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shrike82 posted:nah CoCos have been actually pushed onto the markets by regulatory bodies as a way of injecting capital during bad times. So that would potentially make them as safe and not-dodgy as all those AAA-rated MBS and derivates of those before 2008 then?
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Feb 11, 2016 16:06
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Junior G-man posted:And that was necessary or helpful why? That wasn't a snipe, it was explaining why there wasn't any discussion on the topic as most people on here wont read the FT, work in finance, etc. Deutsche's issue isn't one that's going to cause it to go out of business though its just a liquidity issue worst case its broken up ala Lehmans, it only needs a relatively negligible amount to be raised over the year to keep its ratio in legal levels - hence why a German bailout is possible. Would be very similar to what the UK did with RBS, a bank of similar size.
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Feb 11, 2016 16:07
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they're nothing like ABSes
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Feb 11, 2016 16:07
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ukle posted:That wasn't a snipe, it was explaining why there wasn't any discussion on the topic as most people on here wont read the FT, work in finance, etc. Maybe you mean well, but this sounds incredibly pedantic. As if reading the FT endows you with supreme financial intelligence. quote:Deutsche's issue isn't one that's going to cause it to go out of business though its just a liquidity issue worst case its broken up ala Lehmans, No, I can't imagine a break-up along the line of Lehman's having any terrible knock-on effects on the European/global economy. I mean, Lehman's fall didn't precipitate anything else . quote:it only needs a relatively negligible amount to be raised over the year to keep its ratio in legal levels - hence why a German bailout is possible. Would be very similar to what the UK did with RBS, a bank of similar size. If you don't think a state rescue of Deutsche Bank, of any 'negligible amount', wouldn't lead to a bank run of epic proportions in Europe you need to read the FT more.
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Feb 11, 2016 16:13
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Junior G-man posted:if Deutsche Bank goes it has something like 2 or 3 times the GDP of Germany as its total capital footprint, so Germany couldn't even save it if it wanted to (and even if it wanted to, it's not allowed under EU rules which they strongly supported). lol
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Feb 11, 2016 16:20
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Junior G-man posted:Maybe you mean well, but this sounds incredibly pedantic. As if reading the FT endows you with supreme financial intelligence. Can you please take a step back, I really think you are misinterpreting what I am writing. Its not pedantic its just Deutche's issues have not been discussed outside financial circles as until Mondays statement from Deutsche it was an issue not reported by the mainstream press. I even wrote a post on this subject last week even before Monday's statement as this has been brewing for a while, but decided not to post it as it was just not something people were aware of so thought wouldn't get any discussion. As to the fallout from the German's bailing out Deutsche, its not far off being priced into their share price, which is significantly below their 2009 levels. Other banking stocks have been falling for the past 6 months, especially banks with Chinese exposure, its kind of seen as a given that at least one of them will need assistance. Also Deutsche Bank needing assistance wont cause a bank run, that was proven in the 2007-2009 crisis - the only time there was a bank run is when there was no assistance given (Northern Rock).
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Feb 11, 2016 16:34
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Junior G-man posted:So that would potentially make them as safe and not-dodgy as all those AAA-rated MBS and derivates of those before 2008 then? Uh, you're misunderstanding. A) these are used to help fund the bank, as opposed to something the bank purchased and whose blowup would endanger it (like MBS and CDOs did nine years ago). B) there is not a gigantic market for these (as opposed to the trillions in RMBS that was out there) C) they certainly don't trade as if they were incredibly safe. Investors in CoCos knew what they were getting into. And if they do end up converting, it won't be the end of the world.
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Feb 11, 2016 16:36
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I dunno, so far bonds seem to point more to panic than anything else. We'll see I guess, my bet is "Two Big To Fail 2: European Bogaloo", what with financial reform in the EU after 2008 amounting to zilch. Ukle, what are those issues with DB that you didn't post about last week? Can you please give us a summary or some links? TIA 
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Feb 11, 2016 16:49
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Next thread title should be "2016 Economic Crisis Thread - I'm in love with the CoCo"
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Feb 11, 2016 16:59
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Dawncloack posted:I dunno, so far bonds seem to point more to panic than anything else. We'll see I guess, my bet is "Two Big To Fail 2: European Bogaloo", what with financial reform in the EU after 2008 amounting to zilch. No worries, banks will be saved. Nothing a few additional rounds of austerity-fueled firings and pension cuttings can't fix.
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Feb 11, 2016 16:59
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Freezer posted:No worries, banks will be saved. Nothing a few additional rounds of austerity-fueled firings and pension cuttings can't fix. Oh, don't worry, it's not like I had any doubt. I just wonder how far do they think they can play that game. Looking at the political situation around europe, not much.
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Feb 11, 2016 17:21
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Freezer posted:Well, that's just the chickens coming home to roost, isn't it? Turns out that if you create a generation of underpaid debtors with no sense of job/economic security, they will be hesitant to take 30 year gambles on overpriced assets. People buying poo poo is also what drives demand. Now that the rich has everybody's money they have no customers. People keep targeting the millenial market and asking "why can't we get them to buy anything?" without realizing that the answer is "they can't loving afford anything."
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Feb 11, 2016 17:43
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It's quite possible to create a system where you have the consumption habits of the top 1/5/10% driving economies and an entire underclass.
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Feb 11, 2016 17:43
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ToxicSlurpee posted:People buying poo poo is also what drives demand. Now that the rich has everybody's money they have no customers. People keep targeting the millenial market and asking "why can't we get them to buy anything?" without realizing that the answer is "they can't loving afford anything." Wasn't there a study done recently which was basically "Millenials Now Buying poo poo Because Their Average Salaries Have Gone Up", proving wrong all the marketers who thought the key to cracking the Dawncloack posted:Anyway how come there isn't more talk about the Deutsche bank? that's what brought me to this thread. Change 2 letters in Deutsche Bank and you get Deutsche Bahn Which just had a major crash. Coincidence? I'm just asking questions 
MikeCrotch fucked around with this message at 18:45 on Feb 11, 2016 |
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Feb 11, 2016 18:42
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MikeCrotch posted:Wasn't there a study done recently which was basically "Millenials Now Buying poo poo Because Their Average Salaries Have Gone Up", proving wrong all the marketers who thought the key to cracking the The funniest (and saddest) thing was that marketers apparently decided that millenials wanted overpriced garbage with flowery words. What millenials actually want is loving jobs. That and for their student loans to go away. Their average salaries have been creeping upward among those that managed to get jobs but with stagnating wages, piles of student debt, and rising living costs they still can't afford as much as their parents. A lot of it I think is the assumption that because millenials don't have kids and work fewer hours (because fewer of them have jobs) they're a bunch of self-absorbed prats that have to have their egos stroked and offered only the finest organic ingredients. The marketers in general are just plain missing why millenial wallets aren't flying open and vomiting cash everywhere.
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Feb 11, 2016 18:54
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Millenials actually do spend less and save more than other generations, for what it's worth. Who would have thought that a generation that came of age during the greatest financial crisis in decades might be less willing to consume?
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Feb 11, 2016 19:20
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ToxicSlurpee posted:The funniest (and saddest) thing was that marketers apparently decided that millenials wanted overpriced garbage with flowery words. What millenials actually want is loving jobs. That and for their student loans to go away. Their average salaries have been creeping upward among those that managed to get jobs but with stagnating wages, piles of student debt, and rising living costs they still can't afford as much as their parents. A marketer's first and most important client is always themselves. If the problem is something that cannot be addressed in a branding campaign such as jobs and debt then companies won't give marketing firms any money.
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Feb 11, 2016 19:21
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The narrative that the economy's being screwed because millenials aren't spending hasn't panned out though. with less being spent on big ticket items like a mortgage or cars, they spend more on day-to-day goods or services
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Feb 11, 2016 19:22
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shrike82 posted:The narrative that the economy's being screwed because millenials aren't spending hasn't panned out though. I am not sure you've thought what you are saying through. Considering the high youth unemployement, I doubt that because they didn't buy a house they spend more on other things. When you don't have a job it's not just a house that you can buy.
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Feb 11, 2016 19:31
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tbf, you're from Spain where basically no one works. in the States and most of Europe, you still have millenials consuming to the extent where consumer goods/services providers haven't been impacted directly.
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Feb 11, 2016 19:33
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shrike82 posted:The narrative that the economy's being screwed because millenials aren't spending hasn't panned out though. Millennials spend like goons: they don't buy houses and cars, but they plow money into anime figurines and trendy restaurants
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Feb 11, 2016 19:34
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If you're wondering what financial instrument is going to implode and destroy the global economy then it's probably the ETF, although that needs something else to go really bad first and I'm going to say it'll be a tech crash.
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Feb 11, 2016 20:13
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namesake posted:If you're wondering what financial instrument is going to implode and destroy the global economy then it's probably the ETF, although that needs something else to go really bad first and I'm going to say it'll be a tech crash. ETFs aren't bad and I'd love to hear your explanation why they're going to crate the global economy. The stuff coming out here is a good reason why DnD is not a good place to discuss anything related to finance.
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Feb 11, 2016 20:16
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shrike82 posted:tbf, you're from Spain where basically no one works. It's true, though; millenials have been getting financially hosed and it's making them more cautious. It's also easy to see how much of a nasty bubble real estate is right now. Millenials also just plain don't have the job security needed to buy a house. They expect to change jobs within a few years so how the hell can they put down roots? Youth unemployment was also mentioned; when you look at the like 16 to 24 age bracket unemployment and underemployment are absolutely massive. It also doesn't help that college graduates just aren't finding jobs. Those that do actually win the game, find a good job, and get their loans to go away also are highly like to have at least a dozen friends who aren't doing that well and think "that could be me." Given how much information is available on the internet and how common knowledge the fuckery that led to the meltdown have become it's no wonder millenials aren't borrowing every cent they can and spending, spending, spending! They know full well their job is probably not a career and the company they work for will throw them out at the slightest provocation and are padding themselves financially because of it. This generation got screwed unbelievably hard and they know it. They're far more financially cynical.
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Feb 11, 2016 20:23
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Something my wife brought up that I never thought of (in regards to millennials not buying things like cars and mortages) is that the millennials that can afford to buy houses don't need a mortage as they're inheriting the houses from their baby boomer parents. Obviously inheritance of things like houses has always been a thing and I don't pretend to know nearly enough about the history of economics to know the effects of things like mortages in the 40s and 50s but I imagine it's possible this is playing a somewhat small part? Plus as others have said, for many millennials, their first exposure to adulthood was the financial crash of '08, which made of lot of them very wary.
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Feb 11, 2016 20:27
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shrike82 posted:ETFs aren't bad and I'd love to hear your explanation why they're going to crate the global economy. The SEC is concerned about how they operate and are valued against how they're thought to operate and should be valued https://www.sec.gov/comments/s7-16-15/s71615-60.pdf and with a market of over $2 trillion they're extremely popular at all levels of investment, that's a bad combo in terms of known risk and rational response from investors if they start going bad.
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Feb 11, 2016 20:31
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Akileese posted:Something my wife brought up that I never thought of (in regards to millennials not buying things like cars and mortages) is that the millennials that can afford to buy houses don't need a mortage as they're inheriting the houses from their baby boomer parents. Obviously inheritance of things like houses has always been a thing and I don't pretend to know nearly enough about the history of economics to know the effects of things like mortages in the 40s and 50s but I imagine it's possible this is playing a somewhat small part? Plus as others have said, for many millennials, their first exposure to adulthood was the financial crash of '08, which made of lot of them very wary. The 40's and 50's were a bizarre time because humanity as a whole doesn't tend to live in single-family dwellings. Apartments and communal living is pretty much the norm. The other side of millenials not buying homes is that they're increasingly moving to the cities where renting an apartment is the norm. The other big difference is there is a gently caress load more people now than 60 years ago. Putting everybody in a house is a god awfully inefficient use of land. When there were fewer people it isn't a huge deal but now we're seeing the nasty, nasty effects of urban sprawl. Living in the suburbs is just asking to deal with nonstop traffic nightmares and commutes that take unreasonable amounts of time. Millenials are increasingly going "meh, gently caress this I'm getting an apartment three miles from work and riding the bus." Once again it's a scale thing; suburbs just can't handle the amount of people we need them to now. Plus millenials are more likely to be environmentally conscious in their behavior. Commuting 60 minutes each way in a huge SUV is...not friendly to the rock we live on.
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Feb 11, 2016 20:32
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namesake posted:The SEC is concerned about how they operate and are valued against how they're thought to operate and should be valued https://www.sec.gov/comments/s7-16-15/s71615-60.pdf and with a market of over $2 trillion they're extremely popular at all levels of investment, that's a bad combo in terms of known risk and rational response from investors if they start going bad. lol the comment focuses on regulatory and disclosure concerns without going so far to say there's actually an existing problem. if you tell me that BlackRock shouldn't be allowed to say this - “ETFs are investment products that can help individuals build a nest egg, prepare for retirement, or save for their children’s education. They also help institutions such as large pension plans, foundations and endowments meet their financial obligations.” without a bunch of caveats, that's fine by me
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Feb 11, 2016 20:42
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ToxicSlurpee posted:The 40's and 50's were a bizarre time because humanity as a whole doesn't tend to live in single-family dwellings. Apartments and communal living is pretty much the norm. The other side of millenials not buying homes is that they're increasingly moving to the cities where renting an apartment is the norm. The other big difference is there is a gently caress load more people now than 60 years ago. Putting everybody in a house is a god awfully inefficient use of land. When there were fewer people it isn't a huge deal but now we're seeing the nasty, nasty effects of urban sprawl. Living in the suburbs is just asking to deal with nonstop traffic nightmares and commutes that take unreasonable amounts of time. Millenials are increasingly going "meh, gently caress this I'm getting an apartment three miles from work and riding the bus." We live in DFW and it's a giant lesson in what you posted. The people pouring in from the coasts tend to live in the suburbs and price everyone out of them while millennials around here either live/rent in college towns like Denton or move way out to Fort Worth (which is where we're going now because that's where all the brand new and affordable housing is). There is a huge section of people that live downtown too. They just put up a ton of apartments right next to American Airlines Center. At first I thought who the hell would want to live right next to an arena and then I realized it's right on the edge of downtown on top of being right next to the DART Rail which will allow you to get around the rest of downtown. You can afford to live in downtown if you don't need a car.
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Feb 11, 2016 20:43
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the solution is socialized public housing. also nationalize everything else too. full communism now
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Feb 11, 2016 21:39
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I dunno ToxicSlurpee. A lot of the stuff you're saying seems to be normative rather than descriptive. I get the impression that you're treating the downturn as an opportunity for American consumption habits to be cut down to what you think are sustainable (e.g., less spending on poo poo, moving to city centres, shorter commutes etc.)
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Feb 11, 2016 21:58
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Past a certain point permabears begin to resemble Travis Bickle yearning for a hard rain to wash the scum from the streets.
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Feb 11, 2016 22:42
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Older millennial here. Even if I suddenly started making six figures, I've been poor so long I'd keep buying everything second hand. I just can't justify spending $50 on a pair of pants when I can buy some just as good for $5. I would love to get rid of my car if I could afford to live closer to work. I don't need anything nice or shiny to be happy. I had been in the workforce for 6 years when the financial meltdown happened, and now I'm sitting here watching the whole thing unfold all over again. I would love to buy a house, but the one I was looking at went from $135k to $300k in two years, this being the poor side of town even. Things are even more ridiculous the closer you get to Seattle. I have no student loans, but still have been completely unable to put any money in an emergency fund let alone towards a down payment. House prices are completely disconnected from reality. I'm eagerly waiting for the day that everyone wakes up and realizes there's no one left to buy their homes. In the meantime I'm looking forward to inheriting my parent's property in 30 years or so. That'll be my only shot at home ownership once the global elite buy everything up as investments (and then let them sit empty and rot).
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Feb 12, 2016 00:20
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icantfindaname posted:the solution is socialized public housing. also nationalize everything else too. full communism now Honestly I'd settle for micro-apartments becoming more of a thing in the US. At this point I'd live in a closet with a mini fridge in one corner and a shitter in the other if it meant that I could get out of my parent's house and wouldn't need to rely on roommates.
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Feb 12, 2016 01:12
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readingatwork posted:Honestly I'd settle for micro-apartments becoming more of a thing in the US. At this point I'd live in a closet with a mini fridge in one corner and a shitter in the other if it meant that I could get out of my parent's house and wouldn't need to rely on roommates. edit: \/\/\/ right but they're banned because others find them distasteful. Cicero fucked around with this message at 02:55 on Feb 12, 2016 |
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Feb 12, 2016 01:28
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readingatwork posted:Honestly I'd settle for micro-apartments becoming more of a thing in the US. It's not really a matter of taste. They're outright banned in many jurisdictions.
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Feb 12, 2016 02:33
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shrike82 posted:I dunno ToxicSlurpee. A lot of the stuff you're saying seems to be normative rather than descriptive. Not really; just pointing out that millenials are cutting back on their consumption compared to their parents out of necessity. For better or for worse millenials have it worse than their parents, overall. Some are doing extremely well (STEM people, for example) but a larger chunk of them is getting hammered right in their collective dicks in every way possible. The other side of it is that I wanted to point out that commuting in a car from the suburbs has gotten terrible. Our infrastructure is crumbling for one and just isn't designed to handle the volume. Often it was designed 50 to 100 years ago and never updated. Now we have a political system rabidly opposed to any government spending at all preventing even maintaining it properly so it's falling apart, which just compounds the load problems. Retired/retiring boomers don't see much reason to move but also can't afford to because their homes won't sell, especially not for the prices they want. Younger people, who have fewer things tying them down to specific locations, can move but also don't have much choice but to rent. The net result is less consumption but why it's happening can be argued to be awful. Lacrosse posted:That'll be my only shot at home ownership once the global elite buy everything up as investments (and then let them sit empty and rot). And this just makes it worse. The number of empty houses in America is completely obscene; coupled with increasing rent for just that same reason and it's just plain more expensive to survive at all.
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Feb 12, 2016 02:57
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everyone's a progressive until something threatens their property value
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Feb 12, 2016 03:03
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readingatwork posted:Honestly I'd settle for micro-apartments becoming more of a thing in the US. At this point I'd live in a closet with a mini fridge in one corner and a shitter in the other if it meant that I could get out of my parent's house and wouldn't need to rely on roommates. Funnily enough there is also a problem in the other direction. Most new multifamily residential construction is comprised largely of 600-800sqft 1 bedroom 1 bath apartments/condos. 2 bedroom units are in tight supply and 3 bedroom apartments are practically mythical. Basically if you want to raise a family you have to purchase or rent a house in the suburbs.
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Feb 12, 2016 03:06
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Cicero posted:Good luck with that, every time a micro apartment complex goes up, people get really mad about what housing others choose to live in. It's not to their personal tastes, you see, and therefore should not exist, and furthermore anyone who prefers it is a literal babby. Fine with the trade-offs of a tiny apartment? Too bad, your personal preferences are incorrect and you should feel bad for having them. This anger happens because entire families get forced into single bedroom micro apartments, recreating early 20th century slums.
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Feb 12, 2016 04:59
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