NFR - Are we on the cusp

[H4usuallysitting]

This is messed up... Credit Suisse borrows 50bn and it's share price goes up.....does that mean it get's rewarded for failure

[Logicalman]

I work in an investment bank. And I would say no we are not at risk. The 2 banks in US which have gone down are small players

Amazing then that a couple of small American banks getting into trouble can result in our stock market going into free fall for three days  whereas our young doctors on strike goes almost unnoticed.

Obviously not quite as small as one may think then, given the jitters they have caused.

[Shredhead]

I heard Sir Danny Blanchflower (no, not THAT one) ex Bank of England Monetary Committee bloke on LBC tonight saying we are on the cusp of another meltdown and lambasting the Bank for putting up interest rates.

Meanwhile the Government is proposing to deregulate the City FFS.

[H4usuallysitting]

I heard Sir Danny Blanchflower (no, not THAT one) ex Bank of England Monetary Committee bloke on LBC tonight saying we are on the cusp of another meltdown and lambasting the Bank for putting up interest rates.

Meanwhile the Government is proposing to deregulate the City FFS.

And in particular the pension funds.... that'll end well

[H4usuallysitting]

Another American Bank, First Republic has had to take $30bn of emergency funding...this is definitely sounding like more than a blip

[filham]

I heard Sir Danny Blanchflower (no, not THAT one) ex Bank of England Monetary Committee bloke on LBC tonight saying we are on the cusp of another meltdown and lambasting the Bank for putting up interest rates.

Meanwhile the Government is proposing to deregulate the City FFS.

A quote from the real Danny Blanchflower would probably have been more interesting.

[H4usuallysitting]

This really isn't looking good....Credit Suisse purchased by UBS for £2bn....Swiss Government (taxpayer) have underwritten the deal...supposedly Credit Suisse have around £570bn of assets - so why has it been purchased for £2bn & why is there a need for the Swiss Government (taxpayer) to underwrite the deal.....this doesn't smell right

[andyk]

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[Gloucester White]

Market in turmoil again. Any traders on here?

Yes, I trade the American futures market. IMO this bear market has a lot lower to go. Bear markets end with panic and small traders selling everything at the bottom. That hasn't happened, they are all buying the dips. The world economy is heading for a very dark place in the next few years.

[H4usuallysitting]

Market in turmoil again. Any traders on here?

Yes, I trade the American futures market. IMO this bear market has a lot lower to go. Bear markets end with panic and small traders selling everything at the bottom. That hasn't happened, they are all buying the dips. The world economy is heading for a very dark place in the next few years.

Is it a combination of cheap money for a decade with low interest rates & companies looking at market share & growth - rather than profit?

[Gloucester White]

Market in turmoil again. Any traders on here?

Yes, I trade the American futures market. IMO this bear market has a lot lower to go. Bear markets end with panic and small traders selling everything at the bottom. That hasn't happened, they are all buying the dips. The world economy is heading for a very dark place in the next few years.

Is it a combination of cheap money for a decade with low interest rates & companies looking at market share & growth - rather than profit?

Mostly. There's a war going on between the American Treasury and the Fed, Biden is flooding the country with money while the Fed is jacking up interest rates because it thinks the money will increase inflation. Banks are getting caught with lots of bonds which fall in value as interest rates go up, then they have to sell the bonds to pay off some of the debt, which causes bonds to fall even further.

The brief Truss government was brought down not by her budget, but by LDIs which are owned by pension funds and invest in bonds (the EU's rules force pension funds to invest in bonds under the Solvency 2 rules). The LDIs borrowed biilions (5 times the value of the initial investments), then when interest rates went up and they couldn't afford the interest payments, the lenders sold much of bond holdings, driving bond prices lower - a spiral that caused panic. All this started days before Truss entered number 10, but the Establishment used the panic as an excuse to get rid of Truss, blaming her budget. The Bank of England also choose that moment to announce it would start QT, which involved selling loads of gilts (bonds), driving prices even lower. It was a coup that covered up the incompetence of the Bank of England and the Treasury.

US banks are said to be $80 billion in debt because of the rate rises/bond prices falling. IMO the fall in stock markets in the next few years will be worse than the South Sea Bubble.

[H4usuallysitting]

Cheers....very interesting....bet, someone somewhere is making a bundle out of it

[cmg]

....bet, someone somewhere is making a bundle out of it

A) Yes, certainly.
B) Equally certainly it ain't going to be you or me.