Global financial system implosion begins

[not-bono-ever]

Looks like financial services access to EU near to agreement- far far away from the have cake and eat it ambitions of yore - more like Japanese access - but still under EU transparency rules I have heard from the FCA.

 

[not-bono-ever]

Should be in brexit thread but fuck it. Not much chance of the U.K. going full cayman just yet

 

[Pickman's model]

Looks like financial services access to EU near to agreement- far far away from the have cake and eat it ambitions of yore - more like Japanese access - but still under EU transparency rules I have heard from the FCA.

Should be in brexit thread but fuck it. Not much chance of the U.K. going full cayman just yet

nothing's agreed until everything's agreed

 

[extra dry]

What will be the deal in 2 or 3 months times, what planning for xmas? Has Trump been told some brave souls will migrate to be xpats in the usa?

 

[Idaho]

But the NASDAQ is still 6% up on the year in that graph. At the point it was 18% up, that was a record high and was echoed by record highs in the Dow and S&P500 as well as FTSE 100 and FTSE 250 and ISTR in the CAC50 as well. The markets have been more volatile this year than I can remember for 10 years but they keep coming back to set new highs.

You're totally right to say "place your bets" because who the fuck knows where it goes next? Globally, all kinds of things look fucked. But industry earnings are still incredibly good, which I suppose is no surprise given how industry-friendly the US, UK and EU governments are.

To some degree I see equity prices as a reflection of who is winning out of society -- capital or labour. Betting against capital is quite brave as things stand.

Very fair points. But aren't all crashes marked by particular businesses getting through unscathed and in good shape?

 

[kabbes]

Very fair points. But aren't all crashes marked by particular businesses getting through unscathed and in good shape?

I don’t really know, to be fair. The 2008 crash saw a whole load of insolvencies and nobody knew how their balance sheet really stood for 2 years. That could certainly happen again in theory but there’s been more focus on it since 2008.

 

[Argonia]

Mike Maloney and Chris Martenson:

 

[yield]

Mike Maloney is host of the smash hit video series, Hidden Secrets of Money; former Rich Dad/Poor Dad advisor; author of the best-selling precious metals book, Guide to Investing in Gold and Silver

Argonia what did you think of the video? Found it muddled & inconsistent. Ancient Athens and Rome were destroyed by deficit spending? It's just advertising for precious metals.

Some old threads you might find interesting

Austrian School: Crap/Not Crap?

critique of loon theories around banking/money creation/the federal reserve

 

[yield]

India’s shadow banks risk repeating crisis-era mistakes
November 12, 2018
https://www. ft.com/content/dda8cd40-e442-11e8-8e70-5e22a430c1ad (paywalled)

The recent near-collapse of IL&FS, one of India’s shadow banks or “non-bank financial companies” (NBFCs), has shone a light on the insecure foundations of a vast sector that has both spurred India’s economic growth by expanding lending, and done so by attracting the savings of the country’s burgeoning middle class.

NBFCs, lenders that are not regulated deposit-takers but are principally funded instead by bond markets, have existed for decades. But they have taken off in recent years, as the government has seen them as an efficient conduit to extend credit to parts of the country where staid banks refused to go. Their lending has grown by up to 40 per cent a year thanks to a big shot in the arm in 2016 when India’s controversial demonetisation drive — aimed at curbing corruption by withdrawing large denomination bank notes — led to large volumes of cash being invested in money market funds.

 

[Idaho]

Another nice week to be out of equities. Can we finish the year with a big slump?

 

[Idaho]

critique of loon theories around banking/money creation/the federal reserve

This thread starts off in classic p&p format:
"I am troubled by something I don't understand, tell me what to think, ideally with lots of copy pasta that I can use".

 

[gosub]

Greenspan to investors: 'Run for cover' - CNN

 

[brogdale]

US Treasury Secretary convenes "plunge protection team" working group meeting on Xmas eve...hmmm...a happy & prosperous New Year, anyone?

 

[not-bono-ever]

People are raging about this btw- the central banks are furious that what should be established lines of regular comms are being used for cheap pr for a flailing potus.

 

[brogdale]

...and today...

 

[redsquirrel]

People are raging about this btw- the central banks are furious that what should be established lines of regular comms are being used for cheap pr for a flailing potus.

Are people actually raging about this? Rather it's some sections of capital, crying about another section of capital being beastly to them. Frankly the central banks can go fuck themselves.

The squealing that the "independence" of the Federal Reserve has been compromised is amongst the worse of all the criticisms of Trump (and there's some stiff competition). This is a body that is designed to facility the exploitation of workers, it has no independence.

 

[Idaho]

Dow up 1000 points in a day! That hadn't happened for 10 years. Boom times are back!

"Stocks rallied Monday afternoon, with the Dow rallying 976 points during the session, as investors bet that the worst of the credit crisis is over."

October 13th 2008

 

[TopCat]

Dead cat bounce?

 

[not-bono-ever]

And it’s down again by 500

 

[yield]

I wonder if this stuff is systemic or this is just a 'bad apple'. 1MDB: The inside story of the world’s biggest financial scandal | Randeep Ramesh

US subpoenas Goldman Sachs in 1MDB scandal investigation – report
30 July 2016

The Malaysia Scandal Is Starting to Look Dire for Goldman Sachs
28/12/18

Goldman Sachs, which has survived and thrived despite countless scandals over the years, may have finally stepped in a pile of trouble too deep to escape.

There’s even a Donald Trump angle to this latest great financial mess, but the outlines of that subplot – in a case that has countless – remains vague. The bank itself is in the most immediate danger.

The company’s stock rallied Thursday to close at 165, stopping a five-day slide in which the firm lost almost 12 percent of its market value. The company is down 35 percent for the year, most of that coming in the past three months as Goldman has been battered by headlines about the infamous 1MDB scandal.

Just before Christmas, Malaysian authorities filed criminal charges against Goldman, seeking a stunning $7.5 billion in reparations for the bank’s role in the scandal. Singapore authorities also announced they were expanding their own 1MDB probe to include Goldman.

Couldn't happen to a nicer company.

Can an Inverted Yield Curve Cause a Recession?
St Louis Fed. December 27, 2018

An inverted yield curve—or a situation in which market yields on shorter-term U.S. Treasury securities exceed those on longer-term securities—has been a remarkably consistent predictor of economic recessions. However, simply because inversions forecast recessions does not necessarily mean that inversions cause recessions. Why might a yield curve inversion cause economic activity to slow?

 

[not-bono-ever]

.

 

[yield]

Fracking’s Secret Problem—Oil Wells Aren’t Producing as Much as Forecast
January 02, 2019
Outline - Read & annotate without distractions

Thousands of shale wells drilled in the last five years are pumping less oil and gas than their owners forecast to investors, raising questions about the strength and profitability of the fracking boom that turned the U.S. into an oil superpower.

The Wall Street Journal compared the well-productivity estimates that top shale-oil companies gave investors to projections from third parties about how much oil and gas the wells are now on track to pump over their lives, based on public data of how they have performed to date.

Two-thirds of projections made by the fracking companies between 2014 and 2017 in America’s four hottest drilling regions appear to have been overly optimistic, according to the analysis of some 16,000 wells operated by 29 of the biggest producers in oil basins in Texas and North Dakota.

Collectively, the companies that made projections are on track to pump nearly 10% less oil and gas than they forecast for those areas, according to the analysis of data from Rystad Energy AS, an energy consulting firm. That is the equivalent of almost one billion barrels of oil and gas over 30 years, worth more than $30 billion at current prices. Some companies are off track by more than 50% in certain regions.

The shale boom has lifted U.S. output to an all-time high of 11.5 million barrels a day, shaking up the geopolitical balance by putting U.S. production on par with Saudi Arabia and Russia. The Journal’s findings suggest current production levels may be hard to sustain without greater spending because operators will have to drill more wells to meet growth targets. Yet shale drillers, most of whom have yet to consistently make money, are under pressure to cut spending in the face of a 40% crude-oil price decline since October.

 

[yield]

The Remoralization of the Market
The right response to economic populism.
10/01/19

In an era of tribal emotionalism, you’re always going to be able to make a splash reducing a complex problem to a simple narrative that separates the world into the virtuous us, and the evil them (the bankers). But I’d tell a third story about our current plight, which is neither economic populism nor free-market fundamentalism.

My story begins in the 1970s. The economy was sick. Corporations were bloated. Unions got greedy. Tax rates were too high and regulations were too tight. We needed to restore economic dynamism.

Capitalism is a wonderful system. The populists are perpetually living in 2008, when the financial crisis vindicated all their prejudices. They ignore everything since — the 19 million jobs that have been created, the way wages are now rising at 3.2 percent.

But capitalism needs to be embedded in moral norms and it needs to serve a larger social good. Remoralizing and resocializing the market is the great project of the moment. The crucial question is not: How can we have a good economy? It’s: How can we have a good society? How can we have a society in which it’s easier to be a good person?

Less growth, higher inequality, opioid epidemic, mass shootings, large increase in suicides and deaths of despair, homelessness, hunger, etc

it all just needs "The Remoralization of the Market" as "Capitalism is a wonderful system" he says. Fucking hell.

 

[teqniq]

Meanwhile...

The sub-prime timebomb is back – this time companies are lighting the fuse

 

[Idaho]

The Remoralization of the Market
The right response to economic populism.
10/01/19


Less growth, higher inequality, opioid epidemic, mass shootings, large increase in suicides and deaths of despair, homelessness, hunger, etc

it all just needs "The Remoralization of the Market" as "Capitalism is a wonderful system" he says. Fucking hell.

It's the essence of right wing thinking - that your status and wealth is a reflection of your moral worth. Ridiculous combination of human heuristics.

 

[ska invita]

also above 2008 levels of debt in the UK

 

[Idaho]

also above 2008 levels of debt in the UK

Presumably that is not factoring inflation ? So about 80,000 would be parity with 2008.

 

[not-bono-ever]

we never really managed to leave 2008 behind, despite the bollocks we are told- we just moved the furniture around a bit to hide the stains on the carpet

 

[ska invita]

Presumably that is not factoring inflation ? So about 80,000 would be parity with 2008.

That's a good point

Then again I expect less people can afford or get a mortgage so may hide a rise in personal debt. More graphs needed!

 

[not-bono-ever]

So what’s happening

Jp Morgan numbers fell below estimates for the first time in a decade and & half + credit contingency fund has been unexpected topped up

The VIX volatility index is all over the place after a year in the doldrums ( VIX extract is based on traded option vols )

A bitcoin volatility index has been launched - so you can have all the fun of trading using a derivative based on a derivative based on a something that doesn’t exist

Things are looking ropey