I remember 2008 all too well. I'd been gambling and winning on real estate for 20 years, rolling the profits from one house into the next one. We always had outstanding credit and banks were throwing money at me. I was highly leveraged in 2007 with a plan to be done and semi retired by 2009. Then the crash came. The big players got bailed out by TARP and I sold every piece of equipment I had trying to fend off the inevitable. I ended up divorced, bankrupt and starting over at 50. So this all reads as deja vu all over again to quote Yogi Berra. And as always the banks and the big players will be bailed out while the rest of us are left holding a bag of dog shit.
The crash will come just in time for the Democrats to clean it up. As usual … reforms will get postponed and the real solutions will be hampered. Rinse. Repeat.
Nearly half of the USA stock market is made up of 4-5 technology companies, which trade with each other, this means that when the first bank sells shares to cover its ass, the whole market can collapse.
“There is a particular kind of person who reads regulatory news like this and quietly moves a percentage of their assets out of bank deposits and equity-correlated holdings” - so what types of assets are left? Real estate (non-commercial), gold, other? It’s a genuine question, especially for those of us with our theoretical wealth in 401ks on residential RE, plus an emergency fund. We see the risks, but don’t see the alternatives.
I hear and read the word “CAPTURED” over and over again. It seems to me that until we set up a tax structure that no longer rewards these huge profit swings this cycle is going to continue ad infinitum.
The little guy who is always getting hurt, holding the bag for the bail outs, does not see this coming.
Thank you for the clear explanation. Now off to speak to my investment advisor…….
The probability of a major financial crisis to happen changed from 6-36 months to 6-24 months, that is how long until the financial market would need to reconcile the paper trade with physical trade of energy futures*. Luckily for Powell, he doesn’t have to deal with it “directly”.
Banks loan money into existence. So $2.6 trillion in new lending capacity isn't a regulatory abstraction — it's new money about to enter the economy.
But the distribution question doesn't start when the cycle reverses. It starts while the cycle is running.
New credit doesn't enter the economy evenly. It reaches asset prices before wages. Productivity has risen 178% since 1971. Real wages have risen 10%. The S&P rose 237% in just the last 25 years. The crisis this piece describes is the acute version of a pattern that's been running as a chronic condition for over fifty years.
Oof, it's hard to imagine the AI bubble continuing for 5+ years, and with the conflict wildcards..
And you tell me…
Over and over and over again my friend…
You don’t believe we’re on the eve of destruction…
I remember 2008 all too well. I'd been gambling and winning on real estate for 20 years, rolling the profits from one house into the next one. We always had outstanding credit and banks were throwing money at me. I was highly leveraged in 2007 with a plan to be done and semi retired by 2009. Then the crash came. The big players got bailed out by TARP and I sold every piece of equipment I had trying to fend off the inevitable. I ended up divorced, bankrupt and starting over at 50. So this all reads as deja vu all over again to quote Yogi Berra. And as always the banks and the big players will be bailed out while the rest of us are left holding a bag of dog shit.
The crash will come just in time for the Democrats to clean it up. As usual … reforms will get postponed and the real solutions will be hampered. Rinse. Repeat.
Nearly half of the USA stock market is made up of 4-5 technology companies, which trade with each other, this means that when the first bank sells shares to cover its ass, the whole market can collapse.
Warsh is in the Epstein files
“There is a particular kind of person who reads regulatory news like this and quietly moves a percentage of their assets out of bank deposits and equity-correlated holdings” - so what types of assets are left? Real estate (non-commercial), gold, other? It’s a genuine question, especially for those of us with our theoretical wealth in 401ks on residential RE, plus an emergency fund. We see the risks, but don’t see the alternatives.
I hear and read the word “CAPTURED” over and over again. It seems to me that until we set up a tax structure that no longer rewards these huge profit swings this cycle is going to continue ad infinitum.
The little guy who is always getting hurt, holding the bag for the bail outs, does not see this coming.
Thank you for the clear explanation. Now off to speak to my investment advisor…….
The probability of a major financial crisis to happen changed from 6-36 months to 6-24 months, that is how long until the financial market would need to reconcile the paper trade with physical trade of energy futures*. Luckily for Powell, he doesn’t have to deal with it “directly”.
Happy 250th!
Wait until the auction price drops for Treasuries from decreased yields, and we do “quant easing” during inflation.
Banks loan money into existence. So $2.6 trillion in new lending capacity isn't a regulatory abstraction — it's new money about to enter the economy.
But the distribution question doesn't start when the cycle reverses. It starts while the cycle is running.
New credit doesn't enter the economy evenly. It reaches asset prices before wages. Productivity has risen 178% since 1971. Real wages have risen 10%. The S&P rose 237% in just the last 25 years. The crisis this piece describes is the acute version of a pattern that's been running as a chronic condition for over fifty years.