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Misc
2023 Oct 9, 5:59am
gabbar says
With banks there are dozens of regulators embedded in the banks themselves. With the TBTF there are hundreds embedded, The regulators don't really question the banks. They simply review the numbers provided. It takes a little work to get fraudulent numbers into the system.
Misc says
Some people know the extent that the banks are simply lying on their quarterly financials
How does one know that every company is not lying on their earnings reports? No one is checking it, right? If someone/somebody is checking the numbers, how accurate are these checks? And the impacts of deliberately playing with numbers?
With banks there are dozens of regulators embedded in the banks themselves. With the TBTF there are hundreds embedded, The regulators don't really question the banks. They simply review the numbers provided. It takes a little work to get fraudulent numbers into the system.
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Some mainstream economist crunched the figures and came up with a $620 billion dollar hit to the banks balance sheets if these were marked to market. That is if they needed to be sold.
We haven't even gotten to the fun part yet. That's when borrowers start to not pay back their loans because they ran out of money they could borrow on their credit lines. Credit spreads are widening especially for junk bonds. They are now over a 5% spread to treasuries. That means companies are borrowing at about a rate of 8-9%. Companies trying to roll-over their outstanding debt are gonna find that they just can't pencil in anything except for losses at these new rates. Credit is simply going to dry up for a large swath of corporations.
Good luck to all with your investments.
https://www.axios.com/2023/03/21/high-yield-bond-spreads-show-increasing-recession-jitters