We can hope that the financial markets, private equity firms and the banks
hold up in the face of the huge over leveraging and commitments but people saying that things aren't in a danger zone don't account (no pun intended) for how intertwined all of the various leverage instruments and commitments are throughout the entire financial system including private equity. People need to remember that when the collapse began in 07/08 people said "Oh it's just that firm the rest will be OK." Until it all quickly snowballed and things were suddenly in the crapper all over through the markets, banks and the economy. They were all intertwined in the big massive credit/borrowing/leverage/promises to back etc. in one form or another.
The lack of real accountability at that time, as opposed to the "forgive them and shovel money to them" solution, meant they would not truly learn but instead just try to water down regulation/oversight and build the house of cards all over again with different terminology and a different look.
The plain facts are that the private equity firms can no more meet heavy withdrawals than banks or savings and loans can. They are all highly leveraged and a few have posted on DU and elsewhere in the last year just how huge the intertwined leveraging is now and that it dwarfs much of what was in the previous collapse. The Fed repo window surge with banks has been massive of late. It's not because Christmas Club account withdrawals hit the system.
Taking investors money and compounding it through leverage and loaning it 10's of billions at a time for tech startups etc. and then selling off some of the risk as two way promises is like a guy with an STD sleeping with a girl with a different STD and both figuring nothing might get worse.
People saying things like the banks and savings and loans "can't" do this or that are simply relying on what is supposed to happen when in reality if the door is locked and your ATM card doesn't work you might eventually get your money but it might be a long time. People can talk and hope all they want about the FDIC etc. but when the ones who are supposed to say "yes" turn around and say "no" a person is left with trying to go the route of the courts and that might move very slow. You have no assurance that a fascist government that has ignored and defied far more court orders than it has obeyed will obey the one that gets you your money.
The people who suffered in the S&L debacle know very well how what was supposed to happen didn't and how things that weren't supposed to happen did. Given how horribly Crumb The 1st botched the handling of Covid does anybody think he is more competent on these issues? Look what they've done to the economy already in just over a year of making moves.
So I'll hope right along with everybody but hoping and getting are not the same thing and with this crowd of fascists they care about getting what they can while they can and the hopes of the people aren't on their "to do" list. A lot of people hoped the court would see the wrongfulness and illegality of their deportations but they have been deported anyway.
= new reply since forum marked as read
Our economy is so massively concentrated it is incredibly fragile.
No Mercy, No Malice
Prof G (Scott Galloway)
http://profgalloway.com/how-does-the-end-begin/
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Dot com vibes
The AI infrastructure build-out has accelerated recently with an estimated $1 trillion in new commitments. Some firms are making deals with money and assets that don’t yet exist. See: OpenAI promising Oracle $300 billion — money it doesn’t have — for infrastructure Oracle hasn’t built. In other cases, revenue comes from “circular financing,” where dollars rotate between firms, obscuring true market demand. See: Nvidia’s $100 billion investment in OpenAI, which OpenAI will use to buy … Nvidia chips. Circular financing deals were common toward the end of the dot-com bubble, when similar deals contributed to a crash that destroyed 77% of Nasdaq market value. If we are on the precipice of a bubble popping, Nvidia and OpenAI will likely be ground zero. But the fallout would be widespread, as an ecosystem that resembles an ouroboros lives and dies by a shared narrative.
