Key counterpoints:
- Global FX turnover runs near $9.6T per day (BIS, April 2025). A retail wave of calls will not move USD/JPY in a durable way at that scale.
- /6J options settle on /6J futures. When you buy calls, you mostly push dealer delta hedging into futures, then dealers unwind as exposure changes. No sustained spot yen demand comes from that flow.
- FXY calls track an ETF wrapper, not spot.
- “Widowmaker trade” most often refers to repeated losses from shorting Japanese government bonds, not a long-yen crowd squeeze.
Otherwise it would not take a day to swap $500 mil for commercial reasons (think buying a couple Boeing plane with Euros) to avoid too much market impact as documented in multiple interviews with currency dealers stating it takes them 1 day to "work" a $500 mil order.
Retail can move FX, if it piles into one pair. But unlike the Boeing order they will also need to exit the trade at some point, which makes them vulnerable.
Does it?
It cost the taxpayers nothing (in fact it made us money), it destroyed 4 of the 5 largest investment banks in the US, and it sent over 200 bankers, brokers, and auditors to jail.
What part of that are people mad about, and why?
A lot of people I’ve talked to about it weren’t even adults when the bailout happened. They weren’t watching the news and didn’t care at the time. They only know it through pop culture and from fiery speeches from politicians and influencers.
The idea of a bailout has become synonymous with the government handing hard-earned tax dollars over to banks, no strings attached. The facts don’t really matter.
The fix was for the government to pick some winners, coercively lend them money and force them to buy the failing banks.
Now we have fewer, bigger banks. People who were conservative with money, saved instead of over-leveraging, did not get to buy assets cheaply, because the government propped up asset prices with unlimited, cheap money.
And TARP did eventually produce weak positive returns. So I'm glad they didn't lose money, but I'm not happy I was prevented from buying fire sale assets. I'm also not happy residential housing prices are 2x what they were in 2010 (and still well over 1.5x the peak of the bubble).
Perhaps worth noting that Ben Bernanke, who was the chair of the Fed at the time, was/is one of the most top experts on Great Depression (it's the work he later won the Nobel Prize for). So as bad as the GFC was, Bernanke thought it could get really bad and pushed for measures that he probably thought would prevent another 1930s scenario.
This is another common misconception about bailouts: That if the government hadn’t stepped in, individuals would have been better somehow or been able to take advantage of a collapsing economy for personal gain.
You wouldn’t be buying fire sale assets and getting great personal returns. That would have gone to corporations, family offices, and people in higher tax brackets.
People who want a society-wide crisis so they can profit off it are far more morally reprehensible than people who said "we'll loosen the mortgage criteria a bit so people can buy houses, houses always go up in value right?"
> > Literally dozens of CEOs went to jail, which is again why I think this may be the biggest ball-drop of the media this century
The GP's remark is centered around the *sentiment* that none of the C-suite / execs in the Big Banks (Merrill, Goldman, BoA, Citi) were jailed for their involvement / excessive speculation in the 2008 crisis.
The keywords there being "Big Banks": If it's a national household name, OR if their positions are coveted by finance employees, it's a Big Bank. Otherwise, it's not a Big Bank.
> > > Your Google skills may need some work because this is the first result for "bank CEO jailed by TARP":
1) This is a goalpost shift from "bank CEOs jailed for causing / excessively speculating up to the 2008 crisis".
2) TARP was established as a result of the crisis (i.e. AFTER it happened), and therefore cannot be used to mark execs that were jailed for their involvement / excessive speculation in the 2008 crisis.
3) "TARP defraudment" is a different matter, and not "Causing the 2008 crisis" or "excessive speculation"
> > > https://archives.fbi.gov/archives/atlanta/press-releases/201...
The case cited only tangentially involves TARP, when the bulk of the case was about the President of FirstCity Bank & his associates defrauding the bank with loans that *they themselves had involvement in*.
In terms of public sentiment, for the conviction to have happened, it has to happen to the Big Banks, and not anyone else. If it didn't happen to the Big Banks, then narrative-wise it didn't happen at all.
This comment puts it well. [0]
Though it sounds like they're mainly talking about bankers jailed for fraud related to the TARP loans themselves, as opposed to the mortgage fraud that precipitated the crisis.
https://www.housingwire.com/articles/38536-failed-bank-ceo-g... https://www.justice.gov/usao-md/pr/former-president-and-ceo-...
https://oig.federalreserve.gov/releases/news-bekkedam-senten...
https://www.washingtonpost.com/news/business/wp/2015/09/02/b...
https://www.housingwire.com/articles/38536-failed-bank-ceo-g...
https://www.justice.gov/usao-md/pr/former-president-and-ceo-...
https://oig.federalreserve.gov/releases/news-bekkedam-senten...
https://www.washingtonpost.com/news/business/wp/2015/09/02/b...
Again, literally just the first half of the first page of Google results. People can do this on their own, too, if they want to learn more about it
The fact remains that nobody who caused the crisis day saw a day in prison, and the banks who did were bailed out when it easily could have been the soon-to-be-homeless citizens instead.
https://archives.fbi.gov/archives/atlanta/press-releases/201...
Jailing people is for crimes committed, not for punishing people you dislike.
Think of all the small businesses that would love to take particular risks if they knew they wouldn’t have to suffer the normal consequences associated with failure…
If you want to see why people are mad look at what is actually causing them pain. For young people it’s mostly housing costs.
Many blame the bailouts. That may be wrong, but it’s a visible scapegoat.
edit: it's unfortunate that you can't bring up any actual evidence to support your assertion
https://hartfordbusiness.com/article/fed-myth-busters-35-ban...
And, again, I'll remind you that until five minutes ago you thought the number was zero, and yet you're not happy to learn you're wrong. Puzzling.
Do you have any names?
> Goldsmith Romero said it’s wrong to say that bankers now in prison only came from small banks. She said that that some banks had assets of as much as $10 billion and were very big players in the states where they were based. But she said it is true that top executives at the so-called “too big to fail” banks have avoided any criminal charges, even as their banks paid tens of billions of dollars in fines to settle charges of wrong doing leading up to the financial crisis.
> “I certainly understand the frustration of the people who want to see accountability for those who brought on the financial crisis,” she told CNNMoney. But she said even when the big banks admitted to wrong doing, investigators were not able to prove criminal action by the banks’ executives.
Five minutes ago I was unhappy there were no apples, and you're showing me a stack of oranges and then acting like it's irrational for me to not consider all fruit equivalent. I imagine you'd claim this is goalpost moving, but when you're apparently getting into conversations about this often enough to have formed your own narrative about so many people being irrational, it's worth considering that maybe it's more likely that you as an individual have been misunderstanding what everyone else has been saying rather than large swaths of people all suffering from a massive delusion that you alone have managed to see the real truth about.
The article you posted is about a banker convicted in 2013 for fraud committed in 2011 that has nothing to do with contributing to the 2008 crisis. No CEOs were jailed for that.
Take your anger somewhere else because the truth is that it’s still zero, just like it was 5 minutes ago and 18 years ago. What would you possibly have to gain from lying about stuff like this?
https://oig.federalreserve.gov/releases/news-bekkedam-senten...
https://www.washingtonpost.com/news/business/wp/2015/09/02/b...
JFC you guys need to work on your web literacy
https://www.justice.gov/usao-md/pr/former-president-and-ceo-...
https://oig.federalreserve.gov/releases/news-bekkedam-senten...
That's literally just from the first page of Google results, which you are also free to use if you want to learn more about this.
And btw "it's just TARP fraud" is an idiotic thing to say: the fraud was in misrepresenting the banks' positions prior to the crash during the TARP audit.
People want CEOs to go to jail for knowingly playing a role in causing the crash. Misrepresenting banks' positions afterwards isn't it.
I know there were some really large settlements in 2012 and onward, but for everyone I know who lost their business or their home or their investments, I don't know anyone who received any of this settlement money.
Some people might consider it idiotic to post 3 broken links to articles they clearly haven’t read; others would simply consider it obnoxious.
> the fraud was in misrepresenting the banks' positions prior to the crash during the TARP audit.
TARP fraud wasn’t what caused the crisis. The popular narrative is that the credit rating agencies failed to do due diligence because they were making a lot of money handing out high ratings on junk CDOs. So far as I know, no one involved in this went to jail. People were angry about the events that led up to the crisis not being punished; most probably didn’t even know about the fraud that went on with the program set up to bail out the banks after the fact.
And caused a global recession along the way. The loan repayment interest didn't (and couldn't possibly) cover even a fraction of the backlash, which includes lives destroyed world-wide.
Externalities?
They're talking about the bailout. I think the bailout came after the cause of the recession.
Pull the other one, it has bells on it. If the government is involved in a financial transaction it is because nobody in the private sphere with money wants to be involved. That means either the return wasn't commensurate to the risk or there was dodgy accounting going on that nobody would actually thought represented a reasonable real return. If there was actually a prospect of making a reasonable return, money would have been found. Even the creditors might have been willing to make deals.
I bet the average taxpayer would much rather have the money given to them in their capacity as an individual and would have profited off it more than the hypothetical return the US government may claim it made.
> What part of that are people mad about, and why?
The gross unfairness of it all. I mean, it is bad enough that the failures in charge of the banking system got bailed out despite being incompetent at their jobs, but the average person had to guarantee them their high status role in society? It is a sick joke.
It is a terrible idea to be printing money to prop up asset owners. If that is the basic plan anyway, it shouldn't be mandatory to have incompetents mediating the handout process.
And it isn't like bankruptcy is that terrible. All the physical assets still exist. There is still food. Maybe set up a special welfare system for people who lost their life savings if something has to be done, but for heavens sake, taking (and I repeat myself) known, verified incompetents and guaranteeing them ongoing control of the financial system is wildly stupid. It is on par with a scheme like mandating people all buy in to cryptocurrencies.
I do agree it looks bad if bankers can take huge risks and benefit (personally) from the upside without a downside risk. But it's not necessarily the bailout that's the problem here and the taxpayers do have the theoretical power to vote for people who can change this.
What courses of action does that argument not justify? "We had a predictable emergency and decided to panic and hand out money. Don't expect us to really think about alternatives." is not the course of action that really speaks to me for getting good results for taxpayers, or anyone except the people directly getting the money.
We have a playbook for getting a statistically good outcome when people run out of money. It is called bankruptcy. I can see how a banker could confuse that with a bailout because they both start with a "b" and there are a lot of letters - but the stark truth is they are different words.
So this argument doesn't justify any course of action but is does justify a course of actions with poor optics that seems reasonable given the risks.
This is a very valid narrative, although if you say it in public people will call you a socialist. It applies to people like Fred Goodwin of RBS (eventually stripped of knighthood) and Sean Quinn of AIB (who did actually serve jail time).
> And it isn't like bankruptcy is that terrible. All the physical assets still exist. There is still food
I think you're really underestimating how terrible "retail banking stops functioning" would have been in the short term. The loans allowed the problems to be addressed over the medium term. "Every retail bank has ceased trading" is a problem you have about three days to solve before the inability of people to buy food and petrol starts a much larger collapse.
Besides, some of the bailouts were very close to "flat-pack" bankruptcies. Northern Rock and Bradford and Bingley were fully nationalized! Equity holders lost everything, that's a bankruptcy!
(Americans will say "who" there, but again: it was a global crisis. It more resembles climate change. It's very difficult to say that any individual is responsible for it, but somehow Australia ends up on fire as a result of unsustainable emissions, and the banking system collapsed as a result of unsustainable lending emissions.)
I would however like people to be a bit more specific about what they think the crime was, who specifically committed what, and whether it was actually illegal at the time. It's a word people love to throw around. It's not actually illegal to make poor business decisions.
https://en.wikipedia.org/wiki/Se%C3%A1n_Quinn for example, while his misconduct cost the collapse of AIB, the thing he was actually jailed for was failing to comply with court orders.
It's because the markets were frozen up; I was actually alive then and you can't really gaslight me about this
Perhaps I'm misunderstanding, but isn't this another way of saying it was too risky for people to invest? That seems to be the same concept as the quote you cited from the parent comment: "either the return wasn't commensurate to the risk".
Whereas the federal government can write a check for $633.6 billion and be much more certain the debtors will survive and pay it back.
And then we see 20 good years of economic prosperity where the US predictably got even wealthier than it previously was and there is great political stability and well-loved presidents like Mr Trump who represent the satisfaction US citizens feel for the economic highs they have reached!
What a fantastic deal for the average taxpayer. Let the confetti fall. Well done government, saved the day there.
If you just look at the economic indicators, then it did. Certainly way better than the "no intervention" counterfactual would have gone. People do not like it when all the ATMs stop working.
There is a lot of discourse to be had as to why people aren't feeling that personally.
> killing people in Iraq because Muslims, amirite? All those bombs cost a bomb.
Sadly there is/was massive bipartisan support for this bullshit. Including from the public. I note from a chronology perspective that most of the money in Iraq was spent/lost/wasted before 2008.
That is, the big risk is "what if the state doesn't intervene?"
Correspondingly, the state has a special move that only it can play, because "what if the state doesn't intervene" is not a risk to the state itself. The act of intervening makes the risk go away. That's part of the privilege of being the lender of last resort with the option to print currency.
(which is why this was a much more serious problem for Greece and Ireland, which as Eurozone members were constrained in their ability to even contemplate printing their way out of the problem!)
If you can't understand why people are angry that the government continues to give away large amounts of corporate welfare without protecting people, then I'd definitely read up on people movements because a few are brewing across the country and all of them want blood.
I was surprised to learn that the "bailout" was in fact a loan that was repaid with interest for a "net profit of $121 billion" [1] rather than just giving the banks money. After learning this, I polled many people around me and few had understood the terms of the transaction. So I think there may be significant public misunderstanding there.
Even if people do understand it was a loan, there's an argument to be made that the money could have been spent in better ways (e.g. early education improvement, preventative healthcare etc. that also give long term returns in preventing crime and reducing healthcare costs). If you believe not giving the loans would have caused the total collapse of the economy and worsened of all of those things (crime, healthcare, education etc.), then it seems a worthwhile investment. But not everyone may share that perspective.
> What part of that are people mad about, and why?
Another element of the controversy was the payment of $218 million of bonuses to the executives of AIG which was being bailed out and effectively run by the federal government [2]. Apparently the government allowed the bonuses because Geithner said there was no legal basis for voiding the bonus contracts.[3]
Some people think controversy over government mortgage relief spawned the Tea Party movement based on this speech by Rick Santelli [4] about his dissatisfaction with the government's bailing out the "losers" who couldn't afford their mortgages.
Some people also feel there could have been more regulation of the financial sector or breakup of big banks [5] or more stipulations attached to the loans.
Just some suggestions based on my understanding of the history.
[1] https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program#...
[2] https://en.wikipedia.org/wiki/AIG_bonus_payments_controversy
[3] https://youtu.be/uYJLyGoWbzY?si=geM87strQlH7EURN&t=1079
[4] https://youtu.be/5v1EtiEuSEY?si=055bAuiZiIq-YHXy&t=3023
[5] https://en.wikipedia.org/wiki/Brown%E2%80%93Kaufman_amendmen...
The idea that 4 of the largest investment banks in the US were destroyed is not just utterly false, it’s hard to imagine how one could interpret the outcome in this manner.
Why would anyone be happy that the government offered handouts that were stolen, low-level criminals prosecuted, meanwhile every single principal who was culpable went unpunished?
I don’t need to hear from you how this is off-base or I’m misunderstanding. I’m close to principals involved in the crisis and worked for years in the response to it, and have heard what went on in the meetings dramatized afterwards.
Who, specifically, was culpable for what? I appreciate that anger is not a charge sheet, but .. we could actually do with a more enumerated list of who specifically did which specific illegal act, in order to have a proper discussion.
Now they act like they’re doing us a favor by negotiating to sell a vehicle only a little above sticker price.
Excuse me while I vomit…
For me it was obvious something was afoot with earnings and performance not matching the prices, I finally understand why now thanks to this article.
The fact that there are rules for institutional investors and retail investors and us in retail have so little visibility and time to keep up, just shows more and more the game is a david vs a goliath, and we are all slingless david.
Most institutional investors are not going to outperform your diversified portfolio. It's not like professionally managed funds are killing it while individual investors are losing. There are some specific examples of funds/people who do well but on average most do ... average.
My main point is that most people, including the media, whenever there is a big crash in prices, like silver going down double digits, they act like the money evaporated and everyone that invested lost money.
My point is that it's not the case, it dropped because there was a huge volume of people selling, making it cheaper. The people selling converted it all for liquidity, they just 'got' a lot of money in cash to spend, and they needed it or will use it for one reason to another.
Retail investors don't have the time (unless you work in finance) to read all the news and information to be aware of situations that will trigger liquidity crunches like these past few months, while institutional investors will.
My point here is you could have performed all of the value investing in the world and you are still eating losses, standard diversification theory is to put in gold when the markets are unstable, as it appreciates in time of high volatility, we are in times of extreme volatility and gold crashed, it makes no sense unless you have visibility in the institutional investing trends.
Prices can drop on very low volumes. All that prices tell us is what someone agreed to buy and sell at a given point in time. Some (most?) sellers are likely selling because they are planning to buy when the price is lower (i.e. they are betting the market will go down) not because they need to use it.
Generally gold is not considered an investment or a hedge against marker instability and most diversified portfolios would not have gold in them.
Yes- if I own the S&P 500 and the S&P 500 goes down then the current value of my investment has gone down.
Overreaching arguments that sellers are like selling because they plan to buy when it's lower, no proof and a limited view, in fact in my also overreached argument I would say the opposite, most people just want to put money on an ETF and hold it until retirement, without having to touch it, they sell because something is forcing their hand and they need the liquidity to pay for something else.
Gold is definitely a hedge for inflation and market instability which is why it's had such a big run up these past few months, and they are definitely used in most diversified portfolios, yale fund as an example, (I don't know where you got this notion from)
Like...what do y'all think demand is? From tulips and cabbage patch kids to meme coins and nfts, the price fluctuates based on semi flexible supply and highly flexible demand.
You could say "ah well, according to my analysis of the market psychology of this asset, I believe price will collapse in the medium term." but I just don't see how that's any more useful than saying "I believe demand will decrease soon" or "People aren't going to want this thing forever"
That said, when people claim to distill the market psychology into a single recap or analyze the market psychology to predict future price, that's pretty much nonsense.
Current sales figures are more closely based on what people want to buy now.
It is true that the yen carry trade is currently being unwound and that it has significant implications for nearly all holders of treasuries. But claiming that ALL of the recent volatility is due to this one event is ludicrous. There are some blatant falsities, like saying that gold and silver are historically uncorrelated??? And it’s clear that the author has a bias against the financial establishment (“monopoly money”), coloring the output.
That said, there are legitimately interesting bits here I didn’t know about, like the Japanese institutional liquidation of US treasuries. I would not repeat this information to others without fact checking it, but if accurately described it’s an important space to watch. It’s not surprising that the LLM would get some things right, of course.
One big problem with this article is the clear prompt given to connect x current event to the yen carry trade, like Warsh’s nomination and the Greenland nonsense. This creates a lot of noise. It’s basically the LLM looking for a pattern between these things instead of identifying a structural flow. It might not even be wrong, but it’s horribly biased towards finding a fake pattern, so I would never trust it.
For the tech heads in HN that are excited to see a Justine Tunney post: don’t go crazy. If you’re really interested in learning about the unwinding of the yen carry trade, there’s plenty of information from actual experts to read about, not this slop.
I am also veeery suspicious of monocausal finance explanations. There's simply a lot going on. The Greenland nonsense will definitely have moved the needle somehow; while a token deal was made to get it out of the media and allow all the insiders to front-run it, some very real changes are now going to happen over a longer period in order to decouple from US risk.
There was a leak posted on Wallstreetbets of some paid analysis (https://www.reddit.com/r/wallstreetbets/comments/1qpwyqz/dbs...), and it was basically follow the hype with a layer of sophisticated post rationalisation on top. I fail to see the difference between these and the average "DD" on an investing subreddit.
Excerpt from the Tesla one (https://www.dbs.com/content/article/pdf/US_clover/Tesla.pdf):
> Leading EV manufacturer. Tesla is a leading global EV manufacturer, backed by its firm market leadership and healthy automotive margins. Tesla's leading share is backed by its economic MOAT in EV charging infrastructure and supercharger network, autonomous driving and other software (e.g., full self- driving aka FSD) (...) Tesla’s pivot toward AI provides a long- term growth foundation, but near-term performance will remain sensitive to progress on AI-driven execution milestones.
I feel the same way. It's so frustrating. I try to read and learn and then just hit one of "wait those numbers don't add up", or "this reads like the author just learned about this thing too" and other strange logical leaps time and again.
It is hard to really learn anything.
Ok I’ll bite. Where ?
You can start here: https://www.bloomberg.com/news/articles/2024-12-02/yen-carry...
There were news articles about this "happening" but this event never realized.
It was an worrying event, but did not cause a notable USTbill selloff.
That should have been more than obvious from the domain name and the logo at the top already.
That's about as clear as 1+1=2; I wouldn't be surprised if Truss was the least popular PM/President of the last century in the OECD at "start of tenure D+5".
> Japan is in a much better situation right now than post-Brexit post-COVID UK.
What makes you say that?
https://www.youtube.com/watch?v=7ws8Grsc4jU
Purposefully devaluing the dollar to make US goods more globally marketable and hide the Japanese debt crisis is an interesting but risky strategy.
Currently, I'm glad to see a correction without panic, but it's too early to make a call on the effect on the overall global economy. Xi's already suggested making the Yuan a global reserve currency, and seeing as much debt they're holding, I'm a little worried they're able to make it happen if this is the US financial strategy.
It appears they've been associated with a lot of hype/fear copy-paste companies that offer highly inflated monthly access to their trades and research. Note that they were named "Game of Trades" before rebranding.
I really wish that people would wake up to the danger posed by meme stock BS “leaking” into the general markets.
Just as voters are responsible for changes in society, uninformed investors can impact society too, especially when they’re amplifying their purchasing power via leverage.
For instance, I’ve been buying real estate forever, and I’ve enjoyed the Reventure app.
But I’ve REALLY noticed that his YT videos are exclusively doom and gloom.
This ceaseless negativity moves markets, just as the irrational exuberance for real estate in 2005 moved markets.
But the exuberance for real estate was driven by people who were buying real estate.
The endless doom and gloom of YT finance videos is for a much different reason:
It drives page views.
That’s not a good thing. Because it’s really easy to get swept up in the negativity. And that negativity has a downstream effect, where it’s often used to convince people to invest in things that the YouTuber is promoting.
Basically, I don’t know if we need an “SEC for YouTube,” but we might.
Yes, I know we already have an SEC for YouTube (it’s the SEC), but nearly none of the people doling out financial advice on YT are trained professionals. It’s the fundamental defect of internet advice; who to trust?
Why do you suppose that is? Why is there an insatiable desire for negative news about real estate?
An “SEC for YouTube” can’t prevent shit if the lever of influence is already that long. It might be able to keep a lot of meme investor idiots from losing their shirts, but that has to be weighed against the historically evident risks of having what amounts to a ministry of truth/state propaganda regulator.
In other words, what's different is that the gain is higher. The system was not always doomed, because the gain wasn't this high. Now that it is this high, the system may now be doomed.
The channel appears to be five years of "It is happening!" and "It started!" thumbnails. I just can't take it seriously, so I decided to look into the company/leadership.
many bird's eye view articles are depicting how the game is rigged and corrupt to the core and that it is heading towards a wall (and you should buy x, typically gold)... yes.
but then they also have more day-to-day articles discussing market moves and predictions in all directions.
ZH is a wider range of stuff than that. and in all that noise, most of the important alternative, often initially censored news appeared there first.
so, yeah, don't take it all in literally... but then it's a site edited by Tyler Durden FFS... :)
I'm not saying the article's thesis is incorrect, but its providing some data without context. I'm always leery of data presented without context.
The yuan/renminbi is currently about 8.5% of all foreign currency transactions. That's on a similar to CAD and AUD (6%):
* https://en.wikipedia.org/wiki/Template:Most_traded_currencie...
It has a ways to go still.
What is this crazy idea that every single country must act all the time in the same simplified way?
My understanding is that a reserve currency requires fluid markets and a stable, reliable, metrics-based currency policy. It's why the Fed is so stubborn about its relatively simple policy goals: 2% inflation and low unemployment.
China appears to be attempting to reproduce what the USD was before it was free floating.
USD is currently backed by debt and nominally military might. If the US defaults then all of the US bonds held by foreign banks become worthless. That is an enormous risk which is why countries have been divesting from US bonds. If USD was still gold, as it was before 1913, if you hold your money it cannot be made worthless by a third party. After 1913 USD became gold backed bills with partial reserve. It is why USD became the global reserve currency. But, reserve requirements were reduced and more paper was produced. In 1971 Nixon removed the convertibility of paper bills to gold metal effectively stealing the gold of any nation that asked the US to hold it.
One of my favorite bits of currency trivia is that a $20 double gold eagle coin used in circulation prior to 1933 had a gold content of 0.9675 troy ounces. Twenty dollars in your hand was literally nearly an ounce of gold.
You seem to suggest that people should worry about a default claiming if we had still had a gold backed currency the risk would go away ... "if you hold your money it cannot be made worthless by a third party" ... but it can be made worthless by a government any time that government chooses.
The government (having defaulted on gold-backed debt) could simply refuse to convert the paper of the debt to gold (sure, that would be bad, but hey, they've already chosen to default, so not much worse ...)
Many people doubt that returning to gold and silver coinage is possible. Going to gold backed currency is a step in the right direction.
A full reserve requirement might work for paper currency. But the only way the plebs that are stuck with paper can truly secure their wealth is to use metal the same as countries do.
1. old situation: currency backed by full (gold) reserve
2. actual political decision: currency no longer backed by full reserve
3. result: currency no longer backed by full reserve
1. possible political decision: return to currency backed by full (gold) reserve
2. possible political decision: currency no longer backed by full reserve
3. result: currency no longer backed by full reserve
If no government in the history of the world had ever done this, then arguing for a full-reserve backed currency might have a bit more weight. But they have, and it really has done.
Regardless, I get your point that political decisions ruined it. It is clear that government cannot be trusted to maintain a constant unit of measure that money should be. So, would you agree to an amendment to separate economy and state? Require government to produce coins of known weight and purity and that is it. If they want more money to spend they will have to extract it as taxes.
No.
https://bmg-group.com/russia-confirms-brics-will-create-gold...
> Pretty straightforward really. You combine Brazil's history of monetary stability, with Russia's respect for property rights, India's domestic tranquility, China's financial transparency, and South Africa's investment opportunities - and hey presto, you've got a new global money
* https://twitter.com/davidfrum/status/1665053372402081792
Of course more countries may enrol in the system, but that dilutes the influence of the five namesake nations of BRICS.
But then you have to choose an actual currency(s) to do transactions in, so will you trust them to be stable? Or perhaps go with a 'theoretical' currency likes Keynes' bancor?
* https://en.wikipedia.org/wiki/Bancor
* https://en.wikipedia.org/wiki/World_currency#Single_world_cu...
As for gold-based currencies, see perhaps "Why the Gold Standard Is the World's Worst Economic Idea, in 2 Charts":
* http://archive.is/https://www.theatlantic.com/business/archi...
* https://www.moneyandbanking.com/commentary/2016/12/14/why-a-...
1. most physical paper has a relatively short life, so one would not expect it to last as long as metal tokens
2. paper was only available in much of the world several thousand years after the first currencies began, so it's not suprising that we have little record of paper money from very old civilizations.
3. the idea that there was no cheating by fudging numbers before paper currency is completely ahistorical. The nature and ease of the fudging may have changed, but the fudging itself existed long, long before paper currencies became common.
The entire concept of marking coins with trustworthy seals was exactly to basically invent fiat currency as risk mitigation: coins bearing the seal would be honored, and from that it was a short hop to "what if I just presented an IOU with the seal of the local gold merchant?"
Christ.
Find a professional fiduciary that doesn't have a youtube channel and never speculate more than you can afford to lose.
> Curtis Guy Yarvin (born 1973), also known by the pen name Mencius Moldbug, is an American far-right political blogger and software developer. He is known, along with accelerationist philosopher Nick Land, for founding the anti-egalitarian and anti-democratic philosophical movement known as the Dark Enlightenment or neo-reactionary movement (NRx).
The author (jart, Justine Tunney) has openly supported these ideas: https://thebaffler.com/latest/mouthbreathing-machiavellis
That’s why they were called cryptofascists even though I agree they’ve dropped the hidden part since they feel they have the power to get away with it.
I wonder why you’re worried. Regime’s change all the time. From a third party perspective, China is no better or worse than the US. Also, given how literally every country under the sun despises US now, this might just happen.
China maintains strict controls on capital flows in/out. A reserve currency requires free convertibility. Holders need to move large sums instantly without permission. China has repeatedly tightened these controls during stress periods (2015-16 devaluation fears, for example).
Limited access to Chinese bond markets and equities for foreign institutions. Reserve currency status requires deep, liquid markets where central banks can park hundreds of billions. US Treasury market is $26T and extremely liquid. Chinese government bond market is smaller and less accessible.
Reserve currency issuer must run persistent current account deficits to supply the world with currency. China's economic model is built on export surpluses. They'd need to fundamentally restructure their economy.
This is PRC's fundamental disagreement. US reserve currency morphed into high liquid, high speculative instrument to fund unsustainable debt, hollowed out domestic industry (triffin)... but this is not by design. It's the result of emergency adaptations moving off gold, then people post rationalize the trinity musts (open capital, floating rates, independent central bank) is what makes reserve when it's unintended structural outcome from failed gold peg.
Now we see hints of end stage USD reserve behavior, debt snow balls and reserve controller will pull the our dollar, your problem card. This US doing current conniptions trying to either reduce USD strength or inflate away debt... costly instability. People forget, liquidity / storage only matters to sovereign buyers who needs reserve for utility... everyone else (now plurality) are private buyers who buy for returns. If we enter end of dollar cycle and USD reserve cost them money, then they go elsewhere
Elsewhere is what PRC wants to offer, HIGHLY CONTROLLED, BUT STABLE reserve pegged to PRC industrial chains, i.e. real economy instead of speculative financialization. This what recent yuan reserve talk is from (note it was old Xi speech republished in Qiushi), so the propose model isn't even in response to current USD conniptions but prediction on end life of US behavior when USD reserve goes from exorbitant privilege to just exorbitant.
It's precisely because logical outcome of current reserve "musts", i.e. triffin charity/global good that makes it ultimately a stupid arrangement where the system breaks when US/owner can't afford to maintain or develops bad habits (deficit spending). Hence, what PRC plans to offer in parallel: stable regulated reserves for "real economy" financial utility. Stable Yuan "bank" reserve can coexist with volatile USD "casino" reserve. Now of course this all heterodox theory, but we are seeing theory of USD reserve limits peaking it's head, and PRC not retarded enough to pickup triffin baton. IMO PRC fine with US dealing with triffin headache and IMO betting US will fuck global creditors when shit hits fan, i.e. they waiting for USD reserve to implode due to inherent contradictions, to show world precisely why yuan reserve not modelled to repeat same mistake.
2. Euro share of SWIFT shrunk from ~40% to ~20% post URK war. Part of this technical (t2 reforms), i.e. actual reduction not as dramatic, but Euro as toxic as USD with even less leverage.
Meanwhile PRC went from single digit % cross border settlements 10 years ago to 50%+, plenty of the world trust PRC with their money, not just money but PRC alternative to SWIFT financial plumbing, CIPS. Meanwhile PRC also recycling it's surplus USD to lending... i.e. they're financing more than imf/worldbank/paris club right now. Another indicator that countries "trusts" PRC to manage monetary system, or rather they balancing from losing trust of west.
TBH trust is western mindless muh reserve orthodoxy nonesense. Ultimately PRC has much stronger reserve posture for the same reason US did... for 80+ years countries needed USD for US techstack and then petrodollar, aka modernity was locked behind USD, all the other muh reserve "needs" is downstream of that. Need > trust.
Ironically where trust actually comes in is whether PRC TRUSTS others. Qiushi suggests PRC stable reserve functions something like panda bond lending, where PRC lends liquidity to trusted VIP (real economy) players. Everyone else can keep gambling with USD reserve with high likelihood of debasement. It looks like PRC doesn't want be THE reserve, they want to be VIP reserve while THE (USD) reserve burns.
USD treasury isn't great now AND trending towards bag holding catastrophic "our dollar your problem" depending on debasement velocity. Hence central banks ditching dollar for gold etc... it's still currently better than other options in the sense that no other options really exist except metals with no counter party risk. More this happens the more exorbitant and less privilege USD becomes, the worse it serves as reserve, the more opening for alternatives. This where PRC eventually comes in, i.e. recent reserve talk is for eventuality not hand off. In the meantime they are banking on USD being not great, and getting worse. Which increases rates -> increase debt finance / servicing cost. The system is getting worse for everyone, including US. Don't underestimate watching US debt servicing growing from 1T to 2T in a few years when US realizes exorbitant reserve currency without privilege is not worth maintaining. Waiting for US to recognize USD reserve isn't great for US is part of the transition.
The RU sanctions were implemented 'only' because RU invaded another country. If you don't plan on invading countries is there much to worry about?
To a certain extent if you 'just' want to participate in the world economy the EUR seems fine. If you're looking to start geopolitical drama with military actions, is there any currency of a major economy that would not be a risk? Major powers tend to want stability, which would allow them to stay major, so would frown upon anyone stirring the pot (besides, perhaps, another major power: see China with Russia against UA/EU).
40% pullback but still up 150% over the past year..
Call To Action
This won't just be the big one. This could be the last one. If you've been preparing your whole life, knowing that something's coming, then this could be the thing you've been preparing for. One final opportunity to get the guys who did this. [...] The worst that can happen is you lose your monopoly money, but that's been happening anyway.The real story isn't Tokyo, it's that Wall Street built a house of cards and ran out of steady hands.
I have a public ThetaEdge card that monitors margin debt and calculates the correlation with the S&P here:
https://thetaedge.ai/public/thetix-card/42d9c6de-218d-4627-a...
$566B in margin debt. Is that actually a financial black swan amount of money? If 50% of that got "corrected" into Money Heaven on Friday, would it be more than a bad day at the stock market?
I see visible margin debt as both a canary and a proxy. It's a canary because retail cracks first (less sophisticated risk management, stricter regulatory margin). It's a proxy because when visible leverage contracts, it usually means hidden leverage is contracting too. They're exposed to the same assets. When FINRA margin debt starts falling, it's not just a warning, it's confirmation that system-wide deleveraging is already underway.
That's my 2c. Does that make sense?
Whatever shenanigans are appear in the public record, multiply by 10x to approximate of the real story.
> Does that make sense?
Yep. 1929 called. Just to gloat. They don't want their market back.
LMFAO
How can someone be starting occupy wall street and few years later fully embrace the moldbugs CEO corporate monarchy. Brilliant and dumb and scary. It's truly wild.
Basically, when currency is scarce, its value goes UP.
When currency is plentiful, its value goes DOWN.
The first scenario lowers inflation, the second raises it.
After Japans bubble economy popped in the early 90s, they had asset values FALL.
So the BoJ began stimulating the economy - trying to push UP inflation - by adding currency to the markets.
The Carry Trade illustrates one of the dangers:
Japan was trying to stimulate their own economy, to counteract the deflation caused by their bubble popping.
But money doesn’t know borders, and though the money was intended to stimulate JAPANS economy, there was nothing stopping ANYONE from purchasing that currency. It’s not like you have to live in Japan to buy Yen.
So the money (yen) was created in Japan, but ended up all over the world.
This has consequences:
* Japan ended up with mountains of US dollars. This is one of the reasons that Japan has more US Treasuries than China. This mountain of dollars lowers YOUR cost of living. Because USD is being acquired for The Carry Trade. This creates artificial demand for USD.
* Because the yen is created in Japan but is then used for international commerce, it dramatically reduces the inflation that “printing money” would normally create. This is why Japan has more debt per capita than any country by far, by a factor of over 2X
I am just an I.T. dude who invests in real estate. So what I just posted may be completely wrong.
The carry trade has existed for about four decades; that’s my summary of how it affects us, from the perspective of a small time real estate guy.
I had to fact check the Japan having most treasuries, it's true, see this chart: https://economicsinsider.com/top-15-largest-us-treasury-hold...
As an aside, the presence of "Luxembourg" and "Grand Cayman" on that chart is a bit of a tipoff as to how the global economy works.
Free money is never free.
Do you truly believe in your heart of hearts that people posting neo-MOASS wish fulfillment suffer from a lack of a voice, and no place for them to be heard? Take this seriously. More important than "a voice" is consistency and clarity of communication. The people involved in occupy wall street in 2011 weren't occupying it because they wanted to eventually join it, and I don't think that their form of economic justice would be for Wall Street to lose money in a gigantic market crash that again would result in taxpayer-funded bailouts that spurred the first protests. For transparency's sake, what are your market positions today?
They're the true Occupy Wall Street and all I'm doing is recognizing their achievement.
As an outsider to all this, it's funny how these movements always crumble as soon as there is any mainstream recognition.
You have X complaint against an institution. Let's say the institution accepts and reforms somewhat. It's pretty rare that the complainant will pat themselves on the back and say job well done. It's ultimately a game of diminishing returns.
If you have a hammer, it's not just that everything is a nail - you must find enough nails to justify continuing to use the hammer.
It crumbled when the physical encampments were forcibly removed by the police. I mean, even at the tiny encampment of UC Davis-- essentially a few camping tents-- the students got pepper sprayed and hauled off. Remember that meme? Many of those same students also faced serious jail time for a protest outside Washington Mutual Bank. It's probably difficult to sustain a movement under those conditions, no?
In any case, the message that resonated across the U.S. encampments is essentially what turned into Bernie Sanders two runs for president. That, the group behind AOC's House run, and many other important grassroots movements are the legacy of OWS. Whatever the deal is with jart's website is orthogonal to all this-- I've literally never heard about her association with OWS outside of HN.
Edit: clarification
Secondly a domain and a political movement are 2 different things. Either one can exist without the other.
The domain is not even a .org which would be befit a movement ownership
Source: trust me bro
Justine, do you think that readers here don't have eyes? The page linked is a call to financial action that, if the advice is followed, will result in yet another unsophisticated ETF pump and dump at best and a call to financial suicide at worst.
You are personally underwriting propaganda for something you are very likely invested in, targeting the most credulous. For it to appear on a site called 'Occupy Wall Street' is deliciously ironic.
Here's my disclosure: I am completely divested for both the US and Japanese market, except for transient USD cash holdings. I don't have a horse in this race. Will you follow suit?
I know very little of what happened in NYC years ago, but I would tell anyone reading the site now that it is run by actively malevolent speculators.
I do, however, know a few of your associates. Stop hanging out with grungy, unwashed sex pests, they aren't as smart as they pretend to be, and you should know that by now. It's unbecoming and frankly sad. You have the means to start life anew elsewhere, and you should take that opportunity now.
And that's where you lost credibility with me. I haven't the knowledge of these topics to express an intelligent opinion and I was considering your arguments, but then you went and lowered the bar. There's no need to level rude insults.
I'm a Leftist, fwiw. While I don't know enough to speak intelligently on this, I do resent the people at the top who plunder society for their own gains so I'm spiritually supportive of anyone who's against them.
It's also why I addressed her directly by name. I would really like her to leave the cult she's in, but I refuse to mince words about the nature of that group. She knows who the r*pists in that community are. I lost a friend to those people and I hold a grudge.
None of this is a secret and I could give a shit if me bringing it up isn't 'credible' to you. Other than the short 'don't take financial advice from internet strangers' PSA, this isn't about you.
Why don't you look inside yourself and try to figure out why you don't find it 'credible' that there might unchecked sexual violence in a insular community of wealthy, mostly male, SV crypto fascists (who are on record warmly discussing feudalism and the return of chattel slavery to the US).
81% of women in the US have been sexually harassed, myself included. Only 2% of reports are false. Your default assumptions are fucked. If you are thinking 'well.. none of the women I know have been...' You are wrong, they just don't feel safe enough around you to talk about it, and for good reason.
People who invite themselves into conversations solely to tone police and cast doubt on allegations of sexual violence are the furthest thing from an ally. Spiritually support me by learning how to not be that person around the women in your life.
Why keep posting on the dotcom when it obviously causes confusion rather than a personal domain name?
I like how the wording here (Your voices) is giving off that sarcastic and patronizing "you're welcome" tone.
Like a religious person saying "I'll pray for you" to someone non-religious, where the undertone is an obvious middle finger.
It's pretty fun.
I am curious, what would you consider success?
I do not think it failed, far from it. I can give my reasons, you first
one (started here) was successful but one failed hard
I’d just be curious to trade stories to see if we can learn from each other
My handle@iCloud if you want to reach out
I think you're confusing the Occupy Movement with the housing crisis itself.
Any anti-establishment/libertarian right-wingers would have already gotten energized years before by the Tea Party movement. Even Ron Paul's million dollar "money bomb" in donations happened a few months before Occupy. And what's the path from Occupy to right-wing extremism? Even on Fox News Occupy was a short-term blip.
The "one percent" slogan made its way directly into Bernie's campaign, so that tracks with what I assume you're calling left-wing populism. But what do you mean by "extremism" here? If it's violent extremism I don't see the connection. And if it's left-wing anarchist movements, have those grown in any significant way since the 2010s?
Since Occupy could not have existed without the Crisis, certainly some blame goes to the Crisis.
That said, Occupy shaped perception of the Crisis. Occupy trained the public to view the Crisis in terms of bad people, instead of systemic problems like incentives.
The Occupy movement, with its permanent smoke-pit adolescents like Tim Pool, Matt Taibbi, Max Keiser, and so on, has influenced public discourse ever since.
I cannot prove that Occupy, rather than the Financial Crisis alone, made possible our current dysfunctional politics (with its focus on scapegoating, conspiracy theories, magical thinking), but I notice echos of its 'memes' (in the original sense of the word), and its attitudes - not to mention I notice some of the actual participants.
https://wiki.pumpingstationone.org/wiki/Do-ocracy
> This #ows movement empowers real people to create real change from the bottom up. We want to see a general assembly in every backyard, on every street corner because we don't need Wall Street and we don't need politicians to build a better society.
Maybe at some point those people will understand that high-school approach doesn't work in the real world.
Look at the amount of change they brought, look at the amount of change that a single person like Donald Trump has brought (for better or worse, this is not an endorsement).
"Questioned on Twitter about her beliefs, she replied: "Read Mencius Moldbug.""
(Original source of that information, as cited by above paper, is https://thebaffler.com/latest/mouthbreathing-machiavellis ; I don't have a Twitter archive at my fingertips so I cannot pull up the primary source.)
I feel International coverage, and even academic studies on the movement, missed this completely at the time.
https://www.salon.com/2017/08/19/who-gets-fired-for-being-a-...
Zhang, Zhexi. 2019. "The Aesthetics of Decentralization." p.68
https://www.nationalreview.com/2017/08/libertarians-sometime...
... also, my intent was not to cast aspersions. When last I heard the name, I had a particular political leaning associated to the name and I was wondering if it had changed.
So when Japan offered 0% interest loans to traders who used it to buy USD bonds, it represents the Japan government offloading the cost of the risk premium to its citizens and giving the difference to the traders for free... But then the traders give that free money to the US government where it helps to inflate the USD currency supply to make American asset-holders richer.
The traders aren't actually profiting from the carry trade because the 4% return on US bonds doesn't cover the real inflation (loss of buying power) of the US dollar; their net worth in terms of buying power is actually the same or dropping. US asset holders are the ones actually reaping the benefit.