https://www.theatlantic.com/magazine/archive/2020/07/coronavirus-banks-collapse/612247/

[tabs]

Since March i have said the same thing over and over again! A Quasi Nationalized Zombie Subsistence Economy. End of story. Elan Musk maybe worth a Trillion, but it is still confetti. They have robbed him as well as everybody else. As the FED does not care about individuals nor particular institutions but the survival of the economy. In that economy the Banks are essential to provide the cash flow which is the life blood of the economy. They will keep the banks open even if they are Zombies.If the FED is concerned about Equities that concern is about the survival of PENSION FUNDS...So lets get clear here..

What most people do not get is that: Science and Technology and it's application and implementation REQUIRES that the economy and society FUNCTIONS AT A HIGH LEVEL. If an economy crashes and burns society will tend towards fragmentation and chaos. With that economic collapse society can not continue to function at a high level. SOCIETY WILL REGRESS towards the mean of human history. The result of which is that particular Civilization becomes at risk of collapse. resulting in what can be termed as a NEW DARK AGE.

Western Civilization has been hegemonic globally since about 1500 AD. Where the USA has become the leading proponent of that system. The basis of it's success has been it's Secular rationality in using science, technology and organizational ability. The Western model has now reached it's extremis as it is now requiring a nearly daily fix of liquidity to keep the system afloat. Sooner or later the system will exhaust it's ability to provide life support.


BTW..This was not written for this Board...and is already out to 4 other places including CNBC before it was posted here.

[ramonesfreak]

i knew you would say that

i dont disagree with you

[sammyg2]

'scuse my ignorance, but how does one go about shorting CLOs

[tabs]

Originally Posted by ramonesfreak

i knew you would say that

i dont disagree with you

I posted it back in 2010 where NOstatus told me to take a Chill Pill..so you should know by now. .

[tabs]

BTW the skies will still be blue...and probably cleaner too.

When I was a kid way back in the 60's I envisioned a world that would be much Greener (with a great deal of forests) where the worlds population would be reduced dramatically. One in which people would work from home in Cottage like industries. Electric Power would be produced by Bio Luminescence..

The Secular rat race for the acquisition of material wealth would be supplanted by one where human values would take precedence. This would come as repudiation after the failure of secular conspicuous consumption

[kach22i]

From the opening article in the Atlantic

FRANK PARTNOY is a law professor at UC Berkeley.

I wonder if Frank is prone to being an alarmists or a realist.

I think he is correct that failure this time will require an overhaul of our complex banking system into something more simple.

Perhaps something principled?

https://en.m.wikipedia.org/wiki/Islamic_banking_and_finance

[tabs]

Originally Posted by sammyg2

'scuse my ignorance, but how does one go about shorting CLOs

I wish I had been a bit more astute back in 06-08...you might say I was asleep as in not paying attention.

I did know that the RE bubble was going to deflate..having been around that block several times in CA. I was talking to my older friend Jack about it...as in how high can it go befoe? I did warn Motion to get the fk out... which he did..where he unload some homes..

I never imagined RE would literally crash and burn to the extent that it did though..

I was watching Equities where Mother was the watchdog I relied upon. She did mention in late 07 that the banks were leveraged 30 times..I didn't catch it..and put 2 and 2 together..

I knew immediately when GW came on TV it was game over...I became WOKE..


Out of all the banks Wells Fargo which is CA based and had seen RE crashes before got burned the least. Chase with Dimon was reducing exposure to the Sub prime RE market and faired better than their competitors..

The rest believed their own hype. Where they RECKLESSLY ASSUMED TO MUCH RISK. As the downside to that risk was an abstraction since they had never had the experience of the real consequences of assuming too much risk...it was a matter of well it can happen but it probably won't.



The problem since has been since the FED and Treasury has saved them from themselves is the belief that the Crisis was just another Garden Variety crash.. That if we just apply the right fix we will be back to biz as usual...

I have been warning since 08 that the Crisis Crash was and is a GAME CHANGER>..that it was just a matter of time before the storm would be revisited.


The Squirrels are still at it...Corporation are leveraging themselves up to the hilt with cheap money..essentially taking out all the equity from the corporation...Apple is one of them..While the FED is providing a vertible sea of liquidity that drives their stock price ever upwards.

The whole Global Economy is nothing but a shell...there is nothing left..all the value has been consumed. That is why I say it doesn't matter anymore...rich man poor man you all have been robbed...

Where the FED is the one left in the unenviable position of having to put their fingers in the dike. The dummies do not realize that they have put the gun to their heads and have pulled the trigger..the bullet is now traveling down the barrel.

[tabs]

Originally Posted by kach22i

From the opening article in the Atlantic


I wonder if Frank is prone to being an alarmists or a realist.

I think he is correct that failure this time will require an overhaul of our complex banking system into something more simple.

Perhaps something principled?

https://en.m.wikipedia.org/wiki/Islamic_banking_and_finance

Nothing I say phases you does it? Which means you are not capable of abstracting and extrapolating situations out to their rational conclusions. You have no vision and are myopic stuck in the box of what is merely in your circle of day to day reality..It is inconceivable to you that youe life can change on a dime. You are stuck as most people are...unaware as in you are NOT WOKE..

[jyl]

Most credit risk has moved to non-bank entities. Banks are awash with cash, and the pile is growing as they have little need to lend.

[tabs]

Originally Posted by jyl

Most credit risk has moved to non-bank entities. Banks are awash with cash, and the pile is growing as they have little need to lend.

Didn't I just say that..Corporations are leveraging themselves up...any down turn in the economy and sales and voila.

Cash means nothing on the Balance sheet if it is leveraged against... Equity price means nothing if the balance sheet is net zero or negative...so long as cash flow can service debt the game is on..the moment it stops...Equity pricing implodes as the corporation is nothing but an empty shell.

All it will probably take is for a big pillar of the Equity markets to default on a bond payment... then the smart money will run for the door...as they know that there is nothing left except the hollow shell of the corp.

The Global Economy is BK..


The FED is in there buying all kinds of corp debt..to provide the corp with liquidity to fund their operations..as sales have went to he11 with the cv...

In the end it is called QUASI NATIONALIZATION..the FED is part owner of Zombie corps...and the p[people are getting their subsistence checks so that they can survive..pay the bills as best they can.

[tabs]

What you have to look at is that ANY MAIN STREAM ASSET CLASS is going to be worthless...or so depressed and ill liquid as to be valueless.

Gold, Silver have largely been demonetized and as 5000 years of human history indicate it will come back into vogue as it is a real tangible hard asset...there are other hard assets that basically are not considered to be conventional assets that will do as well in melt down.

[tabs]

Quiet frankly I do not want to think about this anymore..I want to enjoy what time I have left..

I have a nice Pork Roast to put on the BGE

[RWebb]

Originally Posted by jyl

Most credit risk has moved to non-bank entities. Banks are awash with cash, and the pile is growing as they have little need to lend.

SSHHH!!! you are killing tabsy's monolog

[RANDY P]

Large Banks thanks to Coronavirus are required to report status of liquidity thru several reports- Daily.

I'm stuck working on projects to automate all of it- Coronavirus pushed up requirements to get reporting in place from next year to like, last April. Feds R watching and screaming.

rjp

[Iciclehead]

Originally Posted by tabs

Quiet frankly I do not want to think about this anymore..I want to enjoy what time I have left..

I have a nice Pork Roast to put on the BGE

Amen to that.

As we have discussed, I am now into what actions enhance my own situation as opposed to anything else....

I truly hope to pass on before the SHTF....


Dennis

[Purrybonker]

Originally Posted by tabs

Quiet frankly I do not want to think about this anymore..I want to enjoy what time I have left..

I have a nice Pork Roast to put on the BGE

Oh yee of the neo-permabears. Capitalism does indeed seem to have found it's ultimate incarnation. Wallowing in it's own lever pulling, derivative fueled madness. Nothing is simple anymore - make a good product, employ hard working people, at least since the 60's. Then 2008-09 blew the doors off.

The capitalists, the investment bankers that don't know how to shine a pair of shoes but can expertly rate the performance of each and every shoe manufacturer on the planet (analogy that). And the whole financial markets driven by that guidance - equity and debt raters both hold sway.

Fk covid, we are still riffing off of 2008 and have learnt nothing.

But, no need for tears just yet. We boomers should not show our age and throw hissy fits just because we've entered a new norm that doesn't seem to fit our understanding.

[berettafan]

Originally Posted by Purrybonker

The capitalists, the investment bankers that don't know how to shine a pair of shoes but can expertly rate the performance of each and every shoe manufacturer on the planet (analogy that). And the whole financial markets driven by that guidance - equity and debt raters both hold sway.
.

If Wall Street and the financial press actually did this it would be great. What they are doing is teaching us to play short term reactions to news both related and unrelated. So much of the talking we hear has absolutely nothing to do with the actual company but rather a guess of if institutional investors will be in or out on this particular day.

[tabs]

Originally Posted by Purrybonker

Oh yee of the neo-permabears. Capitalism does indeed seem to have found it's ultimate incarnation. Wallowing in it's own lever pulling, derivative fueled madness. Nothing is simple anymore - make a good product, employ hard working people, at least since the 60's. Then 2008-09 blew the doors off.

The capitalists, the investment bankers that don't know how to shine a pair of shoes but can expertly rate the performance of each and every shoe manufacturer on the planet (analogy that). And the whole financial markets driven by that guidance - equity and debt raters both hold sway.

Fk covid, we are still riffing off of 2008 and have learnt nothing.

But, no need for tears just yet. We boomers should not show our age and throw hissy fits just because we've entered a new norm that doesn't seem to fit our understanding.

We have been on life support provided by the FED since 08.

[tabs]

Back in the scary times I really couldn't sleep so I started tuning into the early CNBC show...one morning they invited people to email them. So I did, mentioning President Bruce Ismay of the White Star Line who was on the maiden voyage of the Titanic and much to his everlasting guilt survived Five minutes later the host of the show said, "I didn't know that some of our audience are smart enough to know who Bruce Ismay was." Imagine my surprise at the coincidence that someone else would mention Bruce Ismay in an email at the time time as I did. After that here was a whole string of coincidences where guests on the show were thinking and saying exactly the same things that I had just wrote to them about.

Come to think about it the same kind of coincidence was happening with my emails to CR...Another amazing coincidence was when I heard stuff being said on FAUX that I had just written about..For instance like Geraldo Rivera saying tha Ted Cruz was like the character Cassius in the play Julius Caesar 2 days after I posted that very same thought on this Board.. I mean it has to be some kind of zeitgeist in the air kinda thing...