Global financial system implosion begins

[Barking_Mad]

Buying tinned goods seems so stupid, but if I dont and the shit hits the fan there will be this happening (especially after 50 years of reading this thread!):

 

[mauvais]

Damian McBride ‏@DPMcBride 1h1 hour ago
.@thomasdolphin $14 trillion alone in junk bonds for energy exploration (shale!) and emerging market investments. All looking worthless.

Is he drunk? China hasn't completely ceased to exist, AFAIK. Devalued, probably, worthless, not yet. Shale on the other hand can be rendered worthless more easily.

Meanwhile, a Citi set of metrics that you may or may not be able to see:

 

[ViolentPanda]

You're looking at it as if it were a simple supply and demand fruit market style model for tangible physical commodity. It's not. I don't want to try and explain the global economy in a post, not least because I'm clueless, but for a start it's inherently a large part sentiment and expectation, otherwise you would never buy anything other than a stake that gave you meaningful executive control over some entity. Then there's the complex relationship between market value and survivability; e.g. you may well need interest in your share to fund raise otherwise you run out of working capital and it all starts to unravel. Throw leverage and debt into that, as well as international economic relationships, and it's a frightening nightmare.

As my O level commerce taught me back when dragons roamed the earth, the global economy under capitalism is basically just a forum for a very "red in tooth and claw" bookie operation. Yep. Back then, educators actually got away with disparaging the more outre effects of capitalism.

 

[gosub]

http://www.telegraph.co.uk/finance/...-landlords-wake-up-to-Osbornes-150pc-tax.html

Not sure how I feel about this, but it is going to have an impact

 

[yield]

Buying tinned goods seems so stupid, but if I dont and the shit hits the fan there will be this happening (especially after 50 years of reading this thread!)

Stock up on canned food after stock market crash, warns Gordon Brown's former adviser
Mirror 24 August 2015
Don't think we're quite in Mad Max territory yet.

http://www.telegraph.co.uk/finance/...-landlords-wake-up-to-Osbornes-150pc-tax.html

Not sure how I feel about this, but it is going to have an impact

George bottled it. He should've kept the bank levy. The too big to fail guarantee and access to the eurodollar market was too lucrative for HSBC and others to leave.

 

[yield]

The Last Great Bubble may finally be starting to pop
Aug 21, 2015

The illusion of stock-market stability is fading, and the Last Great Bubble — faith in central banks — may be starting to pop.

So quantitative easing was a failure. Protected and increased the assets of the 1% but didn't produce the 2-4% inflation they expected.

Who'd've guessed that trickle down economics was lie.

What next? QE4 or is it 5? QE infinity. Can't cut interests rates that are nearly zero. Just pulling on a string.

HSBC fears world recession with no lifeboats left
24 May 2015

Stephen King from HSBC warns that the global authorities have alarmingly few tools to combat the next crunch, given that interest rates are already zero across most of the developed world, debts levels are at or near record highs, and there is little scope for fiscal stimulus.

 

[taffboy gwyrdd]

Biggest fall on the New York Stock Exchange since 2009 today.

So, with nothing of substance done to change the fundamental (and criminal) habits of the global finance elite, a new blag will be needed. I expect it will go with a diversionary thing with racist undertones. "Oh....the Chinese...." as if it's all to do with a nation, not an ideology.

Let know one be fooled. China is capitalist. This is a capitliast screw-up, capitalists are culpable. And they will want us to pay. Just like last time.

 

[not-bono-ever]

I was going to open a discussion about the realisation that Capitalism not being a zero sum game. But Pickmans and Butchers would just come in and give me a hard time.or soemthing

 

[yield]

I was going to open a discussion about the realisation that Capitalism not being a zero sum game. But Pickmans and Butchers would just come in and give me a hard time.or soemthing

A rising tide lifts all boats and all that. butchersapron hasn't been around for ages. Probably disgusted by all the support for the Labour party

 

[yield]

It's time to lay siege to the robber barons of high finance
24 August 2015

But how do we distinguish rent extraction from high profits due to legitimate business success? A good indicator is the extent to which their profits seem to be dependent on political and official connections.

The American financial sector has spent $6.6bn (£4.2bn) since 1998 lobbying US politicians, according to researchers. It seems unlikely they would spend such sums for no reason. Our own ministers also seem to have an open door for the UK financial lobby.

Thought this was interesting. Regulatory capture.

As if people didn't know.

 

[gosub]

George bottled it. He should've kept the bank levy. The too big to fail guarantee and access to the eurodollar market was too lucrative for HSBC and others to leave.

Not sure thats relevant. I'm not sure what to make of it cos, presumably is designed to cause a release of rental housing stock (and presumably reduce every higher spiraling house prices (which in itself impacts on global scale as a safe bet 'investment') but is just as likely to cause massive rent increases as the buytoletters pass the cost on)

 

[J Ed]

So another day of it then

 

[Fez909]

Not sure thats relevant. I'm not sure what to make of it cos, presumably is designed to cause a release of rental housing stock (and presumably reduce every higher spiraling house prices (which in itself impacts on global scale as a safe bet 'investment') but is just as likely to cause massive rent increases as the buytoletters pass the cost on)

Won't increased rents just mean increased income and therefore increased tax? If they're really getting taxed 100% of their income (which I don't believe, but didn't read/grok the article fully), then rent raises are pointless.

 

[mauvais]

So a couple of articles today:

http://ftalphaville.ft.com/2015/08/25/2138426/china-so-what-now/ - worth reading beyond my selective quotes:

Probably the soundest move for the government at this point would be to step back and allow defaults to occur and bankruptcies to move forward, because that is the only way that the financial system could truly liberalize and rebalance.

...

The second, and most likely, scenario for the government is more stimulus. This year has seen extravagant announcements for new stimulus programs from the “international cities” plan to create three huge megalopolises around Beijing, Xian, and Shenzhen, to the One Belt One Road program that would use Chinese capital to promote foreign demand for Chinese building materials, engineering services, and infrastructure. ... To date, little progress has been made on either plan, and it seems that this is as good an indication as any that China’s debt limit has really been reached.

...

Credit is still the preferred tool, and that demonstrates a poorly understood dimension of the Chinese system, that the central government really has very limited tools of governance, the two principal ones being deployment of capital into the economy and, in society, repressive force.

and elsewhere: http://streetwiseprofessor.com/?p=9530

Days like today, and market movements like today (with big gaps) have occurred before anyone even thought of algos, before markets were computerized, and before Mark Cuban was born. Days like today occurred when prices were recorded on blackboards in chalk. Days like today occurred when the closest thing to HFT was the telegraph and the stock ticker. Regardless of the technology, markets do things like they did today.

Everybody should just give it a rest. Days like today happen with some regularity. No reason to panic. Indeed, it should be a source of some comfort that the impetus for the selloff was events in China, rather than (as in 2008) the impending implosion of the US banking sector.

And do yourself a favor. Turn off the TV, and just look at Twitter so that you can mock the likes of Trump and Sanders. The signal-to-noise ratio is asymptotically approaching zero. When you really need to panic, you’ll know.

 

[not-bono-ever]

It all depends on how much they are leveraged.this mostly affects mortgage interest tax relief for landlords/ btl with significant borrowings . If the landlord owns outright with no hidden debts ,it will make no difference iirc

Eta.this is a tax on the uppity vulgar types. Real money is not affected as they have no obligation to have to do something as crass as borrowing money for rental property.

 

[gosub]

It all depends on how much they are leveraged.this mostly affects mortgage interest tax relief for landlords/ btl with significant borrowings . If the landlord owns outright with no hidden debts ,it will make no difference iirc

Eta.this is a tax on the uppity vulgar types. Real money is not affected as they have no obligation to have to do something as crass as borrowing money for rental property.

Correct. but landlords without mortgages aren't going to keep rents static if the ones with raise their prices. They will just be in are safer position to deal with rent strikes.

 

[not-bono-ever]

interest rates cut by 25 bp in china

 

[frogwoman]

The stock markets have recovered i think. Why tho? The central bank of china doesnt have a clue what its doing

 

[frogwoman]

http://www.theguardian.com/business...-lose-heart-stocks-plunge-again-market-crisis

Interesting piece here

 

[Pickman's model]

Months? More like hours...

I'm a city lawyer and every major partner that I know of in the firms that matter have been called in to work the weekend.

Redonimation is imminent.

redonimation?

 

[two sheds]

It's a big word, it sounds impressive, what's wrong with that?

 

[gosub]

It's a big word, it sounds impressive, what's wrong with that?

its spelt wrong, giving Pickman's the chance to pull up the post, where the prediction didn't happen.

 

[Diamond]

redonimation?

That post is roughly three years old - slow day Pickman's...?

 

[Pickman's model]

That post is roughly three years old - slow day Pickman's...?

rereading this auld thread ... so you don't know what you meant either then.

 

[not-bono-ever]

redonimation?

redonimation?

when does this shit date from?

aha.now I see

 

[Diamond]

You've got to give the man credit though - it takes a lot of very hard, scholarly research sifting through post after post to make such a cutting point...

In truth, I do like the idea that all Pickman's does with his life is trawl ancient posts on urban.

 

[gosub]

rereading this auld thread ... so you don't know what you meant either then.

It was from 2012 back in the days when the Greek economy was fucked (remember those days?) and there was speculation that Greece would leave the EUro. Obviously, since things have changed we are all older and wiser now.

 

[Pickman's model]

It was from 2012 back in the days when the Greek economy was fucked (remember those days?) and there was speculation that Greece would leave the EUro. Obviously, since things have changed we are all older and wiser now.

so redonimation is grexit. got it.

 

[Pickman's model]

You've got to give the man credit though - it takes a lot of very hard, scholarly research sifting through post after post to make such a cutting point...

In truth, I do like the idea that all Pickman's does with his life is trawl ancient posts on urban.

what cutting point? you said something i didn't understand and i asked you to elaborate. to be blunt it wasn't cutting.

 

[gosub]

so redonimation is grexit. got it.

That would be redenomination. Maybe the invented word redonimation means being asset stripped of everything including democracy just so you can keep trading the same bits of paper. We need a word for that.