The BofA $136B Dynamite Stick
puck.news
The BofA $136B Dynamite Stick
Now we have the makings of a financial crisis: home buyers’ bets were multiplied fifty times over. The problem can be summed up in a single word: leverage. If you borrow $20 to wager on the Redskins to beat the Cowboys, that is a leveraged bet.* Likewise, it’s leverage when you borrow money to take out a mortgage—or when you borrow money to bet on
... See moreNate Silver • The Signal and the Noise: Why So Many Predictions Fail-but Some Don't
In 2008, it all came apart. After September, once Lehman Brothers went under, global lending froze, which in turn sent global production and stock markets into free fall. The Fed, Congress, and the U.S. Treasury eventually took unprecedented measures to cushion the blow. They cut interest rates to zero, extended unlimited credit to foreign central
... See moreNeil Howe • The Fourth Turning Is Here: What the Seasons of History Tell Us about How and When This Crisis Will End
Rapidement, une crainte sur la liquidité du bon étatsunien, sa capacité à être vendu facilement, s’est propagée… La valeur du safe asset était en péril. Pour un représentant de la Bank of America, il ne s’agissait rien de moins que d’une « question de sécurité nationale » capable de « limiter la capacité du gouvernement américain à répondre au coro
... See moreBenjamin Lemoine • La démocratie disciplinée par la dette (French Edition)
Looking from this perspective at the U.S. deficit, by far not all of the credits borrowed by the government were financed by the Fed. According to preliminary and rough estimates, not 40 percent but “only” about 13 percent of U.S. expenditures are presently financed this way. Moreover, in discussing this problem it has to be taken into account that
... See more