Global financial system implosion begins

[bimble]

those survivalist wankbags who near the start of this century predicted that by now Peak Oil would have us living in a post-apocalyptic dystopia populated by steely-eyed sociopaths who would slit your gizzards for a dribble of muddy water.

It's confusing that this just made me laugh so that tea came out.
One the leading proponents of that idea was this man, who was a neighbour and beloved friend years ago. In his defence he did have a sort of plan, which tuned into a 700 page posthumously published book on how we might survive. And yet I think your post is spot on.

 

[yield]

Why Corporate America’s Debt Is a ‘Major Risk’
October 21, 2016

Are investors in denial about how dim the outlook is for American businesses?

That’s the question Société Générale’s Andrew Lapthorne, global head of quantitative strategy, posed to his bank’s clients.

“Asset valuations are extreme; returns are poor, the probability of losses is high and the ability to recover any losses quickly is low,” he writes.

In particular, the strategist sounded an alarm over the state of corporate America’s balance sheet. Company spending exceeds cash flow by a near-record amount—a fundamentally unsustainable situation—as net debt continues to increase at a rapid pace.

In many cases, companies have used debt to repurchase their own stock, flattering their bottom-line financial performance. While not all buybacks are financed by debt, Lapthorne did note a correlation between net repurchases and the change in corporate indebtedness.

“Asset valuations are extreme; returns are poor, the probability of losses is high and the ability to recover any losses quickly is low,”
Property bubbles, debt bubbles, global trade is declining & stock markets are at all time highs. Nothing to see here.

 

[J Ed]

Brexit: leading banks set to pull out of UK early next year

Britain’s biggest banks are preparing to relocate out of the UK in the first few months of 2017 amid growing fears over the impending Brexit negotiations, while smaller banks are making plans to get out before Christmas.

At least we won't have to bail the fuckers out again.

 

[magneze]

Brexit: leading banks set to pull out of UK early next year



At least we won't have to bail the fuckers out again.

 

[ska invita]

At least we won't have to bail the fuckers out again.

supposedly the banks that are threatening to leave aren't ones that got bailed -i.e. foreign banks. we only bailed our own national banks didn't we? Dont worry, we can still keep bailing RBS!

it does read like a broadside bit of fearmongering from a man repping the banks...we'll see what happens i guess. i very much doubt anyone will leave "before xmas" or in the 1q of 2017. Seems very premature.

If it does happen though the danger is a quick withdrawal of these banks would leave a massive tax black hole...more cuts anyone?

 

[ItWillNeverWork]

supposedly the banks that are threatening to leave aren't ones that got bailed -i.e. foreign banks. we only bailed our own national banks didn't we? Dont worry, we can still keep bailing RBS!

it does read like a broadside bit of fearmongering from a man repping the banks...we'll see what happens i guess. i very much doubt anyone will leave "before xmas" or in the 1q of 2017. Seems very premature.

If it does happen though the danger is a quick withdrawal of these banks would leave a massive tax black hole...more cuts anyone?

It's like trying to escape an abusive partner. The banks have beaten the shit out of us for years, and threaten to do so even more if we kick them out on their arses. I say fuck em. The long-run interests of society require that we are less dependent on 'The City'.

 

[bimble]

Yeah, cos soon as those nasty bankers leave and shut the door behind them by some mysterious process manufacturing will rise again all over the land. It'll be great.
And we won't miss that piddling 12% or so of total tax revenues that come from the financial services industry, we'll be so busy exporting biscuits.

 

[mauvais]

They planned (and indeed had in motion) to sell off the remaining stake in the banks we do own but it was scuppered by Brexit - amongst other financial hits - and unacceptably low yield. I'm not sure those stakes will really be enough to prevent significant moves abroad though.

And I'm all for diversification away from toxic financial services, but there is little else in the UK at the moment - what there is like car manufacturing is equally susceptible to flight - and a grim recession is hardly the time to make it happen, so it's something of a pyhrric victory. A bit like Brexit itself then.

 

[ItWillNeverWork]

Yeah, cos soon as those nasty bankers leave and shut the door behind them by some mysterious process manufacturing will rise again all over the land. It'll be great.

Nothing mysterious about it. If the option to push pieces of paper around and magic up money from nowhere disappears, then those that want to make money will have to actually start producing things of value. Nothing that was ever worth doing was easy. There are no shortcuts to riches, as 2008 clearly demonstrated.

And we won't miss that piddling 12% or so of total tax revenues that come from the financial services industry, we'll be so busy exporting biscuits.

I obviously have more faith in the people of this country than you do. Do you work in banking, by any chance?

 

[bimble]

I'm so unpatriotic, shame on me.
No I am not a banker. If I was though, I'd probably be more likely to move to Paris or New York and carry on being a banker than I would be to open a factory.

 

[ItWillNeverWork]

I'm so unpatriotic, shame on me.
No I am not a banker.

Just a whiner then. Nothing about patriotism, just faith in human beings - your friends, your family, your neighbours.

 

[bimble]

Faith will see us through, in absence of any sort of plan. Faith in my friends family and neighbours to do what though?

 

[bi0boy]

Faith will see us through, in absence of any sort of plan. Faith in my friends family and neighbours to do what though?

My neighbour's five-year old had a stall on the pavement the other day selling broken toys.

 

[mauvais]

Nothing mysterious about it. If the option to push pieces of paper around and magic up money from nowhere disappears, then those that want to make money will have to actually start producing things of value. Nothing that was ever worth doing was easy. There are no shortcuts to riches, as 2008 clearly demonstrated.

One, what 2008 demonstrated is that there are plenty of easy shortcuts to riches. Unless you think it was the great equaliser and the bankers got their comeuppance.

Two, the second lesson was that it doesn't disappear at all, it's evasive and mobile.

Britain's economy isn't some zero sum entity, the money can just fuck off and not be replaced.

It begs the question: if you can bring down the system, but all it means is your neighbourhood turns into a wasteland whilst life outside goes on unaltered, and to which you are subject, are you still keen to do it?

It would be a far more compelling proposition to rid ourselves of banking dependency by choice and through some sort of coherent replacement programme, rather than be rid of it as a product of aggressive global capitalism. Again, pyhrric victory.

 

[ItWillNeverWork]

Faith will see us through, in absence of any sort of plan. Faith in my friends family and neighbours to do what though?

There are two aspects to this situation that give me hope. The first one is that absent the opportunity to focus solely on fictitious capital, those with the funds to invest will be forced to do so in material production. This is the type of production that actually results in jobs. I'd rather a job than an extra '12% or so of total tax revenues' for the government.

The second aspect is where my belief in people comes in. I believe we will snap up such jobs with enthusiasm, and have no reason to believe otherwise. If you think this is 'mysterious', then just look at the way Iceland fucked off all their banks by refusing to bail them out, and then devalued their currency. They now have an unemployment rate of around 3.1%. We don't need to be reliant on bankers.

 

[mauvais]

Iceland's economy is based on aluminium, fish and geothermal energy.

Also the right wing seem to be making hay there these days, although I'm no expert.

 

[DotCommunist]

all it means is your neighbourhood turns into a wasteland

you know I lived in corby right?

 

[mauvais]

you know I lived in corby right?

I know this is classic Tory values but just because you lived in Corby for a bit doesn't mean it's OK to tactically nuclear strike everywhere else down to the same level. Maybe Coalville, say, but not everywhere.

 

[bimble]

My neighbour's five-year old had a stall on the pavement the other day selling broken toys.

That's the spirit. If the pound carries on the way it is we have an excellent opportunity to reinvent ourselves as car boot sale to the world.

 

[mauvais]

And again, ItWillNeverWork, show your working. Why does the flight of British-based banks mean that people will have to invest domestically in something else? Why doesn't it just mean capital flight?

 

[bimble]

Does that go for everyone whose wages are paid by one of these banks or just the demon bankers themselves? I mean the thousands of support staff, IT people, call center staff , the caterers and cleaners, and all the places where the fat cat banker bastards spend their money .. they can all fall down the stairs too presumably.

 

[ska invita]

Just a whiner then.

Come on, its not whining - a sharp shock to the economy of this potential withdrawal at its worst will crash the economy. And who gets hurt then, the rich? No, just the whiners.

I want to see a different economic set up too, but you have to transition towards it, not collapse into it. Anyway its out of our hands.

I dont reckon the banks will leave on mass next quarter anyway. The Observer has a record of mouthpiece headlines and editorials which need to go straight to the bin.

 

[magneze]

Does that go for everyone whose wages are paid by one of these banks or just the demon bankers themselves? I mean the thousands of support staff, IT people, call center staff , the caterers and cleaners, and all the places where the fat cat banker bastards spend their money .. they can all fall down the stairs too presumably.

In terms of of the massive IT skills shortage, not having banks hoovering up people to do high frequency trading bollocks could be a shot in the arm for everyone else who actually needs these skills to do something more useful.

 

[magneze]

Does that go for everyone whose wages are paid by one of these banks or just the demon bankers themselves? I mean the thousands of support staff, IT people, call center staff , the caterers and cleaners, and all the places where the fat cat banker bastards spend their money .. they can all fall down the stairs too presumably.

Oh and this is another example of the trickle down effect which doesn't work. Can't piss them off otherwise they'll spend their money elsewhere. Fuck off.

 

[bimble]

ok magneze. I wish I had your optimism and the faith of it'llneverwork. Personally, I reckon brexit is an economic disaster that will as usual not hurt the rich much just inconvenience them. But would love to proved wrong in a few years time.

 

[mauvais]

Oh and this is another example of the trickle down effect which doesn't work. Can't piss them off otherwise they'll spend their money elsewhere. Fuck off.

Not much solace if you work at the cheap end of retail banking, is it? 'Well your job is just an instance of trickle down mate, doesn't really count if you lose it, chin up. Shouldn't have concentrated your job so heavily in financial services, mate, oyyyyyy'.

Not much good wheeling out the economic equivalent of 'don't negotiate with terrorists' either if it turns out everyone is dependent on some kind of working relationship with the terrorists, who exist universally.

Your point about IT skills shortage is a fair one, if and only if Britain continues to be a source of skills and a home for companies that need those skills. My concern is that the whole country is undergoing a negative direction of travel into a domestic recession where the exit of things like large banking entities precipitates the flight of plenty more besides. Whereupon people with your view will presumably be at the wheel of the sinking vessel as it submerges, exclaiming, 'well I never liked this ship anyway'

 

[J Ed]

I wonder which banks will go, if any. HSBC is still setting up their new HQ in Birmingham, and continues to recruit for it.

 

[mauvais]

I wonder which banks will go, if any. HSBC is still setting up their new HQ in Birmingham, and continues to recruit for it.

There's various tentacles to HSBC. They've been threatening to move about a thousand jobs for ages now.

 

[gosub]

In terms of of the massive IT skills shortage, not having banks hoovering up people to do high frequency trading bollocks could be a shot in the arm for everyone else who actually needs these skills to do something more useful.

One concern I did/do have over Brexit was the ECJ ruling over Safe Harbour....rationally GCHQ is as nosey as the NSA and outside EU/ECJ could see the same logic applied to UK....was surprised no one in Remain mentioned it and even more surprised at the likes of Hannan citing the DPA as one of the bureaucratic regulations we could get rid of.

 

[magneze]

Not much solace if you work at the cheap end of retail banking, is it? 'Well your job is just an instance of trickle down mate, doesn't really count if you lose it, chin up. Shouldn't have concentrated your job so heavily in financial services, mate, oyyyyyy'.

The retail banks are leaving are they? So no banking facilities at all in the UK? Cash under the mattress for everyone.