No matter what the banks say - it’s always worse than they let on.
Fractional reserve banking with such low levels of reserves makes it 100% a confidence game so if the market catches a sniff that something doesn’t smell right… cya cuz it’s all over.
Yes. All of the stress tests and controls that were added after ‘08 only work under the assumption that they’d be able to sell distressed assets to the street (lol). Aka gov is the buyer of last resort now. Nothings changed, more consolidation, higher leverage.
Exactly. All stress tests are done under the assumption that market conditions would remain “normal” and a bank facing trouble in isolation. The world doesn’t work like that. They know it and we know it. We are in need of a strong cleansing fire. 🤙🏼🤜🤛
