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When speculation is accepted as the "business model" and people realize their theories didnt end the way they expect.
Pull up a chair and pass the butter, because the global economy is currently a five star disaster movie. It's the ultimate spectator sport, watching a financial system built on greed finally hit the credits. Might as well enjoy the front row seat to the collapse before the popcorn runs out!
Oh no we learn, it's just for some reason we never remove the class of people who keep doing this to us
Shadow banking is another word for Private credit. It's what it used to be called. And BIS has pointed out these problems for a long time – though to be fair that is not exactly MSM
Ponzi scheme basically
This only works while money flows in. The moment it stops, everything gets exposed.
Not been allow to retrieve your money from them bank should be classified as theft.
Oh no…. the rich people didnt learn their lesson while making obscene amounts of money. Let's bail them out and give them 2 more…. 10 more chances!
I really enjoy your channel. Thanks.
Why are people constantly surprised and confused at this today ?
It is because of the social and economic philosophy pushed out on society that always leads to long term problems:
Adam Smith's Concept Capitalism = TMS(Theory Moral Sentiments) + WN(Wealth Nations) ≠ Neoliberalism/'Libertarianism' WN ½ – TMS Substitution = Rent Seeking Corporatism → Enables Neofascism, creating scapegoats, "nostalgias" when shared interests confronted against.
Most of these economic rules and laws are made by "merchants and manufacturers" and passed/signed by corrupt politicians dependent from campaign lending deals without reading any suspected "law suggestions" for the deregulation against itself, making them unaccountable. The state then becomes the structural reflection of these big capital interests that Neoliberalism supports, not the majority of people that vote for them.
Real Free markets are bad for deregulated and consolidated oligopolies that despise competition from outside and inside in favor of concentrative market shares. Not only do they destroy the competition necessary for a free market to function, they also destroy labor and consumer rules that make society and families function for corporate and individual profit maximization where it still exists. Even John M. Keynes himself knew about this at the time.
Low Quality + Artificial High Prices + Monthly Subscriptions(rent) + Unregulated Financial Speculative Gambling: Derivatives/Options/Stock Buybacks/Real Estate Hedge Funding + Private Equity; produces low real social value for a productive economy to function efficiently in fact. Investment banking is not separated from Commercial banking as it should be separated so it distorts GDP real growth indicators with an added "false" value.
No surprise and wonder this all ends up in a Mandevillean Society, where all vices are seen as beneficial to everybody, no matter how bad they are morally, they provide somehow without an eventual self-destruction (it will).
Truly a system for suckers, negative (those who publicly believe it blindly) and very beneficial (for those who viciously institutionalize it). The social contract was transformed in such a way it creates a Negative Multiplier Effect for everyone.
Why do they ask for tax cuts and subsidies for the corporate rich to invest and expand businesses when they could just get a quick loan from the banks easily, with big returns to meet that real demand ? That sounds like a public deficit for the state budget waiting to happen with no gains whatsoever. It ends up being the justification for austerity against future debt, even for recessions .
What about labor, consumer and environment deregulations ? Wouldn't that make society worse off for the sake of individual profit "efficiency" against public/social decay externalization costs ? This makes it a bad place to live for families and their futures.
Why do they ramble about the "free market" when they eliminate antitrust regulations necessary for vast competition to function, creating oligopolies that can influence price setting and its own regulation with lobbying, defeating the whole main purpose ? "You watch your football games without a referee to catch cheaters and set boundaries ? Doesn't end well and everybody knows it"
You have no idea of what you're doing by defending it (or you do, and that is way worse which means you have no "impartial spectator" yourself, like the "meritocracy/prosperity pastors" that do).
This makes people functionally illiterate to their general economic situation but aware something is wrong. They are tricked later with random scapegoating and mass distractions of culture wars to look out for the responsables of such social degradation.
–Be "content" with what you are allowed to have and be happy about it, we don't even need to organize, I guess … am i right ?–
We are going to have to change the economic base if the political structure does not bother to do so.
No bail outs fafo.
I love how every description of these private equity and private loans all sound like pyramid schemes.
Purchased businesses that take on debt are shown as assets in the parent companies books. How TF is this legal? Its no different than what enron was doing.
Two weeks later and things have gotten so much worse thanks to this Iran bullshit. These PC and PE firms were playing roulette and it's time for them to crash
The system is broken as intended
The credit crisis was never fixed (over the last 20yrs), but that still pales into insignificance compared to economic incompetence at national level.
Almost every national economy on the planet is ran by an incompetent, misinformed, deluded idiot. (Manipulating the numbers to hide the scale of the problem)
Bro never used the McDonald's app. Why am I listening to this. Not relatable.
Thank you
Debt on debt on debt on debt. What could possibly go wrong. Man, greed is karma's closes sibling..
So just don't bail out the funds. Let them die.
Short term answer: No. Long answer: Probably not since banks have equity stored unlike before 2008 (ya know like Michael burry said to Atrioc in person when he asked this question a year or so ago)…
Ponzi… Is that you??
We never lear.
Money should be backed by value but now it's backed by debt!!! Was nice knowing you capitalism😂😂😂.
Private credit is something spoiled billionaires have created because they are too infintile to abide by simple rules the government makes so collapses like the one going on now doesnt happen. They are merely spoiled children who didnt get their way so they made their own. Let them drown in it.
Ah, private equity. Replicating the problems that China faces with shadow banking while trying to chase the sort of growth figures that China experienced in the 2000s and 2010s.
Privatized gains and socialized losses…
"…to bail out an industry that became to big to fail without anyone* noticing…"
* excepting the fact that everyone noticed, and pretty much every serious financial analysis channel made a point of highlighting its growing risks years ago. It's rarely the case that 'no-one noticed' the reality is that so many people in powerful positions stand to make so much money off of these high-risk systems before them implode, that they're willing to say and spend almost anything to keep people – particularly regulators – looking the other way until it is simply too late to do anything about it until it turns into a major crisis. This is one of the greatest failings of the entire capital system – its incentive is to turn a blind eye to future risks, ESPECIALLY when those risks are large and systemic.
ugh. too big to fail.
if a business is too big to fail and 'bailed out' with taxpayer money, it should also be deemed too big to exist and split into smaller companies.
I mean, the government is meddling in private business and therefore jacking with the free market, so we may as well keep going. split them up into smaller entities that can individually fail if that's what the market deems appropriate.
The fact that US treasury bonds yielded up and not down told me we’re heading for a painful recession.
One of the many things that infuriates me about rich people is how they think poor people are reckless and irresponsible with their money, yet the rich are the ones constantly throwing millions around on gambles and nonsense.
So what?! 🤷♀️
Should retail investors sell all risky assets to avoid the collapse?
I love the aside about how bank regulation that limited banks riskiness in the wake of their being too big to fail was a bad thing, even though the part of their business that was picked up by private equity and private credit is leading to another economic crash. Maybe the regulation isn’t the problem! Just a thought. lol
This is financial sensationalism – you started with a premise and rationalized it throughout. Redemption requests are high bc of this kind of media coverage + 20% of the float is retail driven due the lower minimums. They are gating requests at 5% as to not raise liquidity and sell assets at a discount. The 5% quarterly gates are a feature not a bug and communicated to any investor on the front end. I’m buying asset managers at these levels. We’ll see who’s right.
It's almost like the people in charge are crooks that aren't particularly bright.
Look, I'm no finance guy but Why is this even legal? Building a whole economy on "yo bro can I borrow money" is not a good plan. Bank like institutions should be the backbone and not random privats.
This is what the war in Iran is supposed to distract us from
Creditors are protected by their LLC or business structure. There is no risk to the individuals who created the mess. Thats the bottom line cause and issue. Well, probably over simplified, if they thought they could get caught, be subject to life altering consequences (ie long term jail sentence, or seizure of their personal assets amassed through their bad business dealings) then this wouldnt happen. White collar crime and blue collar crime is unfortunately a very real distinction. I think the best visual I can think of, that is not mentioned here, is an upside down pyramid, the bigger it grows the more unbalanced it becomes all on a small tip, which is at the bottom.
The voice and pace of narrating is too jarring to continue video
to me, this looks like rather than have a ponzi scheme in a finance system, you now have a finance system as a ponzi scheme. & the very second the loop breaks, well, the train wreck makes regular train wrecks like like a toddler playing with a choo choo train.
TICK…….TOCK!
JUDGEMENT IS COMING!!
I believe two countries have pulled a long term investment and purchasing/running top finance companies. Which took decades to get it where we are now. Now take the influence of said countries political views and pure intent to crash the American economy quietly, this would be the way to do it. I think this is going to become a new standard of investigation on company ownerships and who is purely pulling the strings? I probably sound absolutely stupid. I’m sorry if I do,it’s my honest theory. Since regular war is going to cost more and the loses being much higher. So why not quietly gain the trust and money of a giant company to literally change our economy slowly but chop at it along the way just enough to not be seen outright. Yet. The whole trump thing is so bad. He will do anything for money. Totally illegal. But for this reason as well, totally could be a Trojan horse of a bribe and what sounds good is truly horrific. Take that with how little he seems to pay attention to anything, and you’ve got yourself a puppet for any country to step in and manipulate our anything. Taking bribes is actually a real weak position for anyone. It’s like the lowest form of business in fact it’s not business. Anyway bribes are seen mostly as hidden advantages. Looking at who TAKES the bribe is never looked at. It’s all weakness from the bribe takers side and shows holes in their ability to do their job. But OPENLY TAKING BRIBES AND INVITING THEM. Whole new level of corruption and targets on our backs. Fully.
A drop in the bucket compared to the $188 BILLION American's got taxed to send over to Ukraine. Only half of which zelensky said he even received, and of that he bought his 8th yacht and 90% of the small arms and rocket launchers we sent were redirected and sold on the black market in sri lanka.
It's a whole corrupt system designed to extract the resources from the American people and it's unfortunately working fantastically well.
House of Cards. Musical chairs where the person guaranteed to lose their chair will yet again be the regular people.
We are screwed…