Global financial system implosion begins

[mauvais]

Crisis? What crisis?

The FTSE ended the week in better shape than it started

 

[ska invita]

Crisis? What crisis?

The FTSE ended the week in better shape than it started

Good time to sell it all then!

 

[gawkrodger]

Don’t blame China for these global economic jitters | Ha-Joon Chang

 

[mauvais]

Good time to sell it all then!

So many keep saying. It doesn't feel quite like a crash yet though, just the sticky mire of volatility. Noone's gone unexpectedly bust for a start, yet. It might turn out that the past week was a good time to buy, but I wouldn't say it with any confidence.

 

[hipipol]

with oil in sub $30 territory, fret ye not about fracking
Oil price fall blamed for sharp rise in UK firms folding - BBC News
Fracking Firms That Drove Oil Boom Struggle to Survive
Better still, Global rig count data
Baker Hughes Rig Count Data | BakerHughes.com

Oil may have perked up to $32 WT Light and Sweet but that's before Uran is back in the market and if the Libyans can get a grip, suspect 25-27 is a likely level

 

[yield]

Japan joins negative rates club
FT. 29/01/16

The Bank of Japan has cut interest rates to minus 0.1 per cent, stunning analysts and sparking a surge in equity and bond markets, as policymakers around the world respond to mounting worries about the outlook in China and the risks of a global slowdown.

The BoJ’s move forms part of a trend that has emerged in recent weeks, with many of the world’s major central banks signalling that they stand ready to counter the slowdown in emerging markets and slumping oil prices. These hints have helped shore up equity markets that began the year with sharp falls.

Even the world’s more resilient economies are showing ill effects from sluggish global demand with gross domestic product growth in the US slowing sharply in the fourth quarter to an annualised rate of just 0.7 per cent as tumbling oil prices and sagging exports held back the recovery.

What next?

 

[Wolveryeti]

Interesting link: https://www.google.co.uk/url?sa=t&s...ggjMAI&usg=AFQjCNFuYHAX_a8VLFDBctxVBM6z2VAbHg...

Dat chart...

 

[Dandred]

The globalist left who aim at destroying the nation-state through mass immigration and multiculturalism... and the globalist capitalist right who's determined to bring cheap labor into the West to drive down wages can only blame themselves and their policies for disrupting Europe's social cohesion. Now there no longer is a left and a right. There are nationalists who want sovereignty and to preserve their indigenous cultures, identities, and demographic compositions and there are globalists.

 

[ItWillNeverWork]

The globalist left who aim at destroying the nation-state through mass immigration and multiculturalism... and the globalist capitalist right who's determined to bring cheap labor into the West to drive down wages can only blame themselves and their policies for disrupting Europe's social cohesion. Now there no longer is a left and a right. There are nationalists who want sovereignty and to preserve their indigenous cultures, identities, and demographic compositions and there are globalists.

Don't be a numpty.

 

[Bernie Gunther]

The globalist left who aim at destroying the nation-state through mass immigration and multiculturalism... and the globalist capitalist right who's determined to bring cheap labor into the West to drive down wages can only blame themselves and their policies for disrupting Europe's social cohesion. Now there no longer is a left and a right. There are nationalists who want sovereignty and to preserve their indigenous cultures, identities, and demographic compositions and there are globalists.

'White Genocide' thread is => that way

 

[teqniq]

Oh rly?

 

[yield]

Oh rly?

Goldman also notes that the market has rewarded companies that have undertaken mergers and share buybacks, compared to companies that have invested internally, further bolstering margins.

"We are always wary of guiding for mean reversion. But, if we are wrong and high margins manage to endure for the next few years (particularly when global demand growth is below trend), there are broader questions to be asked about the efficacy of capitalism."

Maddening.

 

[gosub]

[/QUOTE]

Maddening.

So what you want, Goldman, is some sort of pet politician to eliminate boom and bust.

 

[yield]

So what you want, Goldman, is some sort of pet politician to eliminate boom and bust.

Yes. Obviously.

 

[gosub]

Yes. Obviously.

can't see one of them ever winning an election

 

[Idris2002]

So what you want, Goldman, is some sort of pet politician to eliminate boom and bust. [/QUOTE]
One who likes to ride horses, perhaps.

 

[gosub]

So just watched the big short. Vgood though could have included why it was AAA (only thing pensions could buy) At the end captions CDOs (junk debt) back on the market ... and then I think to the posts today about Goldmans , and earlier this month about zombie assets.... The banks are sitting on a load of junk loans they can't unload or hedge. And they can't afford the market correction of an economic cycle.. That's why no more boom and bust is back.

 

[teqniq]

It's a great film, I really enjoyed it.

 

[J Ed]

.

 

[gosub]

It's a great film, I really enjoyed it.

Needed making and left me angry (supposed to) Didn't see why the protagonists can't feel good about themselves took on a rigged casino endured and came out ahead. Fair play



There's a documentary on Fanny mae/Mac Also very good I remember watching in Edinburgh the night before a Scotland Ireland international, the whole Ireland team made up half the audience this is why our country is fucked type viewing.

I suspect people who read threads like this go to see films like the big short.. It needs to wider audience it's accessible

 

[yield]

Needed making and left me angry (supposed to) Didn't see why the protagonists can't feel good about themselves took on a rigged casino endured and came out ahead. Fair play

Debunking “The Big Short”: How Michael Lewis Turned the Real Villains of the Crisis into Heros
Nakedcapitalism. December 13, 2015

Lewis’ desire to satisfy his fan base’s craving for good guys led him to miss the most important story of our age: how a small number of operators used a nexus of astonishing leverage and camouflaged risk to bring the world financial system to its knees and miraculously walked away with their winnings. These players are not the ugly ducklings of Lewis’ fairy tale; they are merely ugly. Whether for his own profit or by accident, Lewis has denied the public the truth.

 

[teqniq]

All well and good but if the system wasn't corrupt in the first place perhaps none of it might have happened.

 

[gosub]

Debunking “The Big Short”: How Michael Lewis Turned the Real Villains of the Crisis into Heros
Nakedcapitalism. December 13, 2015

Hmmm the lower than AAA ended up packeage with the AAA, because there wasn't enough AAA to go round. There were a lot of cynics at the beginning some bet against, some stayed out -they all got burned or sucked in coz it didn't pop and they had match the returns those playing nicely were getting . Our protagonists in this film didn't invent the system, didn't turn a blind eye to fraudulent loans so they'd have product to sell, got stuck with increasingly higher fees from market manipulation to stop it showing up that they were right, got stuck on hold whilst the banks cleared their exposure to even bigger patsies. " they are merely ugly" True , presumably why the film isn't too lionising about them but "the real villans" not by a long chalk.

 

[J Ed]

Debt, defaults, and devaluations: why this market crash is like nothing we've seen before

 

[yield]

Why it would be wise to prepare for the next recession
It is crucial to recognise that something more unconventional might have to be done
FT. February 4, 2016 Martin Wolf

What might central banks do if the next recession hit while interest rates were still far below pre-2008 levels? As a paper from the London-based Resolution Foundation argues, this is highly likely. Central banks need to be prepared for this eventuality. The most important part of such preparation is to convince the public that they know what to do.

Today, eight-and-a-half years after the first signs of the financial crisis, the highest short-term intervention rate applied by the Federal Reserve, the European Central Bank, the Bank of Japan or the Bank of England is the latter’s half a per cent, which has been in effect since March 2009 and with no rise in sight. The ECB and the BoJ are even using negative rates, the latter after more than 20 years of short-term rates of 0.5 per cent, or less. The plight of the UK might not be that dire. Nevertheless, the latest market expectations imply a base rate of roughly 1.6 per cent in 2021 and around 2.5 per cent in 2025 — less than half as high as in 2007.

What are the chances of a significant recession in the UK before 2025? Very high indeed. The same surely applies to the US, eurozone and Japan. Indeed, the imbalances within the Chinese economy, plus difficulties in many emerging economies, make this a risk now. The high-income economies are likely to hit a recession with much less room for conventional monetary loosening than before previous recessions.

What would then be the options?

One would be to do nothing. Many would call for the cleansing depression they believe the world needs. Personally, I find this idea crazy, given the damage it would do to the social fabric.

A second possibility would be to change targets, possibly to ones for growth or level of nominal gross domestic product or to a higher inflation rate. It would probably have been wise to have had a higher inflation target. But changing it when central banks are unable to deliver today’s lower target might destabilise expectations without improving outcomes. Moreover, without effective instruments a more ambitious target might just seem empty bombast. So the third possibility is either to change instruments or to use the existing ones more powerfully.

One instrument, not much discussed, would be to organise the deleveraging of economies. This might need forced conversion of debt into equity. But, while desirable in extreme circumstances, this would be practically difficult.

Another would be a still bigger scale of quantitative easing. At the end of the third quarter of last year, the BoJ’s balance sheet was 70 per cent of GDP, against less than 30 per cent for the Fed, the ECB and the BoE. The latter three could follow the former. Moreover, the assets they buy could be broadened, one possibility being foreign-currency bonds. But that would be provocative and unnecessary. The BoJ and ECB have engineered big currency depreciation without making it quite so blatant.

Yet another instrument is negative interest rates, now used by the ECB, the BoJ and the central banks of Denmark, Sweden and Switzerland. With clever gimmicks, it is possible to impose negative rates on bank reserves at the margin, thereby generating negative interest rates in markets, without imposing negative rates on depositors. How far this can be pushed while cash is still an alternative is unclear. Beyond a certain point, people seek to move into cash-backed warehouse receipts, unless a penal tax were imposed on withdrawal from banks or cash were abolished altogether. Moreover, it is unclear how economically effective negative rates would be, apart from lowering the currency.

A final instrument is “helicopter money” — permanent monetary emission for the purpose of promoting purchases of goods and services either by the government or by households. From a monetary point of view, this is the equivalent of intentionally permanent QE. Of course, actual QE might become permanent after the event: that is now likely in Japan. Again, supposedly permanent monetary emission might turn out to have been temporary, after the event. But if the money went directly into additional spending by government or into lower taxes or to people’s bank accounts, it would surely have an effect. The crucial point is to leave control over the quantity to be emitted to central banks as part of their monetary remit.

Personally, I would prefer the last instrument. But at this stage it is crucial to recognise the great likelihood that something even more unconventional might have to be done next time. So prepare the ground beforehand. Central banks should be filling in these blanks now, not after the next recession hits.

Martin Wolf has come out in favour of "helicopter money" to stimulate demand.

 

[ska invita]

No amount of "something should be done" articles will make a difference...the system is a careering juggernaut with a bunch of drivers who refuse to use the brakes or turn the steering wheel or go down a different road - no amount of back seat driving will change their course... As if 2008 wasnt enough of a warning... really depresses and frightens me

 

[J Ed]

 

[ska invita]

i look forward to the What Were We Thinking? apology advert at next years super bowl.

 

[gosub]

Share traders dressed in a carnival costumes work a their desks ar the stock exchange on Shrove Tuesday in Frankfurt


Might explain DeutscheBank

 

[teqniq]

FTSE 100 hits 3-year low amid heightened fears of new global recession