19-03-2023, 06:12 PM
Here is what happened.
After Financial crisis and Euro Crisis many of these banks with substantial bad debts were identified. Because of the enormous cost of cleaning up all these banks, the govt would do piecemeal bailouts whenever a bank gets into problem to just kick the can down the road.
Because of low interest rate and benign economic conditions the problem was manageable with ocxasional bail outs.
But once the is a major economic recession or financial market stress. The whole thing can blowup.
I am not saying for sure this is the Lehman moment for the current situation but the last 10-15 years of easy money has bred many potential black swans that can suddenly show up.
Until last week we have never heard of SVB and Signature Bank. ...yet pundits dare to come out to say these there is no contagion when none of them foresaw the collapse of these banks. How can we trust them to be right.
Sometimes when you see a few termites, you whole wooden house structure has already rotted away....and you don't know.
https://internationalbanker.com/banking/...overnments.
After Financial crisis and Euro Crisis many of these banks with substantial bad debts were identified. Because of the enormous cost of cleaning up all these banks, the govt would do piecemeal bailouts whenever a bank gets into problem to just kick the can down the road.
Because of low interest rate and benign economic conditions the problem was manageable with ocxasional bail outs.
But once the is a major economic recession or financial market stress. The whole thing can blowup.
I am not saying for sure this is the Lehman moment for the current situation but the last 10-15 years of easy money has bred many potential black swans that can suddenly show up.
Until last week we have never heard of SVB and Signature Bank. ...yet pundits dare to come out to say these there is no contagion when none of them foresaw the collapse of these banks. How can we trust them to be right.
Sometimes when you see a few termites, you whole wooden house structure has already rotted away....and you don't know.
https://internationalbanker.com/banking/...overnments.
