Thanks. Will watch. Meantime it’s fascinating to see how fast SVB’s balance sheet quadrupled like right after Dodd-frank was amended to only require stress testing >250 billion, instead of 50. It’s almost as if capital requirements are there for a reason.
the real problem is a bit back. The long and the short of it is that banks' casino moves busted the house and the result was the Great Depression. Glass Steagall, in a nutshell, says "you can be a player or you can be the house, you can't be both" - you are either a "thrift", (place people put their money for safe keeping) or an "investment bank", (place people put their money to make it grow.) Dodd-Frank, on the other hand, recognized that thrifts starve to death under perpetually low interest rates. But rather than, you know, raise interest rates to the point where companies couldn't buy each other out for two six packs and a promise, Dodd-Frank allowed thrifts to be investment banks. The upside of this is that banks made a fuckton of money. The downside of this is that banks made a fuckton of money by doing risky shit, the more risky shit they did the more money they made, the more money they made the higher their stock price went up, the higher their stock price went up the easier they could finance buying each other out, the more they financed buying each other out the more the bond market grew, the more the bond market grew the riskier everything got, the riskier everything got the more likely the banks were to bust again. - Paul Wellstone Wellstone, of course, was dead within three years. I'm sure it was nothing.''Scores of banks failed in the Great Depression as a result of unsound banking practices, and their failure only deepened the crisis,'' Mr. Wellstone said. ''Glass-Steagall was intended to protect our financial system by insulating commercial banking from other forms of risk. It was one of several stabilizers designed to keep a similar tragedy from recurring. Now Congress is about to repeal that economic stabilizer without putting any comparable safeguard in its place.''
Did you read that book?! Is it crackpot or is there a there there? Of course G-S was the thing that should have been reinstated instead of Dodd-Frank, but the stranglehold that the banks have on Washington just ensures that we get what we get and we don't throw a fit, as I tell my 3 year old.
Hell nah. I'm an Ockham's Razor kinda guy and Paul Wellstone's death was a secular tragedy... but if it was arranged, it was arranged better than most. Ultimately it doesn't matter. He died, things sucked, as Harari points out, history is generally written by the biggest dicks who commit the most atrocities. I point out to my kid that we're all equal but some are more equal than others and that if you aren't very carefully making sure you're on the right side of the trade you're likely to fall victim to everyone else doing the exact same thing. It's pretty funny to me that SIVB is the biggest crash since Washington Mutual, since Washington Mutual ate shit by going neck-deep in dumb mortgages and risky loans while their credit card department also lobbied like mutherfuckers to make bankruptcy debt harder to disburse. On the one hand they really wanted unsecured loans to be forever while on the other hand they generated secured loans well past their collateral. End result? People walking away from their underwater mortgages so they could make their credit card payments and WaMu ate shit. It's the shareholder conundrum - when you conduct business one quarter at a time and your pathway to advancement is "impact" rather than "consistency" you're gonna crash the train every time.Did you read that book?! Is it crackpot or is there a there there?