Just how bad is the corporate debt and bank debt?

[Parker99]

I read that there is lot of banks in the US and the world yes small, medium and big banks that have massive debt problem and it been going on for years and years and getting worse. I ask just how bad the problem is and could it crash and cause bank run on like in Argentina?

Also what about the corporate debt problem?

 

[pknopp]

A crash will happen again. We refuse to address our issues.

 

[1srelluc]

Link?

 

[pknopp]

Link?

Here is one.

https://finance.yahoo.com/news/u-banks-sitting-750-billion-140013188.html

 

[1srelluc]

Here is one.

https://finance.yahoo.com/news/u-banks-sitting-750-billion-140013188.html

OK, there was a discussion about that on Kudlow's show and such debt was just a small part of their total worth.....I believe they said something like 2-4% but I could be wrong.

 

[pknopp]

OK, there was a discussion about that on Kudlow's show and such debt was just a small part of their total worth.....I believe they said something like 2-4% but I could be wrong.

I am no expert but 2-4% would make their total worth more than likely even exists.

 

[1srelluc]

I am no expert but 2-4% would make their total worth more than likely even exists.

I can't say as I heard it in the car so there were no visuals to go by.

 

[Kruska]

I read that there is lot of banks in the US and the world yes small, medium and big banks that have massive debt problem and it been going on for years and years and getting worse. I ask just how bad the problem is and could it crash and cause bank run on like in Argentina?

Also what about the corporate debt problem?

Well, so far it has been working out on the continuous practicing of - print money, economic crash, print more money, more economic crashes, print even more money.............

 

[Cassandro]

what about the corporate debt problem?

Corporate debt becomes a problem when there is insufficient cash flow to service or restructure it.

 

[Toddsterpatriot]

I read that there is lot of banks in the US and the world yes small, medium and big banks that have massive debt problem and it been going on for years and years and getting worse. I ask just how bad the problem is and could it crash and cause bank run on like in Argentina?

Also what about the corporate debt problem?

The banks don't have a debt problem, they have a "the bonds we bought have dropped in value" problem.

 

[Captain Caveman]

Well, so far it has been working out on the continuous practicing of - print money, economic crash, print more money, more economic crashes, print even more money.............

Countries wouldn't have these problems if banks and governments could, "Live within their means".

 

[Kruska]

Countries wouldn't have these problems if banks and governments could, "Live within their means".

Yes sure, but you forgot the "consumers" - who believe that taking up debts makes their lives more precious.

 

[Captain Caveman]

Yes sure, but you forgot the "consumers" - who believe that taking up debts makes their lives more precious.

As long as you can service it, you should use debt and not your capital

Thickos can't.

 

[Captain Caveman]

Here in the UK, if someone needs a new boiler for the home, don't use savings, use the British Gas 0% finance repayment scheme. Ok, the cost is overall more, but say it's £130 per month, would someone spending their savings put £130 a month back into their account. No chance.

Government did bounce back loan through your bank for COVID, you could apply for up to 80% of your profits as a 2.63% loan. Mine is sat in a 5.04% savings account!! I think there's about 18 payments to go. I have a small surplus pension that comes in. That covers the repayments and I get 5.04% on the thousands in the bank.

 

[Kruska]

As long as you can service it, you should use debt and not your capital

Thickos can't.

Well that's exactly the issue - private consumers and industrial lenders end up NOT being able to service their debts. And they have been brainwashed to the extend that many don't even realize as to what an interest rate is, nor as to how much they are factually paying.

It all started in the USA in the mid to late 70'ies - in order to push consumer spending - the banks started to grant credits onto more or less any goods.

Remember 1980? a 17-25% interest rate onto an e.g. credit for a car in the USA!!! Whilst in Europe at the time no bank was even willing to grant a credit for buying a car. However from the late 80'ies onward they started telling consumers - why cash or save? take a credit, only 10-14% interest. - And upon this, the governments in Europe or e.g. Germany started to get a real liking towards this proposal.

 

[Captain Caveman]

Well that's exactly the issue - private consumers and industrial lenders end up NOT being able to service their debts. And they have been brainwashed to the extend that many don't even realize as to what an interest rate is, nor as to how much they are factually paying.

It all started in the USA in the mid to late 70'ies - in order to push consumer spending - the banks started to grant credits onto more or less any goods.

Remember 1980? a 17-25% interest rate onto an e.g. credit for a car in the USA!!! Whilst in Europe at the time no bank was even willing to grant a credit for buying a car. However from the late 80'ies onward they started telling consumers - why cash or save? take a credit, only 10-14% interest. - And upon this, the governments in Europe or e.g. Germany started to get a real liking towards this proposal.

Leading up to the 2008 collapse, banks here were giving 120% mortgages to folk that had no means to pay it back. So straight away, 20% negative equity in parts of the housing market.

And as you know, who foots the bill? The tax payer.

I think interest rates hit about 13%, or probably more at one point in the UK. My eldest son was buying his first home and he asked me for advice. I told him to get the lenders to base their quotes on a 13% interest rate, because if you can't afford that, don't get the mortgage of that size because in the future if rates get to that level again, you're screwed. Then put down as small as a deposit you can and see what % overpayments you can make.

 

[Kruska]

Leading up to the 2008 collapse, banks here were giving 120% mortgages to folk that had no means to pay it back. So straight away, 20% negative equity in parts of the housing market.

And as you know, who foots the bill? The tax payer.

I think interest rates hit about 13%, or probably more at one point in the UK. My eldest son was buying his first home and he asked me for advice. I told him to get the lenders to base their quotes on a 13% interest rate, because if you can't afford that, don't get the mortgage of that size because in the future if rates get to that level again, you're screwed. Then put down as small as a deposit you can and see what % overpayments you can make.

The average interest rate for a house/construction loan in Germany from the 60'ies to 2010 was around 5% - if more or like your UK example, I guess construction or the property market in Germany would have abruptly ended. A friend of mine bought a house in Bristol in 1981/82, so I am quite familiar with the "specifics" of the British property market.

From 2014 to 2024 those finance institution gangsters - offered housing loans at an average of 1.0% for a fixed period of 10 years. What most people never realized was that due to those extreme low interest-rates - those who already possessed property - and especially property developers simply hiked up market prices by almost 100%.

Now starting from 2024 - those property prices have already dropped at an average of 25% + the average interest rate after that binding 10 years period, are now at around 3.5%, and naturally people ain't able to service these loans which increased upon a previous monthly rate by 350%!!! - therefore the banks are now "restructuring" these left to be serviced loans - with the debtor lastly ending up with a 50% increase in view of the new debtor sum - and are paying 3-4% interest.

They basically got all whacked&screwed - but If someone told them so in e.g. 2014/15 - they simply wouldn't listen.

 

[Parker99]

Here is one.

https://finance.yahoo.com/news/u-banks-sitting-750-billion-140013188.html

That seems to be talking about U.S. Banks Sitting on $750 billion In Losses On Real Estate.

 

[luiza]

The banks don't have a debt problem, they have a "the bonds we bought have dropped in value" problem.

Which is what is known as a Problem of Debt

 

[Toddsterpatriot]

Which is what is known as a Problem of Debt

Their problem isn't their debt, their problem is their investments.