The Economy

BTExpress · Oct 4, 2022

Hermes said: ↑

Another snapshot: I work a couple days a week at Wal-Mart to start saving up for my son’s college and the stuff is just piling up in back.
Click to expand...

Their 2-liter Diet Dr Thunder must not be piling up in the back. Its shelves have been empty for two weeks.

doctorquant · Oct 4, 2022

Dr Thunder would be one helluva good name for a laxative.

Regan MacNeil · Oct 4, 2022

Mountain Lightning better.

The Big Ragu · Oct 4, 2022

The Big Ragu said: ↑

BTW. ... remember when collaterlized debt obligations, or CDOs, became part of everyone's vocabulary when the housing bubble imploded? The term du jour is LDIs, or liability-driven investments.

When the Bank of England was forced to turn tail and go from talking about reducing the size of its balance sheet to a 180 degree turn to buying more assets last week, it was because of a crisis with British pension funds that were having their trouble meeting their obligations thanks to being robbed of yield for a decade and a half by their central bank, so they had been forced into leveraged bets (way more risk than a pension fund would otherwise take) to make up the yield they needed. They received a fixed rate of interest in return for paying the floating rate leg of an interest rate swap, and that works fine as long as rates stay steady. But with central banks tightening, yields went up very far, very fast, and they got margin calls forcing them to put up more cash (that they didn't have). And. ... crisis.

I bring this up. ... because a major question now is how much exposure Credit Suisse has to the UK Gilt and LDI. ... It's worth keeping an eye on Deutsche Bank, too, because its toxic balance sheet has forced it into similar behavior. And then there is the shadow banking system, which is actually much less regulated. What giant funds have exposure to leveraged products and are under stress right now?

It always comes back to leverage. And that is what mispriced debt -- artificially low interest rates -- create. It's all great while the bubble is being blown, they can just keep rolling over debt for no cost and keep growing the leverage and everyone is getting rich on paper on the back of the asset price inflation it creates. But having that as a "policy" has been beyond reckless, because there is a price to pay, even if you keep pushing it off, and the farther you push it off, the more economic misery that has to come with the price. In the case of Credit Suisse, it is listed as one of the 30 "globally significant banks" by the central banks of the world and the Bank of International Settlements (and were supposed to have better capital requirements as a result), so if they are close to failing, they will step in with more of what caused the debt bomb in the name of them being "too big to fail." The world never learns.
Click to expand...

UK’s Pension-Fund Tumult Was Years in the Making

heyabbott · Oct 4, 2022

1000 points under/over on the Dow rise the day Trump dies?

Inky_Wretch · Oct 4, 2022

Slacker said: ↑

I live in a van down by the river.
Click to expand...

#vanlife

Inky_Wretch · Oct 5, 2022

OPEC+ looking at a 1m per day oil cut. Those higher gas prices aren’t going to help things heading into the holidays.

wicked · Oct 5, 2022

The Big Ragu said: ↑

I don't know who these retailers are, but anyone with a strong balance sheet and little debt and can afford to sit on inventory could do pretty well. It's an industry that thinks in 12 month increments, but if there is anyone who can think in terms of 18 or 24 months, it's an opportunity to take market share from their competitors.
Click to expand...

Maybe we don't need new iPhones and new sneakers every week after all.

dixiehack · Oct 5, 2022

Most carriers have recently gone to 36 month contracts instead of 24, which makes me think Apple is going to have a helluva time with the iPhone 16 two autumns from now.

Hermes · Oct 5, 2022

wicked said: ↑

Maybe we don't need new iPhones and new sneakers every week after all.
Click to expand...

The craziest thing is every product I buy now is incredibly well made and durable. Even the cheap stuff. Yet we keep consuming more.

The new features on phones get less and less revolutionary by the generation. I still don’t want to give up my home button on my iPhone, so I refuse to upgrade. After this one breaks, I’m going full-on Jitterbug designed obsolescence and leaving modern technology behind for good.

The Big Ragu · Oct 7, 2022

https://www.cnbc.com/2022/10/07/new...-in-stock-but-they-come-at-a-steep-price.html

This was getting a lot of attention the other day:

https://www.cnbc.com/2022/10/06/growing-share-of-car-buyers-pays-1000-or-more-a-month-for-loans.html
Auto loan rates are surging alongside vehicle prices

14 percent of buyers last quarter had a monthly car loan payment of $1K or more. The average is more than $700 a month. Average interest rate on a new car loan is pushing 6 percent now, and on used cars the average is above 9 percent.

goalmouth · Oct 7, 2022

A few years ago I read about a coming mortgage-type meltdown in car loans that I guess never happened.

Log in or Sign up

The Economy

BTExpress Well-Known Member

doctorquant Well-Known Member

Regan MacNeil Well-Known Member

The Big Ragu Moderator Staff Member

heyabbott Well-Known Member

Inky_Wretch Well-Known Member

Inky_Wretch Well-Known Member

wicked Well-Known Member

dixiehack Well-Known Member

Hermes Well-Known Member

The Big Ragu Moderator Staff Member

goalmouth Well-Known Member

Share This Page

Log in or Sign up

The Economy

BTExpress Well-Known Member

doctorquant Well-Known Member

Regan MacNeil Well-Known Member

The Big Ragu Moderator Staff Member

heyabbott Well-Known Member

Inky_Wretch Well-Known Member

Inky_Wretch Well-Known Member

wicked Well-Known Member

dixiehack Well-Known Member

Hermes Well-Known Member

The Big Ragu Moderator Staff Member

goalmouth Well-Known Member

Share This Page

Useful Searches