Global financial system implosion begins

[gosub]

Beijing calls for calm after historic tech stock rout

Chinese state media is urging investors to stay calm following a brutal stock market sell-off this week that has wiped out hundreds of billions of dollars in value.

edition.cnn.com

 

[Artaxerxes]

The sword of Damocles that is low interest rates unpacked

 

[yield]

Saved by the bankers
During the pandemic central banks averted a financial collapse, but they can't admit how they did it
September 1, 2021

Tooze is fascinating on the nature of this “new normal” for monetary policy in rich countries. QE is a reasonably straightforward process: a central bank electronically creates new money and uses this new cash to purchase assets from the private sector—mostly in the form of government bonds. But what exactly is this simple operation actually achieving? That is less clear: Ben Bernanke, head of the US Federal Reserve during the crash, once remarked that QE “works in practice, but not in theory.” It’s probably more accurate to say there are so many rival theories about how it might work, that it is hard to have faith in any of them.

According to monetarist logic, increasing the supply of money should, all things being equal, lead to higher inflation. But all things are rarely equal. The more persistent threat facing the US, the Eurozone and Japan over the past decade (and in Japan’s case longer) has been undershooting inflation (or even outright deflation) rather than soaring prices.

 

[magneze]

Saved by the bankers
During the pandemic central banks averted a financial collapse, but they can't admit how they did it
September 1, 2021

There's an excellent long read by Adam Tooze in the Guardian.

Has Covid ended the neoliberal era? | Adam Tooze

The long read: The year 2020 exposed the risks and weaknesses of the market-driven global system like never before. It’s hard to avoid the sense that a turning point has been reached

www.theguardian.com

It's adapted from the book.

 

[CH1]

Never mind all that theoretic stuff, this sounds pretty dire.
Gas Crunch Threatens Industry In UK And Europe - Todayuknews

 

[brogdale]

"Helicopter money" in the UK from the 27th...£100 'free' for anyone in NI...


Haven't linked because behind Murdoch's paywall

 

[MickiQ]

This plan was mooted last summer gvie everyone a grand to spend on the High St, it eventually evolved (or devolved) into Eat Out To Help Out. Mrs Q and I had one meal out on it on the very last day of the scheme.
I'm sure that if they had given us a £1000 each to spend on the High St we would have found something to spend it on.

 

[not-bono-ever]

13 years since Lehman’s went to the wall. Lol

 

[brogdale]

Here we go...2021's Lehman moment?

 

[yield]

Subscribe to read | Financial Times

News, analysis and comment from the Financial Times, the worldʼs leading global business publication

www.ft.com

outline.com is available for purchase - Sedo.com

outline.com

FT. September 29, 2021

The transport organisations, which represent 65m workers, accused governments of failing to listen, and called for “decisive and co-ordinated action”.

At the peak of the crisis 400,000 seafarers were unable to leave their ships, with some working for as long as 18 months over their initial contracts, the letter said. Flights have been restricted and aviation workers have faced the inconsistency of border, travel and vaccine restrictions/requirements, it added.

Additional and systemic stopping at road borders has also meant truck drivers have been forced to wait, sometimes weeks, before being able to complete their journeys and return home.

“Global supply chains are beginning to buckle as two years’ worth of strain on transport workers take their toll,” the groups wrote.

 

[CH1]

Subscribe to read | Financial Times

News, analysis and comment from the Financial Times, the worldʼs leading global business publication

www.ft.com

outline.com is available for purchase - Sedo.com

outline.com

FT. September 29, 2021

Nice to read that Maersk profits hit an all time record BECAUSE of the disruption.

 

[yield]

Italian court convicts Deutsche Bank, Nomura in Monte Paschi derivative trial
08/11/19

Italy, Unicredit talks over sale of Monte dei Paschi collapse
FT October 24, 2021 Outline - Read & annotate without distractions

One of the main stumbling blocks during the last round of negotiations was how much capital the government would be required to inject into MPS, according to people involved in the talks.

The operation was seen as too costly by the Italian government and the capital injection required by UniCredit was not considered to be feasible.

The Italian Treasury, which bailed out MPS in 2017, is required to sell off its stake in the world’s oldest bank by December 31 under conditions set by the European Commission.

The fate of the lender has sparked infighting in the coalition government led by former European Central Bank president Mario Draghi.

This week, the Treasury indicated it was unwilling to provide much more capital than its initial projection of €2bn to €2.5bn, which would be raised.

People involved in the negotiations confirmed that Milan-based UniCredit would require up to €7bn, an unfeasible option for the Italian government.

 

[Flavour]

Oh I'll be so happy if unicredit take a massive spanking

 

[Ming]

Didn't know where else to put this. Interesting Vice piece on the 1MDB crime.

 

[CH1]

Didn't know where else to put this. Interesting Vice piece on the 1MDB crime.

BBC Storyville covered this in detail last year (now unavailable).
Your post is a handy reminder

BBC Four - Storyville, The PM, the Playboy and the Wolf of Wall Street

The world's biggest white-collar heist, a US$3.5bn theft from a Malaysian wealth fund.

www.bbc.co.uk

 

[CH1]

According to Sky News Bulb Energy is about to go into administration/emergency nationalisation.
Their major investor Sequoia Economic Infrastructure Income Fund want immediate repayment of their $50 million loan.

Sequoia state that their investment was netting them a 7.2% income stream - rather more than my own 0.01% from the Halifax Buiding Society. https://www.seqifund.com/wp-content/uploads/SEQI_Monthly_Report_20190228.pdf

 

[platinumsage]

According to Sky News Bulb Energy is about to go into administration/emergency natiionalisation.
Their major investor Sequoia Economic Infrastructure Income Fund want immediate repayment of their $50 million loan.

Sequoia state that their investment was netting them a 7.2% income stream - rather more than my own 0.01% from the Halifax Buiding Society. https://www.seqifund.com/wp-content/uploads/SEQI_Monthly_Report_20190228.pdf

You could always buy the fund, it's not privately owned and will be held in many people's pensions:

Sequoia Economic Infrastructure Income Fund Ltd (SEQI) NPV Share Price | SEQI

The latest Sequoia Economic Infrastructure Income Fund Ltd share price (SEQI). View recent trades and share price information for Sequoia Economic Infrastructure Income Fund Ltd and other shares.

www.hl.co.uk

 

[CH1]

You could always buy the fund, it's not privately owned and will be held in many people's pensions:

Sequoia Economic Infrastructure Income Fund Ltd (SEQI) NPV Share Price | SEQI

The latest Sequoia Economic Infrastructure Income Fund Ltd share price (SEQI). View recent trades and share price information for Sequoia Economic Infrastructure Income Fund Ltd and other shares.

www.hl.co.uk

True. And the $50 million (or £50 million if it was that) is a flea bite off Sequoia's capitalisation.

 

[brogdale]

According to Sky News Bulb Energy is about to go into administration/emergency nationalisation.
Their major investor Sequoia Economic Infrastructure Income Fund want immediate repayment of their $50 million loan.

Sequoia state that their investment was netting them a 7.2% income stream - rather more than my own 0.01% from the Halifax Buiding Society. https://www.seqifund.com/wp-content/uploads/SEQI_Monthly_Report_20190228.pdf

Privatise the accumulation and socialise the losses.

 

[platinumsage]

True. And the $50 million (or £50 million if it was that) is a flea bite off Sequoia's capitalisation.

The problem is with Bulb's inability to service such a tiny debt and the regulatory environment that let it operate in this kind of market in the first place, not with it's shareholders for looking to their own interests.

 

[CH1]

The problem is with Bulb's inability to service such a tiny debt and the regulatory environment that let it operate in this kind of market in the first place, not with it's shareholders for looking to their own interests.

I would wish to make a critique of the private equity system where businesses are treated as gambling chips.

 

[brogdale]

The problem is with Bulb's inability to service such a tiny debt and the regulatory environment that let it operate in this kind of market in the first place, not with it's shareholders for looking to their own interests.

The problem is with the privatisation of monopoly former public utilities.

 

[platinumsage]

I would wish to make a critique of the private equity system where businesses are treated as gambling chips.

That’s not relevant to what Sequoia Economic Infrastructure Income Fund are doing here.

 

[platinumsage]

The problem is with the privatisation of monopoly former public utilities.

That’s what I said.

 

[NoXion]

The problem is with Bulb's inability to service such a tiny debt and the regulatory environment that let it operate in this kind of market in the first place, not with it's shareholders for looking to their own interests.

Why not both? There's plenty of blame to go around.

I've never understood how the fuck all these shitty little "energy" companies have managed to spring up like mushrooms, while never actually generating a watt of energy themselves. How the fuck are they adding any meaningful value to the process of getting electricity from the grid to the home? As far as I can tell, they are just middlemen who make money by creaming something off what should be a straightforward process.

The fact that such companies are now dropping like flies should stand as a testament to how unsustainable such businesses ultimately are.

 

[CH1]

That’s not relevant to what Sequoia Economic Infrastructure Income Fund are doing here.

Possibly. But the effect of fixed interest finance in a volatile situation works well with growth and rising profits - but is the kiss of death when the buisness swings into loss.

Do you feel OFGEM ought to warn potential customers of this? If it is caveat emptor - where is the information?
Or are the end customers irrelevant to the needs of capital?

 

[not-bono-ever]

The smaller outfits were just chancers. Totally exposed to market moves in energy. The only reason they got into the business was due today to this price volatility and people desperately scratching about to find some certainly . And then they close shop and run off when energy does what it always does

 

[brogdale]

That’s what I said.

If you had I wouldn't have needed to say it.
You appeared to blame the viability of the players and regulators within the privatised domestic energy market, not the very existence of a privatised market.

 

[toblerone3]

I am / was a Bulb customer.

 

[NoXion]

I am / was a Bulb customer.

Might I ask why? I think I saw an earlier version of your post in which you said it was for green reasons, but the thing is... Aren't they just supplying you energy from the National Grid just like everyone else? It's not as if they can actually separate out and only supply to you the electricity which was made by wind turbines, and not the electricity which was made by fossil fuel burning stations. All electricity sources in this country contribute to a big pool and everyone in draws from that, as I understand it.

This is the kind of thing I'm getting at whenever I say that supply-side solutions must form a major part of solving our energy problem. It's no good having all these companies offer "green" tariffs to customers, when it makes no damn difference as far as actually generating electricity goes. To me it stinks to high heaven of greenwashing, combined with the rotten idea that "consumer choice" has anything meaningful to do with it.