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TheCountOfNowhere

The banking crisis is back

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The Italian bond and bank crisis of May 2018

https://notayesmanseconomics.wordpress.com/2018/05/29/the-italian-bond-and-bank-crisis-of-may-2018/

 

it wasnt contained after all.

 

I've re-named this topic after reading someone from DB....see below

 

Edited by TheCountOfNowhere

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Just came across this from Deutche Bank

 

https://news.efinancialcareers.com/uk-en/295859/cause-of-the-next-financial-crisis

 

Deutsche Bank's guide to the causes of the next banking jobs meltdown

1. Central banks will unwind quantitative easing (QE)

2. There will only be dangerous weapons left in the policy armory

3. There will be even more quantitative easing and even longer negative rates

4. There will be a crisis in Italy

Deutsche says Italy is a disaster waiting to happen. It has high populist party support, a perpetually under-performing economy, a comparatively huge debt burden, and a fragile banking system which continues to have to deal with legacy toxic debt holdings.

5. There will be a crisis in China

6. Global trade imbalances will become a problem

7. Populism will become a problem

We've had the Brexit vote. We've had the Trump vote. Within the next nine months, Deutsche notes that we will also have Italian elections where the anti-establishment “Five Star Movement" could gain a foothold on power and destabliize Europe. At the same time, they say Trump could yet exert U.S. military might in Asia and cause "great friction" with China. All of this risks an "extreme event" that could disrupt the financial system.

( Democracy is a problem !!! )

8. Stretched asset prices will ping back to earth

Deutsche says current asset prices are possible at their "most elevated in aggregate" throughout the whole of history. A sudden correction cannot be ruled out.

( No sh*t sherlock )

9. There will be a crisis in Japan

10. Brexit will be messy

(Its hardly orderly ) 

11. Illiquid markets will stop functioning properly

 

We've got 2 possibly 3 of them happening right now and at least  2 of them on the horizon.

Me thinks the crisis is "back"

 

 

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Democracy is fine, apparently, as long as you vote for the right people. If not, it is dangerous 'populism' and must be stopped!

Edited by Errol

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6 minutes ago, Errol said:

Democracy is fine, apparently, as long as you vote for the right people. If not, it is dangerous 'populism' and must be stopped!

This is what happens when bankers are deregulated.

 

I wish thatcher was still alive so she could see the hell she unleashed.

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20 minutes ago, TheCountOfNowhere said:

This is what happens when bankers are deregulated.

 

I wish thatcher was still alive so she could see the hell she unleashed.

She died before before it all became evident why it was such a bad idea to repeal the 1930's depression financial acts and regulation. However, the intellectuals she took her policy queues from - Greenspan, Friedman and Rand - who were lifelong friends (Rand and Greenspan were lovers at one time) and were the neo-liberal economic policy formulators, were able to face the consequences (Greenspan, at least). Despite the chief architect, saying under oath, his ideas and policy were wrong and didn't work, the US and UK decided to double down on the same policies for another decade.

"I was wrong", Alan Greenspan, giving testimony under oath at Capitol Hill, after the subprime meltdown.

 

Edited by frankvw

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With regard to a crisis in China this is something we seem to hear is constantly round the corner.  I don't have particular knowledge in China except anecdotally through work colleague who is has family there.  He seems to think everything is corrupt (at least low level ie visits to the hospital need gresy hands) and whilst average working wage is low house prices are astronomical......

However bad these things seem though, I do wonder how far China is in BETTER state to weather a storm compared to us in the West.  It has a massive growing population firmly controlled under autocratic rule from rulers -that in my eyes- has a focused big vision that has/had carefully studied the mistakes the incumbents like the US (as well as Russia) have made.  Anyway despite their problems they sound like they have better trains and less crumbly bridges (and can achieve this feats in a tiny fraction of the time it would take say a beurocratic unionized fasttened? workforce in the US to do.

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7 minutes ago, Dogtanian said:

With regard to a crisis in China this is something we seem to hear is constantly round the corner.  I don't have particular knowledge in China except anecdotally through work colleague who is has family there.  He seems to think everything is corrupt (at least low level ie visits to the hospital need gresy hands) and whilst average working wage is low house prices are astronomical......

However bad these things seem though, I do wonder how far China is in BETTER state to weather a storm compared to us in the West.  It has a massive growing population firmly controlled under autocratic rule from rulers -that in my eyes- has a focused big vision that has/had carefully studied the mistakes the incumbents like the US (as well as Russia) have made.  Anyway despite their problems they sound like they have better trains and less crumbly bridges (and can achieve this feats in a tiny fraction of the time it would take say a beurocratic unionized fasttened? workforce in the US to do.

Yes, their lower standards of human rights probably are a strength in that respect. I dare say there are parallels with the Victorians. (What your town is in the way of this new reservoir/train line/motorway?... How inconvenient!) Not sure it's something to aspire to though, and I think the reference to crisis is in their finances, which could well be linked to the infrastructure spending if the numbers haven't added up.

But it's a good point that that there are strengths and weaknesses, which sometimes get lost in the narrative. I suppose that's what makes it difficult to see what the future holds.

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Probably another false dawn, those Italian rebels will turn out to be the usual puppets if they ever get in. They'll get taken to the special club and shown some gold and the wrong end of a gun.

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Wondered why Gilt yields have dropped so much recently.

Italian ones have nearly doubled in the last couple of weeks and risen exponentially in the last few days.

Flight to safety.

Edited by Oliver Sutton

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1 hour ago, TheCountOfNowhere said:

Just came across this from Deutche Bank

 

https://news.efinancialcareers.com/uk-en/295859/cause-of-the-next-financial-crisis

 

Deutsche Bank's guide to the causes of the next banking jobs meltdown

1. Central banks will unwind quantitative easing (QE)

2. There will only be dangerous weapons left in the policy armory

3. There will be even more quantitative easing and even longer negative rates

4. There will be a crisis in Italy

Deutsche says Italy is a disaster waiting to happen. It has high populist party support, a perpetually under-performing economy, a comparatively huge debt burden, and a fragile banking system which continues to have to deal with legacy toxic debt holdings.

5. There will be a crisis in China

6. Global trade imbalances will become a problem

7. Populism will become a problem

We've had the Brexit vote. We've had the Trump vote. Within the next nine months, Deutsche notes that we will also have Italian elections where the anti-establishment “Five Star Movement" could gain a foothold on power and destabliize Europe. At the same time, they say Trump could yet exert U.S. military might in Asia and cause "great friction" with China. All of this risks an "extreme event" that could disrupt the financial system.

( Democracy is a problem !!! )

8. Stretched asset prices will ping back to earth

Deutsche says current asset prices are possible at their "most elevated in aggregate" throughout the whole of history. A sudden correction cannot be ruled out.

( No sh*t sherlock )

9. There will be a crisis in Japan

10. Brexit will be messy

(Its hardly orderly ) 

11. Illiquid markets will stop functioning properly

 

We've got 2 possibly 3 of them happening right now and at least  2 of them on the horizon.

Me thinks the crisis is "back"

 

 

Not Deutche Bank itself on that list? Theyre hiding their bushell a bit.

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5 minutes ago, Oliver Sutton said:

Wondered why Gilt yields have dropped so much recently.

Italian ones have nearly doubled in the last couple of weeks and risen exponentially in the last few days.

Flight to safety.

Spectacular change in the Italian 10 year, approx. 50 basis points and about 13 down in the UK and US.

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3 hours ago, TheCountOfNowhere said:

This is what happens when bankers are deregulated.

 

I wish thatcher was still alive so she could see the hell she unleashed.

Well said that man. Thatcher... hope the *****wits who voted for her and her ilk can see exactly that, too! 

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6 hours ago, TheCountOfNowhere said:

It really is a crisis....bank share prices being hit.

 

Oh dear, how sad....

 

https://news.sky.com/story/uk-and-eu-markets-hit-by-italian-political-crisis-11389025

Scorched earth scenario, Go for it🙂

Pain, in some cases a lot pain, everything thrown in the air, zombie companies and institutions starved, rebuild from the ashes.

I never wanted or craved this, it has been on the cards for a decade at least, I am personally just wanting the inevitable to happen so I can face it head on rather then stick my head in the sand for another decade. You can feel it in the air, something is about to happen and goes a lot deeper than house prices.

 

Edited by Guest

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1 hour ago, Noallegiance said:

Damn those pesky 'populists' asking for something other than the status quo. It's as if they think they have a choice!

Down with choice. Always a systemic problem for the matrix.

and they're not even much different - same old neoliberal economics as most others https://americanaffairsjournal.org/2018/05/italys-organic-crisis/

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4 hours ago, Dogtanian said:

With regard to a crisis in China this is something we seem to hear is constantly round the corner.  I don't have particular knowledge in China except anecdotally through work colleague who is has family there.  He seems to think everything is corrupt (at least low level ie visits to the hospital need gresy hands) and whilst average working wage is low house prices are astronomical......

However bad these things seem though, I do wonder how far China is in BETTER state to weather a storm compared to us in the West.  It has a massive growing population firmly controlled under autocratic rule from rulers -that in my eyes- has a focused big vision that has/had carefully studied the mistakes the incumbents like the US (as well as Russia) have made.  Anyway despite their problems they sound like they have better trains and less crumbly bridges (and can achieve this feats in a tiny fraction of the time it would take say a beurocratic unionized fasttened? workforce in the US to do.

Command economies have their advantages, especially when it comes to cleaning up the mess left behind by reckless Pai Gow gamblers.

As for Chinese train technology? Arguably superior to anything outside of Japan.

https://www.theguardian.com/technology/2018/may/29/maglev-magnetic-levitation-domestic-travel

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7 hours ago, TheCountOfNowhere said:

This is what happens when bankers are deregulated.

 

I wish thatcher was still alive so she could see the hell she unleashed.

Incredible how so many years after she died or left office she is still being blamed for successive governments policy whose decisions caused this mess, not hers.

 

If she were alive today and still active she would have been:

very anti Cameron's pro EU stance and lack of negotiation

leading the brexit negotiations and pulled us out with no deal if the EU didn't give her what she wanted. She would have got a decent deal like she did with the EU rebate which Blair and Cameron later threw away.

horrified at bank bail outs

horrified at ZIRP and QE

horrified at the amount of the national debt

dismayed at stupid schemes like help to buy as this distorts the free market and is socialism

would never have implemented any of the above stupid policies

Edited by bear.getting.old

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Being horrified doesn't direct your actions. How can you not do a bank bailout whether you are horrified or happy. Politicians don't want to be "that guy/gal who stood idly by for that disastrous bank run."  Horrified at QE? So what the BOE doesn't have to undo what she's horrified about.

Same as EU perhaps she might indeed have given them a size 11 handbagging but they would have still just told her politely to FO same as they are doing to government now.  Thatcher would have had identical problem as Theresa does about how to stop her MPs from rebelling.

I think I'll give you HTB though doubt she would have gone along, then again you don't know what pressure they are under from housebuilder donors.

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And remember folks.....We'll all be told by an endless parade of talking heads on TV how "no one could have seen this coming"

Edited by anonguest

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8 hours ago, Funn3r said:

Being horrified doesn't direct your actions. How can you not do a bank bailout whether you are horrified or happy. Politicians don't want to be "that guy/gal who stood idly by for that disastrous bank run."  Horrified at QE? So what the BOE doesn't have to undo what she's horrified about.

Same as EU perhaps she might indeed have given them a size 11 handbagging but they would have still just told her politely to FO same as they are doing to government now.  Thatcher would have had identical problem as Theresa does about how to stop her MPs from rebelling.

I think I'll give you HTB though doubt she would have gone along, then again you don't know what pressure they are under from housebuilder donors.

Yes, which is why democracy, as it stands, is a fail. Be interesting to develop alternative ideas. Perhaps we could give capitalism a try sometime...... not the type of socialism that is sometime referred to as crony capitalism.

 

??

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17 hours ago, frankvw said:

(Rand and Greenspan were lovers at one time)

I think I might have seen this before, but it disturbing. Adam Curtis's All watched over by loving machines has a view that many ills flowed from her.

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3 hours ago, Millaise said:

I think I might have seen this before, but it disturbing. Adam Curtis's All watched over by loving machines has a view that many ills flowed from her.

Alan Greenspan and Ayn Rand were never lovers.  You're thinking of Nathaniel Branden, another member of her coterie of younger admirers known as "The Collective".

Greenspan was one of the more indendent thinking members of the group and nowhere near as in thrall to Rand's influence as the others.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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