/biz/ - Business & Finance

[Anonymous No.58305829]

>Agencies should revise [the supplementary leverage ratio] to permanently exclude on-balance sheet U.S. Treasuries from total leverage exposure
Geez, it would be a shame if banks overleveraged on USTs, then with China decides not to bail out property developers, market sold their Treasury holdings all at once during the chaos.

What could go wrong?

[Anonymous No.58305880]

Dear Sir/Madam,

It appears that you have made a post on the business and finance board (/biz/) that requires an IQ in the triple digits to understand. As an official /biz/ ambassador, with an IQ in the single digits, I would like to officially notify you that your thread will be ignored without any further responses.

In the future, please attach a garbage shitcoin ticker to your post to avoid a repeat of this unfortunate scenario.

Yours truly,
Niggersneed.

[Anonymous No.58305983]

>>58305829
>it would be a shame if banks overleveraged on USTs, then with China decides not to bail out property developers, market sold their Treasury holdings
I would be more worried if I hadn't heard this every day for the past 15 years. its like the 3 gorges dam.

>>58305880
kek, based

[Anonymous No.58306022]

>>58305829
So if I'm reading this right, the ISDA recognizes there's a significant risk to USTs if China decides to let part of its economy falter, forcing the companies comprising that portion of the economy to sell whatever liquid assets they can to pay their debts, which happen to be <big number> of USTs which are largely considered the safest investment around, which would cause yields to rocket upwards as the price drops, albeit temporarily, which would also cause the balance sheets of banks in the US that are heavily laden with USTs to come into technical default or some such without revisions to the rules around reserve requirements, causing another huge liquidity crunch like in '08?

Or am I retarded?

[Anonymous No.58306048]

>>58306022
1997 Asian financial crisis 2.0,

[Anonymous No.58306054]

>>58305829
this means every bank in the united states can just print money to buy treasury bonds
every single bank in the US becomes the Federal Reserve
the US dollar is a literal walking corpse

[Anonymous No.58306115]

>>58305829
>>58306022
Treasuries have no risk to banks because the gov will just back stop all treasuries with "liquidity" programs like the BTFP which basically just allows treasuries to be monetized at any time needed. Its just a continuation of the slow but steady monetization of the fractional reserve system.

>>58306054
Basically this, they will just let long term gov debt be converted to dollars at face value / no loss at any time. Nothing will collapse it will just be more steady inflation and devaluation of the currency.

[Anonymous No.58306915]

>>58306115
>>58306054
Banks don't print money though. It means they can use more leverage to buy U.S. treasuries if approved. However, this a death rattle and if China really has been slurping treasuries the last several decades as a 4D play to dump them when the U.S. is most vulnerable after businesses and institutions are weakened from their chinese paper going to zero, it would be a premeditated bloodbath. See pic rel on the already weakened state.

>>58305983
You may have been 15 years early, it doesn't mean its wrong.

[Anonymous No.58307093]

>>58306915
>Banks don't print money though.
they do
through credit
and with this new SLR they basically become the FED

[Anonymous No.58307109]

>>58305983
>I would be more worried if I hadn't heard this every day for the past 15 years
the SLR exemption is from 2020
what the fuck are you talking about

[Anonymous No.58307115]

>>58306048
nothing alike

[Anonymous No.58307138]

>>58307115
Then you're missing the bigger picture, and no I'm not going to sit here and explain it to you.

[Anonymous No.58307147]

>>58307093
SLR just means they can USE more LEVERAGE it does NOT mean they become a FEDERAL PRINTER. DERIVATIVE CREDITS is NOT printed FIAT and banks still need ASSETS TO LIABILITIES.

CAPITALS BECAUSE I HAVE TO REPEAT A SIMPLE FACT TO YOU

[Anonymous No.58307276]

>>58307147
my boy, they print through credit lending
the only vehicles of money printing in the world are commercial banks making money through loans and bond issuance

[Anonymous No.58307284]

>>58307276
forgot a comma there
comercial bank loans
and
gov/ enterprise bond issuance

[Anonymous No.58307617]

>>58307276
>Whole life flashes before my eyes
>Eventually ended up leading to this convo
Wait, so you're telling me fiat is just backed on the belief of its value of exchange?

[Anonymous No.58307940]

>>58305880
Based and yes i don't fucking understand. honestly all i know about economy is surface level at best
hell i made a x7 with jizzlord but out of pure chance rather than some super genius prediction shit. my thought process literally was "hehe cum coin", invested and well... it worked out pretty well for me.

[Anonymous No.58309186]

>>58306915
>>58307276
Depends what you mean "print money," banks absolutely create money. But "printing" money is usually when people describe currency debasement like printing new bills or increasing central bank reserves without an asset exchange. The fed absolutely does this as well, its just not usually a thing you would call commercial banks doing even if they create most of the circulating money individuals use.

[Anonymous No.58309954]

>>58305880
You're doing God's work, Niggersneed!

[Anonymous No.58310088]

>>58306022
So I suppose the situation is different from '08 because if it's USTs we're talking about, that market's highly regulated. '08 happened because of the non-cash accounting rule changes the FASB made forcing banks to mark-to-market un-regulated derivatives on their balance sheets which made it appear that they had fewer assets than they actually had, which forced them all to simultaneously sell good assets in order to raise their reserves to meet requirements so they could continue lending, which of course tanked the price of those good assets, causing all but the first ones selling to have to sell *more* to meet their own requirements. Hence, the liquidity crunch. Almost all of the assets being dumped were fine, but they couldn't be used to fulfill reserve requirements to keep the bank able to lend unless they were turned to cash or the like. So no one could get credit, which is what *everything* runs on. In that case, two whales could agree to buy/sell some of their CDSs for 10% of what they're actually worth (because it was an unregulated market), and it would cause ALL the institutions with CDSs on their books to mark them down to that price, causing their reserve problems which cascaded to everything else. But it was all done on purpose by the FASB's rule 157 and 158.

The same thing couldn't happen with treasuries because the market's regulated and they couldn't be manipulated so easily. Then again, we're officially in soviet clown world, so honestly they can just do whatever they want and say it's whatever they want

[¥ VEIL PROJECT No.58310168]

>>58305880
holy kek, you’re not wrong but you’re wrong

[Anonymous No.58310370]

>>58307109
I think he means the china dumping treasuries thing. I remember bringing it up in a uni tutorial ten years ago lol.

[Anonymous No.58310391]

>>58310370
Plus now with Tether to absorb US Treasuries demand and the US having a plurality of crypto hash rate the risk to the dollar is minimum. What's the alternative, fucking CNY?

[Anonymous No.58310417]

>>58310088
>honestly they can just do whatever they want and say it's whatever they want
Yes, that's my takeaway these days. I think they still leave hints about what they're going to do though. A well honed schizo sense is the best tool for navigating the markets.

[Anonymous No.58310463]

The fed would absorb it all. It’s a literal nothingburger, chuds! this was gossip back in 2015. If they were so serious about it, they’d pivot to Japan. Let the jpy debalaue to 350 like before plaza accord and make the 80s great again. Japan has the technology and know-how to make semiconductors. Usa buys it from them using usd which Japan can then use to buy whatever it needs on the global market. Bidenomics wins again, Magatards!

[Anonymous No.58310692]

>>58310088
The bad assets in 2008 was mortgages, and the gov just backstopped it all, which is why it only lasted a year or two but at the cost of long term money supply inflation and moral hazard of bailing out the private banking with public funds.

>>58310463
Its a nothingburger in the sense that they are just preemptively bailing out long duration treasuries in the same way, just before an crash even happens. There will not be a crash like 08, but there will be even more long term inflation and funneling of public funds into the banking system.

[Anonymous No.58311496]

>>58310463
>>58306115
>>58310692
Inflation is the final cheat code in getting public acceptance of taxation.

[Anonymous No.58311626]

>>58305829
Holy shit, even more stealth inflation? What are they thinking? I understand wanting to incentivize banks to buy treasuries but not even counting them on the leverage ratio? This could royally explode. I thought overnight repo was bad, but this is much much fucking worse.
God help us. We're at the mercy of retards.

[Anonymous No.58311650]

>>58307940
If banks can exclude treasuries from calculating their leverage ratio they can leverage as hard as they want on treasuries without being penalized. There's no limit. This will print so much fucking money it will be like 8x 2020. Not a joke. And the banks will do it, too. Because it's free money for them. What is the fed gonna do, not pay its bills?

[Anonymous No.58311656]

>>58307617
Yes

[Anonymous No.58311694]

Thirdies mad as hell.

[Anonymous No.58311717]

>>58311694
>USD inflation doesn't affect Americans
You sure?

[Anonymous No.58311734]

How high can it get?

[Anonymous No.58311768]

>>58311734
I can't figure out why they would do this. The dollar is already on life support. Maybe the schizos are right and they hyperinflating to switch over to a CBDC. We Zimbabwe now. Full steam ahead.

[Anonymous No.58312583]

>>58311768
Because the choice at this point is triggering an acute, deflationary reset, or try to push out the restructuring of debt through inflation over a longer time period. Now the entire pretext for submitting to centralized, government control of the money supply is that the government somehow must know better than the free market when it comes to debt cycles and will be able to prevent things like the great depression. So having a banking system collapse is basically calling into the question the entire point of modern monetary politics. The automatic decisions is to print more money to prevent the one issue their entire existence was to prevent, even if it causes more problems over time. People may only put up with it because the pain is extended over longer time, like boiling frogs. But it maintains the existing fiat system.

[Anonymous No.58313854]

>>58312583
>Deflationary reset
'Member when they discontinued H3 at the start of COVID? I member. Nothing about this scenario is indicative of deflation at all.

[Anonymous No.58313875]

>>58312583
U.S. debt is not actively being removed from the system, money being sidelined by institutions is a decrease in money velocity, its not deflation at all.

[Anonymous No.58313902]

>>58312583
Oh, and finally, more proof of wee-mars that will cause a debasement into bitcoin and gold. BTC ETF took on a whole bunch of new institutional clients last night and gold is mooning.

>2 MoRe WeEks guuuhhh pffftttpptttpptthhhh
Its already happening.

[Anonymous No.58314328]

>>58313854
>>58313875
I dunno if you're agreeing with me or misunderstood, I don't think there is going to be deflation. I'm pointing out that the actions needed to control inflation would collapse the banking system and trigger a much bigger deflation, so the government is basically forced into supply inflation (as your data shows) and is relying on a hail mary of economic growth at this point to increase abundance, probably combined with changes in CPI methodology, to reduce CPI "inflation" so people are placated by the metrics and won't lose confidence in the currency right away.

>>58313902
Yes, its happening, but slowly. It takes most people a while to "get bitcoin," its going to be a process over many years, maybe decades as it seems to be a generational thing as well. Which is probably for the best, a rapid collapse of the dollar wouldn't be very pleasant even as a bitcoin holder. A smooth transition is better.

[Anonymous No.58314428]

>>58309186
>usually when people describe currency debasement like printing new bills
yes
>or increasing central bank reserves without an asset exchange
they never do that, they always conjure money to purchase bonds/ securities
>its just not usually a thing you would call commercial banks doing even if they create most of the circulating money individuals use
but that's where most of the debasement happens
the FED fixes rates to a point where money creation becomes too easy to repay, and if rates spike they can conjure the money to buy those bonds and avoid spikes
THAT'S the problem with central banking
and what this guy >>58307617 doesn't get, it's that if the new SLR rule allows them to just exclude treasuries from the reserve ratio, it essentially means they have infinite credit to purchase treasuries
the rule change is to IGNORE it from the balance sheet altogether
https://twitter.com/heresyfinancial/status/1768066871344210020

the government then can do QE through any US bank, not just the FED

[Anonymous No.58314443]

>>58311694
???
this is about US banks
why are you talking about the third world????

[Anonymous No.58315050]

>>58314428
>they never do that, they always conjure money to purchase bonds/ securities
Of course. But usually they create money to buy something, aka asset exchange. Like if the money was pegged to gold, it wouldn't be "printing money" to create money as long as it was only created in proportion to the amount of gold bought with the created money. Obviously fiat isn't pegged to anything though and they buy assets denominated in their own liability so its circulating "backing," its just how they used to hand wave about how its not printing money. But during covid they went mask off and fully admitted to money printing verbatim lol back when they though inflation would never come back again for some retarded reason.

[Anonymous No.58315134]

is this related to this?
>https://archive.4plebs.org/pol/thread/459186908

[Anonymous No.58315142]

So basically America will be fine and everywhere else will be fucked because they use dollars along with their own worthless currency too?

[Anonymous No.58315172]

>>58314443
He fell for the
>US just exports inflation
Meme.

[Anonymous No.58315267]

>>58315134
no
that thread is just some dude rambling over total net liquidity (which does matter)
altering SLR rules have a more immediate short term consequence

[Anonymous No.58315373]

>>58314328
I'm partially agreeing with you. I agree that attempting to reel in inflation at this stage would cause a banking collapse, which is why the U.S. government doesn't show intent to slow inflation at all and thus have been snowballing themselves for decades into a hyperinflationary event, Come 2020, both the FED (printing) and institutional entities (credit derivers) (Looking at you >>58314428)
threw up their arms against reasonable fiscal policy and went for the whole cradle in a liquidity grab under the guise of "supply chain shock" which exacerbated the circumstance then pointed the finger at gibs receivers. And instead, like you said and I agree, changed the metric from 1980s Standard, to CPI, to CPI adjusted, to CPI adjusted (minus food and housing), to whatever truflation is that commercial media and glowies here keep pushing to make things look nice and dandy but burgerclaps like >>58315142 cant help but notice their McChickens keep increasing in price.

This will not stop. Especially if printing piles up, QE via USTs to stop collapse piles up, banks gonna bank and keep the quadrillion dollar deviative bubble pumping, and BRICS offloading USD and UST.

To show the state of stagflation/hyperinflation; this is SPY adjusted to 2021 USD. Barely reached ATH.