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Did the Shadow Banking system collapse in 2019 &  VIs try to Cover it with Covid / Money Printing?

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There's no conspiracy. Reaganomics didnt work the first time round, why expect a different outcome this time?

With new COVID cases up 47% in the US this week and unemployment up over a million (again), it is now clear that catastrophic failures of leadership have created BOTH an out of control pandemic and an economic depression.

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5 hours ago, zugzwang said:

There's no conspiracy. Reaganomics didnt work the first time round, why expect a different outcome this time?

With new COVID cases up 47% in the US this week and unemployment up over a million (again), it is now clear that catastrophic failures of leadership have created BOTH an out of control pandemic and an economic depression.

So did the shadow banking system collapse in 2019 ? 

I don't remember hearing a lot about it 

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2 hours ago, Saving For a Space Ship said:

So did the shadow banking system collapse in 2019 ? 

I don't remember hearing a lot about it 

The non-bank financial system didn't collapse outright like 2007-8 but there was a huge wobble in August/September 2019 as the market struggled to digest Trump's latest deficit spending blow-out. The dollar liquidity shortage that ensued obliged the Fed to re-start its QE program.

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1 hour ago, zugzwang said:

The non-bank financial system didn't collapse outright like 2007-8 but there was a huge wobble in August/September 2019 as the market struggled to digest Trump's latest deficit spending blow-out. The dollar liquidity shortage that ensued obliged the Fed to re-start its QE program.

Thanks, I appreciate every VI will be rushing to take advantage of the crisis and it's bailout can kicking.

Although I see some relevant point raised in the vids I posted above, I should add that generally Robert Kiyosaki  / Rich Dad PoorDad should be taken with a large pinch of salt...  

Quote

Robert Kiyosaki Rich Dad PoorDad

https://en.wikipedia.org/wiki/Robert_Kiyosaki#cite_note-cbs-48

Reception

In 2007, the Ohio state Division of Real Estate and Professional Licensing issued a statement warning people against some of the illegal methods preached by Kiyosaki in his books and seminars.[37][38]

In 2010, the Canadian Broadcasting Corporation did an exposé on scams that were being perpetuated by Kiyosaki's company in Canada in the guise of seminars. Upon tracking the success claims of "Rich Dad" seminar organizers, they discovered that these claims were not true.

Investments in trailers and trailer parks, which were being propagated as "successful" by seminar teachers, were found to actually be barren pieces of land that no one was using.[39]

From 1990 to 1995, Kiyosaki used Amway to promote his book with multi-level marketing. He was sued by his fellow author Sharon Lechter in 2007 for not keeping to the terms of their agreement.[40]

Kiyosaki's advice has been criticized for emphasizing anecdotes and containing nothing in the way of concrete advice on how readers should proceed or work.[41]

He replies that his material is meant to be a motivational tool to get readers thinking about money rather than a guide to wealth, that "rich dad" was a fictional character,[42

] and that the books are supposed to be "interesting" rather than involve a lot of technical material.[43]

According to John Reed, a real estate advisor, Kiyosaki's books often advise illegal practices such as using insider tips from rich friends (insider trading), vulture real estate purchases, taking more debt on credit cards than one can handle and declaring bankruptcy whenever one's plans go awry.[44]

In an interview with the Canadian Broadcasting Corporation, he admitted that he partnered with a real estate firm to promote their business through his seminars.

He also admitted that since the Rich Dad seminars were franchisees that functioned independent of him, he had little control over their content.

Kiyosaki has been criticized for being anti-education, advocating for people to drop out of school and for unfolding the idea of higher education being superfluous for financial success.[45]

He has ridiculed people who are highly educated and academically successful and has said "the best way to get even with A-grade students was to make them employees of mine".

He has described people who go to college as "suckers" and PhD holders as people who are "poor, helpless, and desperate", alluding to Kiyosaki's own father, who became poor and unemployed during the last years of his life despite having a PhD.[46]

In 2006 and 2007, Kiyosaki's Rich Dad seminars continued to promote real estate as a sound investment, just before their prices came crashing down.[47]

In 2010, Allan Roth of CBS News documented what occurred when he attended one of Rich Dad's free seminars and dissected some of the tactics employed.[48]

The Marketplace exposé on his seminars in Canada showed what occurred in $450 seminars through a hidden camera including Kiyosaki's response to them.[49]

 

Edited by Saving For a Space Ship

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1 hour ago, zugzwang said:

The non-bank financial system didn't collapse outright like 2007-8 but there was a huge wobble in August/September 2019 as the market struggled to digest Trump's latest deficit spending blow-out. The dollar liquidity shortage that ensued obliged the Fed to re-start its QE program.

Rumour has it that JPMorgan may have "engineered" the situation - https://www.reuters.com/article/us-usa-repo-jpmorgan-analysis-idUSKBN1WG439 leading to Term repo facility (Fed powered, ofcourse) appearing.

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9 minutes ago, Social Justice League said:

Best just kill off Western consumer capitalism and be done with it.

The b4stard died in 1989 anyway and we have had 31 years of useless a$$wipes trying to keep the wheels on.

The desperation is sickening.

Trump's doing his damnedest to make the decline of the West permanent.

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10 minutes ago, zugzwang said:

Trump's doing his damnedest to make the decline of the West permanent.

Yeah, everybody's gonna be kung fu fighting real soon. 

Western Capitalism only works if you can find poor b4stards to make rubbish for you on the cheap.

 

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COVID19 allows The Men Behind The Curtain to impose several things which they've been trying to implement for a very long time:

1. Do away with all physical currency, (cashless has become all the more prevalent in light of this "Pandemic").

2. Further removal of people's freedoms, (Social Distancing/Mandatory face coverings on Public Transport etc).

3. Plunging the World into another depression & taxing the serfs to pay it back, thus making everyone poorer, except the top 1%, (they can print £100bn for their friends, but not for us etc).

4. Reducing the number of Pensions they have to pay out each month.

I wouldn't be at all surprised if this was premeditated. They're either Evil Geniuses or total fvckwits.

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On 27/06/2020 at 14:53, Saving For a Space Ship said:

So did the shadow banking system collapse in 2019 ? 

I don't remember hearing a lot about it 

There were quite a few articles at the time. 

https://www.google.com/amp/s/www.thestreet.com/.amp-mishtalk/mishtalk/economics/pondering-the-collapse-of-the-entire-shadow-banking-system

This is what caused the DOW to surge to 29,000. It will now pass that due to all the printing.

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3 hours ago, mspL4 said:

COVID19 allows The Men Behind The Curtain to impose several things which they've been trying to implement for a very long time:

1. Do away with all physical currency, (cashless has become all the more prevalent in light of this "Pandemic").

2. Further removal of people's freedoms, (Social Distancing/Mandatory face coverings on Public Transport etc).

3. Plunging the World into another depression & taxing the serfs to pay it back, thus making everyone poorer, except the top 1%, (they can print £100bn for their friends, but not for us etc).

4. Reducing the number of Pensions they have to pay out each month.

I wouldn't be at all surprised if this was premeditated. They're either Evil Geniuses or total fvckwits.

They still needs the plebs to buy their crap though, which I do as least as possible.

The pleb Armoury is reign In spending

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On 27/06/2020 at 23:09, Social Justice League said:

Best just kill off Western consumer capitalism and be done with it.

The b4stard died in 1989 anyway and we have had 31 years of useless a$$wipes trying to keep the wheels on.

The desperation is sickening.

Not so much 1989 (when the crumbling Communist states were in a much worse state as contrast) but most defintely in 2008, when the American and UK economic "elites" by then had grown far too arrogant and complacent, with no competition and incentive.

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12 hours ago, mspL4 said:

COVID19 allows The Men Behind The Curtain to impose several things which they've been trying to implement for a very long time:

1. Do away with all physical currency, (cashless has become all the more prevalent in light of this "Pandemic").

2. Further removal of people's freedoms, (Social Distancing/Mandatory face coverings on Public Transport etc).

3. Plunging the World into another depression & taxing the serfs to pay it back, thus making everyone poorer, except the top 1%, (they can print £100bn for their friends, but not for us etc).

4. Reducing the number of Pensions they have to pay out each month.

I wouldn't be at all surprised if this was premeditated. They're either Evil Geniuses or total fvckwits.

If you were an evil genuis, would you develop and release a virus that (i) ground all the economic activity that generates your wealth to a halt and (ii) might kill you?

It makes no sense.

When you say "taxing the serfs to pay it back" what is the "it" here?  Is it the 80% of salary for example that was already paid - to ordinary people (not the 1%)?

As to removing people's freedoms - what exactly have these Men Behind The Curtain got to gain by requiring people to wear a handkerchief over their face on the bus?

The danger of conspiracy theory is that once you've decided they're out to get you, you begin to turn the jigsaw pieces into your own picture instead of the picture they really paint.

Never attribute to intelligent design what can be attributed to randomness or stupidity, because there is a lot more  randomness and stupidity in the world than intelligent design.

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2 hours ago, scottbeard said:

If you were an evil genuis, would you develop and release a virus that (i) ground all the economic activity that generates your wealth to a halt and (ii) might kill you?

If we are playing the "If you were an evil genius" game, I think you're asking the wrong question...

If you were an evil genius, faced with systemic failure of the corporate structures on which your social status depends, would you:

  • Promote fear about a health scare to the political class - triggering emergency measures from governments worldwide.

  • Promote widespread irrational public fear and impose draconian illogical restrictions to marginalize electorates.

  • Demand furlough schemes to mitigate the cost of mass redundancies at public expense.

I'm not entirely convinced by the line that "Shadow Banking" collapsed in 2019 - but I do suspect something broadly similar.  I think that Banking (all of it: commercial, investment and shadow) collapsed in 2008-2009.  I think that, all around the world, there was co-ordinated action to preserve the status quo by reducing interest rates to preposterously low levels.. and flooding the system with credit.  This crippled the long-term economy by undermining the time-value of money - providing perverse incentives to industry and commerce... which, systemically, became less and less effective over the ensuing decade.

Andrew Bailey says that the BoE monetized UK sovereign debt for reasons of maintaining monetary stability earlier this year.  With ~£300bn of new sovereign debt... that was not subjected to open market terms... the UK government has, in one sense, de-coupled itself from commercial banks.

I interpret that this opens up a new opportunity for government.  Traditionally, we assumed that sovereign debt yields were tightly correlated with inter-bank interest rates (e.g. LIBOR) and that these were tightly correlated with commercial rates... either for direct bank business with customers - or with shadow banking institutions.  This assumption left government in a bind... if it were to believe that commercial interest rates were too low - but that substantial increases in the cost of servicing sovereign debt would render the government insolvent.

If government can break this link between sovereign debt yields and commercial interest rates, then government could remain solvent while facilitating an environment in which non-government institutions can be held accountable for their debts by meaninfull costs of debt service.

I would like to closely watch yield curves (for various currencies/nations - I don't think this is UK centric).  By any chance can any HPC economic nerds point me at an easy way to do this? 

I'd also like to establish a clear understanding of UK Treasury finances - overall.  For example:  I'd like to know if the 'new' COVID spending is offset by other planned government spending that is no-longer going ahead.  Research strategy hints welcome. 🙂

 

 

 

Edited by A.steve

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3 hours ago, scottbeard said:

If you were an evil genuis, would you develop and release a virus that (i) ground all the economic activity that generates your wealth to a halt and (ii) might kill you?

They get free money printed by their friends.  Trashing the economy will have no effect on those who receive free handouts.  Their lives won't change in the slightest, or if they do, it will be for the better...

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3 hours ago, scottbeard said:

When you say "taxing the serfs to pay it back" what is the "it" here?  Is it the 80% of salary for example that was already paid - to ordinary people (not the 1%)?

And who's going to pay back that 80%? The Top 1%?  I doubt it...

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3 hours ago, scottbeard said:

As to removing people's freedoms - what exactly have these Men Behind The Curtain got to gain by requiring people to wear a handkerchief over their face on the bus?

Conditioning people to accept that they now have to do certain things that they didnt' have to do beforehand.  Today it's facemasks on Public Transport, tomorrow it could be no physical contact, not gathering in groups of more than 3 people, the day after that...oh wait

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8 minutes ago, mspL4 said:

They get free money printed by their friends.  Trashing the economy will have no effect on those who receive free handouts.  Their lives won't change in the slightest, or if they do, it will be for the better...

If I were enjoying the lifestyle of the 1%, the very last thing I'd want to do is kick off some massive global event whose outcome I could not predict with certainty, when I could just carry on creaming off a life of luxury indefinitely maintaining the pre-COVID status quo.

If you've already won a life of luxury, why put all your money on red and roll again?

It makes no sense that this COVID crisis is by design, just as the 07/08 crisis was not by design.

I agree that they may seek to use the crisis to their advantage, it's your idea that it was "premeditated" that I disagree with.

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6 minutes ago, mspL4 said:

Conditioning people to accept that they now have to do certain things that they didnt' have to do beforehand.  Today it's facemasks on Public Transport, tomorrow it could be no physical contact, not gathering in groups of more than 3 people, the day after that...oh wait

People weren't conditioned into wearing masks, or avoiding public transport, or practising social distancing. The general public began to behave in this way of their own accord - fearful of Cummings' herd immunity approach - which then resulted in a violent u-turn in public policy.

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1 hour ago, zugzwang said:

People weren't conditioned into wearing masks, or avoiding public transport, or practising social distancing. The general public began to behave in this way of their own accord - fearful of Cummings' herd immunity approach - which then resulted in a violent u-turn in public policy.

While some of the public may have decided to wear a mask "of their own accord" (or, equivalently, on account of their own fear) but it was imposed on others as mandatory by autocratic rule.

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4 hours ago, A.steve said:

While some of the public may have decided to wear a mask "of their own accord" (or, equivalently, on account of their own fear) but it was imposed on others as mandatory by autocratic rule.

Democratic rule. Consistent with the best scientific advice.

https://www.cuttingscore.com/nassim-taleb-masks-matter-heres-the-model/

 

 

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3 hours ago, zugzwang said:

Democratic rule. Consistent with the best scientific advice.

I remain to be convinced that the advice is either 'best' or 'scientific'.

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  • 399 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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