Moody's Cuts U.S. Banking System To Negative

[Thunk]

that's when we went over the cliff. Just waitin' on gravity to finish the job, now.

 

[Thunk]

There's just so much bullshit reporting.

WHAT???

You don't follow jim cramer religiously???

 

[multivita-man]

That process was greatly accelerated when Biden decided to go after Bin Salman. When the Saudis began trading oil in Yuan, that's when we went over the cliff. Just waitin' on gravity to finish the job, now.

I think a slow decline or rebalancing is inevitable - that's neither surprising or alarming. There are already other reserve currencies, especially on a regional basis. The Euro is a reserve currency. The Yuan is now a reserve currency. The Japanese Yen has been one for a while. The Pound is one. It's just that ours has the widest coverage, and much of our budget is financed by the fact that we have this recognition.

Currencies are backed by the goods and services that are produced and sold by or in the United States. The dollar is the reserve currency because we make and sell shit the world wants, and because we have selling power and because we have a wealthy nation, we have buying power. So when we deal with other nations, we can say, "Put that contract in USD." And other countries buy our treasuries because they know -- for now -- that we'll make good on our debt obligations. The moment these conditions change (hello debt ceiling crisis), then we have a problem.

A default on bonds would be much, much worse than, say, a gradual weakening of American economic prowess because bondholders present and future would no longer trust the political system to honor and give full faith and credit to its currency. That would be financial suicide. If conservatives want to play hardball when it comes to negotiating budget cuts, I'm fine with that -- but not by holding our bonds hostage. There's the budget negotiations process. They can have a shutdown if they want one. But don't fuck with our currency.

 

[multivita-man]

WHAT???

You don't follow jim cramer religiously???

God, just fuck that guy (I don't mean literally, lol).

 

[multivita-man]

Here's another guy who's really, really good at explaining these sorts of things as though you/we are 5 (which I am when it comes to corporate finance). Patrick Boyle is great - highly recommend his YT channel.

 

[Sunsettommy]

What are people going to run to - Bitcoin? The RMB?

I do expect some hedging to things like the Yen, RMB, Euro, but I don't think this downgrade alone would do it. What worries me more is the debt ceiling, but now in addition to this, the bailout is basically a form of quantitative easing, as we are using Fed money to keep conditions loose -- not for individual lowlifes like me, but for fucking multimillionaire venture capitalists. We're bailing out rich people at a time when inflation is hardly tamed. That effectively does put more pressure on the credibility of our financial system.

What about Credit Unions?

The one I use didn't lose a penny to the dumb Housing loan bubble because they saw it as lousy loan practice.

 

[multivita-man]

What about Credit Unions?

The one I use didn't lose a penny to the dumb Housing loan bubble because they saw it as lousy loan practice.

I have no familiarity with CUs but good on you. I think we were talking more about currency rather than the individual banks within the system.

But there's definitely value in reminding people they don't need to bank with these fast-and-loose institutions that are out there.

 

[Thunk]

Please post if you're having any problems with your bank.

I'm reading a few 2nd hand reports of ATM's limit has changed from $600 to $200.

Another person claims his bank is "down for maintenance" until noon tomorrow and he can't buy groceries.

I saw on FBN this afternoon that the credit-default-swaps spiked higher on wells fargo...that was a bit disconcerting.

 

[DudleySmith]

lol bankers are the loons that want everybody using plastic and electronic bill paying, direct deposits, etc., and do away with cash. lol lol lol and there are a lot of morons doing that. dumbasses.

 

[DudleySmith]

These private rating agencies can be bribed, as we know from Standard and Poor's handing out AAA+ ratings to banks holding all those tranches with unknown amounts of bad paper in them. You can't trust any Wall Street associated business to be honest and telling the truth, any more than you can believe their 10K's or auditors like those Willie Nelson hired. lol

 

[DudleySmith]

Please post if you're having any problems with your bank.

I'm reading a few 2nd hand reports of ATM's limit has changed from $600 to $200.

Another person claims his bank is "down for maintenance" until noon tomorrow and he can't buy groceries.

I saw on FBN this afternoon that the credit-default-swaps spiked higher on wells fargo...that was a bit disconcerting.

I just drew $1,200 from my Wells Fargo ATM this morning. Didn't see any big lines of cars and people doing a run the banks here.

 

[DudleySmith]

Ironically, bitcoin is up big today. Obiviously an even MORE unregulated industry is the answer. Duh

It's just gambling, same as doing it at a casino. Nobody has a clue as to what these companies are really worth.

 

[DudleySmith]

Moody's $864m penalty for ratings in run-up to 2008 financial crisis

Payout to US justice department, 21 states and District of Columbia for risky mortgage securities ratings before stock market crash

www.theguardian.com

The credit rating agency Moody’s has agreed to pay nearly $864m to settle with US federal and state authorities over its ratings of risky mortgage securities in the run-up to the 2008 financial crisis, the department of justice said on Friday.

There is very little hard news out there re businesses and markets.

 

[georgephillip]

The Next Bomb...?

The Next Bomb to Go Off in the Banking Crisis Will Be Derivatives

"The most recent quarterly derivatives report from the U.S. regulator of national banks, the Office of the Comptroller of the Currency (OCC), found that as of September 30, 2022 four U.S. mega banks held 88.6 percent of all notional amounts of derivatives in the U.S. banking system.

"The total notional amount for all banks was $195 trillion.

"JPMorgan Chase held $54.3 trillion of that; Goldman Sachs held $50.97 trillion; Citigroup’s Citibank held $46 trillion; and Bank of America held $21.6 trillion.

"Even though the Dodd-Frank legislation required that most of these derivative trades move to central clearing, as of September 30, 2022 the OCC report found that 58.3 percent of these derivatives were not being centrally-cleared, meaning they were over-the-counter (OTC) private contracts between counterparties, thus adding another layer of opacity to an unaccountable system."

 

[Ringo]

"Capitalism is so great, that every four to seven years it must be saved by socialism for the super-rich."

 

[Ringo]

Yesterday I found out an interesting fact - Ayn Rand, the author of "Atlas Shrugged"(you know, the free capitalist market manifesto) in her old age appealed to the U.S. government to provide her with state treatment, since she could not afford paid medicine.
What a way to shrugg!

 

[georgephillip]

"Capitalism is so great, that every four to seven years it must be saved by socialism for the super-rich."

"The Argument​

"A core tenant of the theory of capitalism and a free market is competition.

"However, in reality, capitalism eliminates competition by allowing monopolies. Monopolies form by crushing small companies or through mergers and acquisitions.

"This decreases competition and harms consumers' rights by letting those few corporations set price and quality standards.[1]

"They also have excessive political influence through campaign donations, lobbying, and the propaganda they can create."

Capitalism is ineffective and unstable - Encyclopedia of Opinion.

 

[Ringo]

"A core tenant of the theory of capitalism and a free market is competition.

"However, in reality, capitalism eliminates competition by allowing monopolies. Monopolies form by crushing small companies or through mergers and acquisitions.

https://www.marxists.org/archive/lenin/works/1916/imp-hsc/imperialism.pdf

 

[georgephillip]

https://www.marxists.org/archive/lenin/works/1916/imp-hsc/imperialism.pdf

If Wikipedia is correct, Lenin's original title for this work was "Imperialism, the Newest Stage of Capitalism." First published in 1917 about the same time US "doughboys" arrived in Europe to play their role in the "War to End all Wars":

Imperialism, the Highest Stage of Capitalism - Wikipedia

"It describes the formation of oligopoly, by the interlacing of bank and industrial capital, in order to create a financial oligarchy, and explains the function of financial capital in generating profits from the exploitation colonialism inherent to imperialism, as the final stage of capitalism.

"The essay synthesises Lenin's developments of Karl Marx's theories of political economy in Das Kapital (1867).[2]"

 

[multivita-man]

If Wikipedia is correct, Lenin's original title for this work was "Imperialism, the Newest Stage of Capitalism." First published in 1917 about the same time US "doughboys" arrived in Europe to play their role in the "War to End all Wars":

Imperialism, the Highest Stage of Capitalism - Wikipedia

"It describes the formation of oligopoly, by the interlacing of bank and industrial capital, in order to create a financial oligarchy, and explains the function of financial capital in generating profits from the exploitation colonialism inherent to imperialism, as the final stage of capitalism.

"The essay synthesises Lenin's developments of Karl Marx's theories of political economy in Das Kapital (1867).[2]"

Thank you for this. A lot of people throw around terms like Marxist, as though Karl Marx actually invented communism as some sort of regime blueprint. Marx was basically a philosopher who pointed out how capitalism leads to class struggle and also how profits inevitably fall over time, leading to a "crisis of capitalism." Marx was a supporter of the labor movement, and Das Kapital was basically an attempt to make a philosophical/scientific basis for an economy in which laborers had more support and power.