Correct analysis – but the big question is can we rely on this crop of uninspiring Central Bankers to take the right actions? I fear not and I also fear that, if they tried, our woeful current crop of politicians would somehow stop them.
The central bankers are harvesting the small banks. They are a great white shark in a shoal of mackerel. Money is being consolidated, CBDCs are coming.
The Global Elites have had enough with all this Middle Class and Working class free thinking and democracy and are harvesting the global wealth so all must become poor and become clients of the State. Neo-Feudalism. Bend the knee you proles….
Yeats…
Turning and turning in the widening gyre The falcon cannot hear the falconer; Things fall apart; the centre cannot hold; Mere anarchy is loosed upon the world, The blood-dimmed tide is loosed, and everywhere The ceremony of innocence is drowned; The best lack all conviction, while the worst Are full of passionate intensity. Surely some revelation is at hand; Surely the Second Coming is at hand. The Second Coming! Hardly are those words out When a vast image out of Spiritus Mundi Troubles my sight: somewhere in sands of the desert A shape with lion body and the head of a man, A gaze blank and pitiless as the sun, Is moving its slow thighs, while all about it Reel shadows of the indignant desert birds. The darkness drops again; but now I know That twenty centuries of stony sleep Were vexed to nightmare by a rocking cradle, And what rough beast, its hour come round at last, Slouches towards Bethlehem to be born?
The central bankers are harvesting the small banks. They are a great white shark in a shoal of mackerel. Money is being consolidated, CBDCs are coming.
The Global Elites have had enough with all this Middle Class and Working class free thinking and democracy and are harvesting the global wealth so all must become poor and become clients of the State. Neo-Feudalism. Bend the knee you proles….
Yeats…
Turning and turning in the widening gyre The falcon cannot hear the falconer; Things fall apart; the centre cannot hold; Mere anarchy is loosed upon the world, The blood-dimmed tide is loosed, and everywhere The ceremony of innocence is drowned; The best lack all conviction, while the worst Are full of passionate intensity. Surely some revelation is at hand; Surely the Second Coming is at hand. The Second Coming! Hardly are those words out When a vast image out of Spiritus Mundi Troubles my sight: somewhere in sands of the desert A shape with lion body and the head of a man, A gaze blank and pitiless as the sun, Is moving its slow thighs, while all about it Reel shadows of the indignant desert birds. The darkness drops again; but now I know That twenty centuries of stony sleep Were vexed to nightmare by a rocking cradle, And what rough beast, its hour come round at last, Slouches towards Bethlehem to be born?
Malcolm Webb
1 year ago
Correct analysis – but the big question is can we rely on this crop of uninspiring Central Bankers to take the right actions? I fear not and I also fear that, if they tried, our woeful current crop of politicians would somehow stop them.
UnHerd Reader
1 year ago
What a mad, Rube Goldberg machine, of conditions this guy invents and catalogues, and then says how obvious it all is….
I do not think he knows what he it talking about.
It is simple. The banks collateralized with long term bonds and mortgage backed securities at almost no interest. These dropped in value 20 – 40 % if ‘Marked to Market’ so were now just worth 60 – 80% of the value they collateralizing. (when interest rates rise bonds with lower interest plummet down in price in the re-sale market because they locked in a loss compared to the higher interest bonds)
All fine though if the bonds could be left till maturity – but that was not going to happen. Once people withdrew their deposits, being rightfully worried that a run will break the bank, then the bank would have to sell those bonds now worth 60 – 80 cents on the dollar to cover it. Thais is impossible, so the bank is broken as it cannot cover the withdrawals.
If everyone just left their money in the bank so the bonds could mature over the next 2 – 20 – 30 years all would be fine. But who would? Once they know the bank will collapse if people withdraw their deposits all know they better withdraw first to be safe – so a run, so a crash.
No need for the TDS .” They’d stir in a bit of Trump-era deregulation”
It is just keeping interest rates at zero with QE for 13 years, and allowing these long term no interest bonds to be collateral.
Everything else is Insane too – but the simple fact is QE cannot work – the wall will finally be hit…. and there is a many headed hydra loosed from this Debt Economy.
(see the Liz Truss mini budget – just think what pensions and Insurance companies are going through – same as banks.)
UnHerd Reader
1 year ago
What a mad, Rube Goldberg machine, of conditions this guy invents and catalogues, and then says how obvious it all is….
I do not think he knows what he it talking about.
It is simple. The banks collateralized with long term bonds and mortgage backed securities at almost no interest. These dropped in value 20 – 40 % if ‘Marked to Market’ so were now just worth 60 – 80% of the value they collateralizing. (when interest rates rise bonds with lower interest plummet down in price in the re-sale market because they locked in a loss compared to the higher interest bonds)
All fine though if the bonds could be left till maturity – but that was not going to happen. Once people withdrew their deposits, being rightfully worried that a run will break the bank, then the bank would have to sell those bonds now worth 60 – 80 cents on the dollar to cover it. Thais is impossible, so the bank is broken as it cannot cover the withdrawals.
If everyone just left their money in the bank so the bonds could mature over the next 2 – 20 – 30 years all would be fine. But who would? Once they know the bank will collapse if people withdraw their deposits all know they better withdraw first to be safe – so a run, so a crash.
No need for the TDS .” They’d stir in a bit of Trump-era deregulation”
It is just keeping interest rates at zero with QE for 13 years, and allowing these long term no interest bonds to be collateral.
Everything else is Insane too – but the simple fact is QE cannot work – the wall will finally be hit…. and there is a many headed hydra loosed from this Debt Economy.
N T
1 year ago
I’m unclear on what the banks, in a near-zero-return environment, were supposed to do. The regulators’ gamed-up stress tests didn’t take rising rates, let alone rapidly rising rates, into account. What were they supposed to do to make money? They were holding deposits, and nobody wanted to pay to rent them.
The inaction by the Feds is unforgivable. They could have stopped all of this, and bought time to craft solutions. Instead, they played right into the shorts’ hands, and soon, we’re going to have a too-big-to-fail fail, while we get lectured about how centralization of money, like power, is a good thing.
Correct analysis – but the big question is can we rely on this crop of uninspiring Central Bankers to take the right actions? I fear not and I also fear that, if they tried, our woeful current crop of politicians would somehow stop them.
The central bankers are harvesting the small banks. They are a great white shark in a shoal of mackerel. Money is being consolidated, CBDCs are coming.
The Global Elites have had enough with all this Middle Class and Working class free thinking and democracy and are harvesting the global wealth so all must become poor and become clients of the State. Neo-Feudalism. Bend the knee you proles….
Yeats…
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of the indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?
The central bankers are harvesting the small banks. They are a great white shark in a shoal of mackerel. Money is being consolidated, CBDCs are coming.
The Global Elites have had enough with all this Middle Class and Working class free thinking and democracy and are harvesting the global wealth so all must become poor and become clients of the State. Neo-Feudalism. Bend the knee you proles….
Yeats…
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of the indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?
Correct analysis – but the big question is can we rely on this crop of uninspiring Central Bankers to take the right actions? I fear not and I also fear that, if they tried, our woeful current crop of politicians would somehow stop them.
What a mad, Rube Goldberg machine, of conditions this guy invents and catalogues, and then says how obvious it all is….
I do not think he knows what he it talking about.
It is simple. The banks collateralized with long term bonds and mortgage backed securities at almost no interest. These dropped in value 20 – 40 % if ‘Marked to Market’ so were now just worth 60 – 80% of the value they collateralizing. (when interest rates rise bonds with lower interest plummet down in price in the re-sale market because they locked in a loss compared to the higher interest bonds)
All fine though if the bonds could be left till maturity – but that was not going to happen. Once people withdrew their deposits, being rightfully worried that a run will break the bank, then the bank would have to sell those bonds now worth 60 – 80 cents on the dollar to cover it. Thais is impossible, so the bank is broken as it cannot cover the withdrawals.
If everyone just left their money in the bank so the bonds could mature over the next 2 – 20 – 30 years all would be fine. But who would? Once they know the bank will collapse if people withdraw their deposits all know they better withdraw first to be safe – so a run, so a crash.
No need for the TDS .” They’d stir in a bit of Trump-era deregulation”
It is just keeping interest rates at zero with QE for 13 years, and allowing these long term no interest bonds to be collateral.
Everything else is Insane too – but the simple fact is QE cannot work – the wall will finally be hit…. and there is a many headed hydra loosed from this Debt Economy.
(see the Liz Truss mini budget – just think what pensions and Insurance companies are going through – same as banks.)
(see the Liz Truss mini budget – just think what pensions and Insurance companies are going through – same as banks.)
What a mad, Rube Goldberg machine, of conditions this guy invents and catalogues, and then says how obvious it all is….
I do not think he knows what he it talking about.
It is simple. The banks collateralized with long term bonds and mortgage backed securities at almost no interest. These dropped in value 20 – 40 % if ‘Marked to Market’ so were now just worth 60 – 80% of the value they collateralizing. (when interest rates rise bonds with lower interest plummet down in price in the re-sale market because they locked in a loss compared to the higher interest bonds)
All fine though if the bonds could be left till maturity – but that was not going to happen. Once people withdrew their deposits, being rightfully worried that a run will break the bank, then the bank would have to sell those bonds now worth 60 – 80 cents on the dollar to cover it. Thais is impossible, so the bank is broken as it cannot cover the withdrawals.
If everyone just left their money in the bank so the bonds could mature over the next 2 – 20 – 30 years all would be fine. But who would? Once they know the bank will collapse if people withdraw their deposits all know they better withdraw first to be safe – so a run, so a crash.
No need for the TDS .” They’d stir in a bit of Trump-era deregulation”
It is just keeping interest rates at zero with QE for 13 years, and allowing these long term no interest bonds to be collateral.
Everything else is Insane too – but the simple fact is QE cannot work – the wall will finally be hit…. and there is a many headed hydra loosed from this Debt Economy.
I’m unclear on what the banks, in a near-zero-return environment, were supposed to do. The regulators’ gamed-up stress tests didn’t take rising rates, let alone rapidly rising rates, into account. What were they supposed to do to make money? They were holding deposits, and nobody wanted to pay to rent them.
The inaction by the Feds is unforgivable. They could have stopped all of this, and bought time to craft solutions. Instead, they played right into the shorts’ hands, and soon, we’re going to have a too-big-to-fail fail, while we get lectured about how centralization of money, like power, is a good thing.