Thanks. I am mostly fine. I am Turkish after all. I am used to 30%+ inflation. High inflation + low but increasing interest rates = best time to get indebted if you have secure income.
European Economics Thread
- Thread starter PiSigma
- Start date
Dont banks try to match inflation rate at least so that they don't lose money from giving out loans?
Not with low interest rates. Currently, you can get car loans from a 7-8% interest rate. Mortgages can be as low as 3.5%. It is a good time to get a loan since you can inflate it away.
I'm fine and if shit really hits the fan I should ask my mom to help me get a Filipino passport
.Yeah I bought my house just before the current housing market lifted off to the moon, got a interest rate of like 2.2% on that mortgage.
Bro I help you get one...lol, we accept dual passportI'm fine and if shit really hits the fan I should ask my mom to help me get a Filipino passport
and IF you do come and visit me in Manila, you and @Coalescence we will have a blast!
The biggest story this next week might be Credit Suisse. They are one of the 2 largest Swiss banks along with UBS. There are persistent rumors everywhere this week that CS is in trouble. It has now picked up to the point where everyone is talking about an imminent CS demise. We got a bears/lehman moment on hand right now.
I don't say this lightly. Back in 2008, I was just in finance industry not even 2 years. The US financial world was collapsing around me. Bears and Lehman fell in what appeared to be a couple of weeks. 2 of the big 4 investment banks going under. Morgan Stanley was under pressure next. Speculation was that they were very close to ceasing operation and the fed really stepped in at the last moment to save Morgan Stanley. At the time, I was told that if MS went under, Goldman was next to fall. People not around the financial industry often don't realize how fragile the entire system is.
So, we are at another of those moment now. While people on this forum are focusing on inflation and de-industrialization, the most immediate problem facing the EU is financial sector. We are at a point where CS is talking to major investor right now to prevent a bank run. Just recently, CS had announced they were leaving the US market and laying off a whole bunch of people. The rapidly rising interest rates is something the banks aren't handling very well.
It's possible that CS will go under next week. It's unclear to me if swiss central bank stepping you can save them. Even if CS doesn't fall in the next month, there are several obvious suspects afterward. Deutsche bank is apparently having real issues too. Given the recent pension fund run that we saw in UK, Barclays and RBS are obvious weak points. If memory serves me correctly, after the first bank falls, we get into a market panic that lasts probably 3 months or longer of people speculating which banks is next.
Keep in mind that most banks are heavily leveraged. They lend out a lot of money. They can have a liquidity crisis the moment that investors and businesses decide to pull their money at the same time. That's how bank runs work. You can be profitable last year and have a bank run this year. Once the banks don't have enough cash liquidity on hand, they won't be able to operate. With the volatility we are seeing, there will be huge swings in the market causing higher margin requirements, which will further exacerbate the cash situation.
I don't say this lightly. Back in 2008, I was just in finance industry not even 2 years. The US financial world was collapsing around me. Bears and Lehman fell in what appeared to be a couple of weeks. 2 of the big 4 investment banks going under. Morgan Stanley was under pressure next. Speculation was that they were very close to ceasing operation and the fed really stepped in at the last moment to save Morgan Stanley. At the time, I was told that if MS went under, Goldman was next to fall. People not around the financial industry often don't realize how fragile the entire system is.
So, we are at another of those moment now. While people on this forum are focusing on inflation and de-industrialization, the most immediate problem facing the EU is financial sector. We are at a point where CS is talking to major investor right now to prevent a bank run. Just recently, CS had announced they were leaving the US market and laying off a whole bunch of people. The rapidly rising interest rates is something the banks aren't handling very well.
It's possible that CS will go under next week. It's unclear to me if swiss central bank stepping you can save them. Even if CS doesn't fall in the next month, there are several obvious suspects afterward. Deutsche bank is apparently having real issues too. Given the recent pension fund run that we saw in UK, Barclays and RBS are obvious weak points. If memory serves me correctly, after the first bank falls, we get into a market panic that lasts probably 3 months or longer of people speculating which banks is next.
Keep in mind that most banks are heavily leveraged. They lend out a lot of money. They can have a liquidity crisis the moment that investors and businesses decide to pull their money at the same time. That's how bank runs work. You can be profitable last year and have a bank run this year. Once the banks don't have enough cash liquidity on hand, they won't be able to operate. With the volatility we are seeing, there will be huge swings in the market causing higher margin requirements, which will further exacerbate the cash situation.
Sir did the European Central Bank has the ammunition to prevent such Financial catastrophic? a EU type TARP? with cascading value of the EURO? who will buy EURO Bonds? my thinking the only solution is to nationalized, hold it until the market situation improved.
Unless the European willingly sell their Industrial Jewels to the Americans for cheap....lol
Mmmm, I'm gonna assume this gonna be the real crisis unlike the whatever rumour from Henan.