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The Moral Hazard Has Created The Belief You Can’t Lose

A report from the Globe and Mail. “It was Mar. 27, 2020, and the central bank had just unveiled a plan to buy Canadian government bonds at the astounding pace of at least $5-billion a week. ‘Some may suggest this is using a lot of firepower,’ Bank of Canada governor Stephen Poloz said of the program, which would help quadruple the size of the bank’s balance sheet within months. ‘But a firefighter has never been criticized for using too much water.'”

“A year later, however, economists and others are starting to assess the water damage left by the firefighters, to stick with Mr. Poloz’s metaphor. Canada is not alone. Central bankers around the world responded to the COVID-19 shock with an unparalleled surge in asset purchases. Now, they stand at the brink of a great unwinding.”

“Particularly alarming were the dramatically widening spreads between bid and ask prices in markets for U.S. and Canadian government bonds – the prices prospective buyers and sellers are offering each other. These markets are the bedrock of the entire system for borrowing and lending. Over the next two weeks, as the Bank of Canada rolled out a wave of actions to address numerous market strains, there remained an elephant in the room. The biggest tool in the bank’s arsenal – outright purchases of government bonds, known as quantitative easing – still stood unused.”

“It would be a major step for a central bank that had never tried QE before. That time came on Mar. 27, when the bank took its key rate down to 0.25 per cent – what the bank identified as its effective bottom – and announced the $5-billion-a-week bond-buying program.”

“‘That put the complete package on the table,’ Mr. Poloz said. ‘We wanted to be sizable. So we said, what would be impressive, so the markets would be calmed by it? We picked $5-billion a week – actually, we said ‘at least’ $5-billion per week,’ he said. ‘Reporters were asking me, ‘What’s the maximum, how big could it be?’ I said, ‘Well, it’s unlimited. … It’s whatever the market needs.'”

“The bank, under new governor Tiff Macklem, is still buying at least $4-billion of government bonds a week as part of a quantitative easing program. As the economic recovery picks up steam, some analysts are wondering if the bank is overplaying its hand. The central bank’s ultraeasy monetary policy and record low interest rates are contributing to a housing market frenzy and fuelling fears of inflation. Canadian home buyers, meanwhile, are gorging on cheap mortgage debt and driving real estate prices to new highs. Mr. Macklem noted in February that signs of ‘excess exuberance’ were emerging in the housing market. Things have become even more frenzied since then.”

From Better Dwelling. “Canadians are panic hoarding again… but this time it’s real estate and debt, says a Big Six bank. The country’s finance minister recently said they were ‘watching’ housing, and its impact on first-time buyers. This has BMO senior economist Robert Kavcic wondering if they understand the issue.”

“The overheating isn’t due to an economic boom either. The economy has yet to recover from pre-pandemic levels, and isn’t expected to until next year. Instead, he observes prices are rising due to the ‘widespread belief that there’s nothing to stop the momentum.’ Adding, ‘after all, we’ve been told repeatedly that interest rates aren’t moving.'”

“The moral hazard has created the belief you can’t lose, and there’s going to be a perpetual shortage of housing. Investors, first-time buyers, and even recreational users, now believe the government will work to push prices higher. ‘Canadians in some markets are now buying houses, rural properties and cottages like they were buying toilet paper a year ago.'”

The Fifth Estate. “In a chaotic time for the nation’s economy, some will find reassurance in one unchanging facet: Australian governments of all kinds, and the Reserve Bank, are committed to policies that will raise home prices. Promoting inflation in the price of residential property seems to be the formal aim of public policy. It certainly has that effect, along with another direct consequence – that of rendering home-ownership unachievable for at least a third of the population.”

“Despite the population stalling (rising demand from population growth is the usual reason people give for rising home prices) and despite a significant rise in unemployment, a radical decline in GDP and continued economic anxiety and uncertainty, Australia has returned to its default model of high house price inflation.”

From Dmarge. “Australia’s crazy expensive properties are the object of much spite. But as much as those who can’t afford them (read: us) throw barbs from our rented houses (characterising it all as a ridiculous bubble and hoping it pops), it seems determined, for now, to continue blazing into the sky. AMP Capital chief economist Shane Oliver told the ABC last year we’re living in a ‘super cycle of debt,’ comparing the early 1990s recession with now, showing how our level of household debt has increased over the last thirty years.”

“‘During the early 1990s recession, the level of household debt in Australia was around 40 per cent of income, whereas now it is close to 200 per cent — one of the highest levels in the world,’ (ABC). ‘Each time there’s a downturn people get worried about debt and pay some of it back, but before things go too far [into the positive], the Reserve Bank cuts rates and people start borrowing again — we go back to a new level of debt and it starts the cycle again.'”

The Big Smoke Australia. “In NSW, more than 37,175 people are homeless while more than 68,000 properties sit vacant. That equates to two empty properties for every person experiencing homelessness in this state. Indeed, many would say that it’s unjustifiable for a society to allow some of its members to go without shelter, while others own vacant dwellings.”

“As former Greens Senator Lee Rhiannon pointed out in 2017, the number that is left is an estimate of long-term speculative vacancies. ‘These aren’t properties in between buyers,’ she told Sydney Criminal Lawyers. ‘They’re being deliberately left vacant to speculate on rising prices.'”

“While there’s a gaping lack of affordable housing in Australia, along with talk of a housing shortage, there’s plenty of property speculation going on. Prosper Australia findings indicate that nationwide there are about 300,000 speculative vacancies, which accounts for 3% of all housing.”

“According to Ms Rhiannon, it comes down to ‘a relatively small number of people with huge wealth,’ who ‘need a place to park it.’ She questioned why someone would ‘bother with tenants and real estate agents’ when they can simply make money by letting their property ‘sit there.'”

From Jacobin Magazine. “Occupying a three-mile stretch alongside the River Thames in south London is ‘VNEB.’ Between Vauxhall and Battersea, via Nine Elms (hence the acronym), thousands of new apartments are being built. But even before the pandemic, we knew the property industry was systemically dysfunctional. As Oliver Wainwright wrote in a Guardian piece on VNEB last month: ‘Roughly the size of Monaco, the new district has all the makings of a similarly exclusive fiefdom, an international investors’ playground where regular Londoners are pushed to the very edges, or cut out of the picture altogether.'”

“Around the world, many places are already disfigured by buildings oblivious to society’s needs. The potential for such projects to stall and go bust is nothing new, but COVID-19 may accelerate this. This exposes a fundamental flaw in attitudes toward cities that only sees them as commodities. The number of long-term empty homes provides graphic evidence of a failed system. Going into the pandemic, London already had at least 22,500 of them (and ten times that number of people on social housing waiting lists).”

“None of the mega-developments currently on-site in London, New York, or other major cities were designed for 50 percent occupancy. They are also heavily reliant on public finance. For decades, ordinary residents have been pushed out of cities like London and New York to make room for offices and luxury apartments. But the pandemic has massively reduced demand for these same locations — turning city centers into ghost towns, full of shiny new buildings that no one needs. Once the pandemic has eased, we are likely to have unused buildings on an unprecedented scale.”

The New York Post. “At 60-stories high and 684-feet tall, Boston’s Millennium Tower, a residential luxury high-rise that opened in 2016, is the fourth-tallest building in the city. It is also a virtual ghost town.”

“That’s because the Millennium is less of a playground for the rich and more of a tax shelter in the sky, writes Chuck Collins in his new book, ‘The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions’, out next month.”

“‘Over 35 percent of the 443 condominiums are owned by shell companies and trusts, and almost 80 percent of the unit owners do not claim a residential exemption, indicating that the condo is not their primary home,’ writes Collins. ‘With average condominiums selling for over $4 million, Millennium Tower is not only a wealthy residence for the rich, but also a ‘wealth storage unit’ for global capital looking to park itself and hold value.'”

“Many have used anonymous shell companies to park their wealth in luxury real estate in big cities nationwide, such as the Millennium in Boston and One57 on New York’s Central Park. According to The New York Times, ’54 percent of real estate purchased in New York for more than $5 million was acquired in the name of anonymous shell companies’ in 2014, Collins writes. ‘In the six most expensive condo projects in the city, the owners in a majority of units were hidden by shell companies, including 77 percent of the units in One57 and 69 percent of the units at The Plaza. The value of the 900 condominiums in these six buildings was equal to the value of 20,000 average American homes.'”

This Post Has 149 Comments
  1. There’s a bit of “the dog ate my homework” thing about how the media looks at what these central bankers get up to. The amount of fake money these idiots have created since the Chinese communists unleashed this virus on the world is simply criminal. And if we were to go back a couple of decades they would have been the first to say it was illegal.

    Greenspan used to talk about moral hazard all the time as did other at this so called “bank.” Now they haven’t used the words publicly for many years. But the doesn’t mean the dangerous issue ceased to exist, far from it. I appreciate the writer at Better Dwelling for bringing it up.

    1. The amount of fake money these idiots have created since the Chinese communists unleashed this virus on the world is simply criminal

      And it’s only going to get worse. From the CNN website:

      There are ‘definitely merits’ to reparations, says the first Black Fed president

      So how many more trillions are going to be borrowed into existence to fund reparations? MMT evangelists say that the sky is the limit. $10 for a loaf of ordinary, store brand bread might say otherwise.

      1. At this point, I hope they really do try the reparations. Let them fight over the calculations for a couple years. Then let them print the money to pay it. Then wait and watch while the BIPOCs argue that it’s “not enough, like we want the million bucks we would have had if we got our munny 150 years ago.”

        By then we’ll be split into the USSA and Jesusland, or we’ll be China West.

        1. Then wait and watch while the BIPOCs argue

          I expect that Mexican-Americans will demand their share of reparations, claiming that the US stole their land from their ancestors. It won’t matter if their ancestors lived in Oaxaca or Veracruz at the time,.

          1. Didn’t Spain steal it from them?

            In theory they got it back in 1821.

            That said, Mexico’s current president, AMLO, has suggested that Spain owes Mexico reparations because of the Conquista. The Spanish Prime Minister told him to go pound sand.

          2. Mexico sent an army and LOST that land in a legit war. By that reasoning, Britain would demand reparations from the US for stealing the 13 colonies from them.

        2. By then we’ll be split into the USSA and Jesusland

          It won’t be that easy. Even in the reddest of states, the bigger cities are at least purple. Even in places like Montana the cities (Bozeman, Missoula, etc.) are blue.

          1. Even in places like NY State, the area outside the cities is populated by Constitution loving people.

      2. “$10 for a loaf of ordinary, store brand bread”

        I don’t think you have to worry about that. Not now. Not ever.

  2. ‘We wanted to be sizable. So we said, what would be impressive, so the markets would be calmed by it? We picked $5-billion a week – actually, we said ‘at least’ $5-billion per week,’ he said. ‘Reporters were asking me, ‘What’s the maximum, how big could it be?’ I said, ‘Well, it’s unlimited. … It’s whatever the market needs’

    First Steve, you are an a$$hat. Oh but you are the magic people, aren’t you? Why not 7, why not 50 a week. “Ha ha, we’re gods chosen people”, here to save the world from yet another “crisis” the guberments set up in the first place.

    You aren’t fooling anyone.

    1. they arent fooling the (relatively few) that are paying attention.

      The wide swath of the middle class and upper middle class meanwhile are counting their ‘appreciation’ and making offers of 10-15% above asking. There is no pretense of making payments for the next 20 or 30 years – and these folks think that they will cash out at some point

  3. The Hill — Biden faces decision time on eviction moratorium (3/28/2021):

    ” TRENDING:

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    Biden faces decision time on eviction moratorium
    By Sylvan Lane – 03/28/21 04:22 PM EDT
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    President Biden must decide by Wednesday whether to extend a federal eviction ban as his administration races to send out billions in housing aid to millions of Americans struggling to afford rent.

    An eviction moratorium imposed by the Centers for Disease Control and Prevention (CDC) in September is set to expire at the end of the month and is teetering on shaky legal ground after losses in federal court.

    Even with an accelerating vaccination campaign, COVID-19 cases are delaying a return to normal economic life and prolonging the recovery for vulnerable households.

    More than 10 million Americans are facing housing insecurity, 5.4 million expect to face eviction or foreclosure soon, and more than 78 million said they’re having trouble covering basic expenses, according to a Census Bureau survey conducted earlier this month.”

    https://thehill.com/policy/finance/housing/545187-biden-faces-decision-time-on-eviction-moratorium

    “Shaky legal ground?”

    1. Update — evidently the container ship is totally free now and moving through the Suez canal. Price of oil steady.

    2. “decision time on eviction moratorium”

      I don’t see how they could not kick the can at this point.

      1. IMO (YMMV) we need to wait for enough vaccine to be available to the general public before saying “OK we’re done, no more excuses.” Medically, my guess is we won’t be fully maskless until the start of the school year. Economically, after that they still might say there’s “too much residual economic damage” or such like to establish a UBI and other socialist fun stuff.

        1. enough vaccine to be available to the general public before saying
          Some states have already opened for everyone over 18. My state opens on April 7th. Lots of appointment opening this week according to the email I received.

          1. My state is continuing down its commie path. They aren’t opening it up to everyone until April 27. I’m sure it will be a while before I can pinpoint a J&J.

        2. MO (YMMV) we need to wait for enough vaccine to be available to the general public before saying “OK we’re done, no more excuses.”

          Do you really think that will happen? That they will allow millions, possibly tens of millions to be evicted?

          This is a bad time for mom and pop landlords. If they are already stuck with deadbeats they might as well let the lender foreclose.

          1. do you really think

            Please note I put in a sentence about residual economic damage to install socialist fun stuff, which might include cancelling rent. The Supremes are going to be busy.

  4. ‘less of a playground for the rich and more of a tax shelter in the sky’

    I’ve noted before that people seem to gravitate toward either or positions that they use to define the world. Rich versus poor. Empty shacks versus homeless people. From a housing mania perspective, canyons of empty super lux airboxes simply shows this shortage crap is just crap. And a mania is easily exposed in a number of similar ways.

    For instance: demand is so high, there are so many buyers! OK, get the guberment out of the shack loan guarantee business and crater. There’s so much money out there! Right, and that’s why the guberment is send out checks.

    Call it what you will. Emperors new clothes, elephant in the room. The whole thing is a psychological phenomenon that used to happen very rarely. Now we are plagued with it. Why is that?

    1. The “money on the sidelines” is a beaut. Whenever I hear it, I know I’m being lied to and listen even more closely to what the liar is pimping.

      1. Credit Suisse loses $5 billion in market value after warning of a big hit following Archegos blow-up

        ‘The stark warning strikes a sharp contrast to Credit Suisse’s bullish trading update earlier this month. The lender said it generated the most pre-tax income in a decade in both January and February, and its overall investment-bank revenues were tracking more than 50% ahead of last year.’

        ‘Credit Suisse is already embroiled in the Greensill Capital fiasco. It’s only managed to claw back $50 million of the $140 million it loaned to the hedge fund, which filed for insolvency this month.’

        https://markets.businessinsider.com/news/stocks/credit-suisse-market-capitalization-archegos-hwang-margin-call-stock-sales-2021-3-1030253684

        Who moved my cheese?

        1. ‘A number of large block trades on Friday credited with causing big drops in a clutch of stocks were linked to investment fund Archegos Capital, a source familiar with the situation said, raising worries about more volatile trading in the coming days. Shares in ViacomCBS Corp. and Discovery Communications Inc. tumbled around 27 per cent each on Friday, while U.S.-listed shares of China-based Baidu Inc. and Tencent Music Entertainment Group plunged during the week, dropping as much as 33.5 per cent and 48.5 per cent, respectively, from Tuesday’s closing levels.’

          ‘Investors and analysts cited blocks of Viacom and Discovery shares being put in the market on Friday for likely exacerbating the decline in those stocks. Viacom was also downgraded by Wells Fargo on Friday.’

          “It’s insane,” said Edward Moya, senior market analyst at OANDA. “When you consider how some of these companies have skyrocketed over the last few months, there will be concerns that we are overlevered.”

          https://www.theglobeandmail.com/business/international-business/article-large-block-trades-that-caused-selling-raises-questions-about-cause/

        2. How long before leveraged wrong-way bets blow up the financial system?

          Billions in Secret Derivatives at Center of Archegos Blowup

          https://www.bloomberg.com/news/articles/2021-03-29/billions-in-secretive-derivatives-at-center-of-archegos-blowup?srnd=premium&sref=ibr3A0ff

          The forced liquidation of more than $20 billion in holdings linked to Bill Hwang’s investment firm is drawing attention to the covert financial instruments he used to build large stakes in companies.

          Much of the leverage used by Hwang’s Archegos Capital Management was provided by banks including Nomura Holdings Inc. and Credit Suisse Group AG through swaps or so-called contracts-for-difference, according to people with direct knowledge of the deals. It means Archegos may never actually have owned most of the underlying securities — if any at all.

          1. How long before the central bankers trot out their “too big to fail/systematically risky” rhetoric
            to justify bailing out their friends in high places who signed up for and enabled this debacle?

          2. what I dont get with all the trillions floating around they should have had plenty of time to absorb the trades with maybe a 5-10% discount not 40%…., they must have had a hard deadline all stocks must be sold by 4pm no excuses.

        3. Seems like the Plunge Protection Team is on the beat today, as U.S. headline stock market indexes are as flat as a pancake while they sort out this mess, despite selloffs in other major markets and cratering prices of certain investment bank shares.

          1. The Financial Times
            Opinion Markets Insight
            Archegos blow-up poses hard questions for Wall Street
            Biggest hedge fund collapse since LTCM raises concerns over level of exposure enabled by big banks
            Bill Hwang, pictured in 2012, runs Archegos, a remarkably opaque investment group
            Robin Wigglesworth 2 hours ago

            It is still unclear exactly where Archegos Capital fits into the annals of spectacular hedge fund blow-ups. But the early signs are that it will probably prove the biggest since Long-Term Capital Management’s collapse in 1998.

            The saga erupted into the open last Friday, when Goldman Sachs and Morgan Stanley broke cover and started dumping multibillion-dollar positions in US and Chinese stocks. They did it on behalf of an unnamed investment fund that had failed a “margin call” — essentially a demand to put up more collateral against its trades or face a forced liquidation.

            That sparked an epic whodunnit across markets, with Archegos — an obscure, remarkably opaque investment group run by Bill Hwang, a former Tiger Management hedge fund manager with a chequered past, quickly identified as the primary party involved. By Monday, Credit Suisse and Nomura were admitting that they would probably lose billions of dollars in the fallout.

            At this early stage, there are still far more questions than answers. Here are some of the more pressing ones.

            First and foremost: What on earth were some of the world’s biggest investment banks thinking when they enabled an opaque family office whose founder had a history of regulatory issues to rack up multibillion dollars worth of leverage? Hwang paid $44m in fines to settle US illegal trading charges in 2012, and in 2014 he was banned from trading in Hong Kong.

          2. Here we go again. Take we work (they actually didn’t work much). How could some half a$$ early morning drinker screw up such a sure fire gambit as “renting f*****g desks”?

          3. Just one billionaire in his office hedge fund (ex-Tiger Investments guy) causes this level of pain by using leverage.

            What could 100’s millions of homebuyers around the world do with overpriced bids.

            That sparked an epic whodunnit across markets, with Archegos — an obscure, remarkably opaque investment group run by Bill Hwang, a former Tiger Management hedge fund manager with a chequered past, quickly identified as the primary party involved. By Monday, Credit Suisse and Nomura were admitting that they would probably lose billions of dollars in the fallout.

          4. obscure, remarkably opaque investment group run by Bill Hwang

            Meanwhile, the SEC made noises about going after retail investors on Reddit smh. 🙄

          5. How could some half a$$ early morning drinker screw up such a sure fire gambit as “renting f*****g desks”?

            The same way that a food delivery/taxi service is considered “tech”.

    2. is not only a wealthy residence for the rich, but also a ‘wealth storage unit’ for global capital looking to park itself and hold value.’”
      Why would you spend Millions PLUS HOA fees in the 10’s of thousands at least and prop.taxes in the 10’s of thousands at least every year for an illiquid asset you rarely use, especially after what happened to condo prices 10-12 years ago. Doesn’t history often repeat itself?

      1. Some of these media above have an agenda. So they point to some of this like it’s recently happened. This unused lux airbox bubble popped years ago. In London, NYC, Miami, etc. As for the why, greed. In London, it was sold as a place very wealthy Asians would “park” money, in NYC it was a similar theme. Problem was, as one pundit pointed out, “there aren’t as many billionaires as we thought,” and they’ve vastly overbuilt the space. Such an overreaction is actually typical with manias. The story is exaggerated, the true demand is exaggerated, and when it becomes obvious they fooked up, it’s too late.

        If you look at the Australian part with water usage showing huge numbers of empty airboxes, it was a similar greed angle, but not lux. Seeking not so wealthy Chinese gamblers, they threw up towers that were crap design and outcome in places like Brisbane. What did it matter? They would sell out before the hole was dug, these “investors” would never see them. And at some point they look around and ask, “who’s responsible for this gotdam mess?” when it played out right out in the open and nobody cared cuz so much money was being made.

    3. I’m just grateful that they are buying airboxes sitting on 0.00 acres. Imagine if the Chinese and other foreigners were instead buying up entire states worth of farmland, especially east of the Mississippi where all the water is. I’m not too worried about Bill Gates owning land.. unless he decides to sell out.

      1. Imagine if the Chinese and other foreigners were instead buying up entire states worth of farmland, especially east of the Mississippi where all the water is.

        No need to imagine.

        Chinese Investment Near Texas Military Base Draws Scrutiny

        A wind farm in Texas near the Air Force’s largest pilot training base came under the spotlight in recent weeks because the owner is a Chinese businessman described as a “carpetbagger” with strong ties to the communist regime in China.

        Over 130,000 acres of Texas ranch land—an area the size of Tulsa, Oklahoma—was sold beginning in 2015 to China-based Guanghui Energy Co.

        Guanghui acquired the land in Val Verde County, Texas, with a proposal to build 50 to 130 wind turbines. The land is near Laughlin Air Force Base, the Air Force’s largest pilot training facility, and a few dozen miles away from the U.S.–Mexico border.

        1. Kyle Bass, the founder and chief investment officer of Dallas-based Hayman Capital Management, told Fox Business on Dec. 8, “It’s insane that we allow the former Chinese PLA general to go buy 200 square miles of land in the United States.”

          Bass posted a series of tweets last week raising concerns about the Chinese ownership of the land, after his visit to the area.

          This ranch land also sits on the US border with Mexico and boasts a 30,000 sq. ft. lodge and a private runway which helps the Chinese owners ferry people and cargo in and out of the border region with limited to no oversight by US authorities,” he wrote on Twitter. (emphasis added)

        2. ‘Over 130,000 acres…an area the size of Tulsa, Oklahoma’

          Sounds like a shortage of land in Tulsa.

      2. Saudi Arabia is buying up the water under AZ to grow alfalfa, I’m sure there is more of this going on

  5. “and he provides that no one will be able to buy or to sell, except the one who has the mark, either the name of the beast or the number of his name.” — Revelation 13:17

    Washington Post — ‘Vaccine passports’ are on the way, but developing them won’t be easy (3/28/2021):

    “The Biden administration and private companies are working to develop a standard way of handling credentials — often referred to as “vaccine passports” — that would allow Americans to prove they have been vaccinated against the novel coronavirus as businesses try to reopen.

    The effort has gained momentum amid President Biden’s pledge that the nation will start to regain normalcy this summer and with a growing number of companies — from cruise lines to sports teams — saying they will require proof of vaccination before opening their doors again.

    The administration’s initiative has been driven largely by arms of the Department of Health and Human Services, including an office devoted to health information technology, said five officials who spoke on the condition of anonymity to discuss the effort. The White House this month took on a bigger role coordinating government agencies involved in the work, led by coronavirus coordinator Jeff Zients, with a goal of announcing updates in coming days, said one official.”

    https://archive.is/8B9e1

    This from the same globalists who tell you it’s racist to require an ID to vote.

    1. often referred to as “vaccine passports
      I was watching a video a few weeks ago and a tech “guru” (don’t remember the name) was saying that people in the future will WANT to be chippped because it will make there life more efficient and easier. Everything they need will always be on them.

        1. Wouldn’t a fingerprint suffice?
          The chip would contain a lot of data. Like a smart phone chip. Walk in buy something and walk right out with the chip IN you recording the transaction and paying. Same with train fares.
          Like an Iphone chip, only chip is in you not carried by you.

          1. It’s better for the tyrants if that data is stored centrally, easier for them to access. Chips can malfunction, or be sabotaged. You could wear more than one, and activate the one which is most useful at the moment.

            A thumbprint or a retinal scan will identify you. They don’t need to chip you. You already have your unique ID built into you.

  6. ‘Canadians in some markets are now buying houses, rural properties and cottages like they were buying toilet paper a year ago’

    At the time I wondered why the guberments didn’t directly address hoarding. There never was a shortage of toilet paper, or onions or potatoes. But there they sat, watching the world go mad while they drummed fear into every “official” sentence. And the media was only too happy to go along. Where was the questioning about the lack of bring out yer dead carts? Why was it only “fringe” websites that mentioned motorcycle deaths being “caused” by CCP virus? And why are we still under this bizarre censorship on so may levels?

    Because you know, this isn’t going to go on forever. There is already a great reexamination of this shameful period.

    1. ‘Where was the questioning about the lack of bring out yer dead carts?’

      It’s right next to all the people refusing to go bar hopping or hook up on Spring Break until they get their vaccine passports.

      ‘The effort has gained momentum’

  7. Heckova job, central bankers.

    Canadian Consumer Sentiment Hits Another Record on Housing

    https://www.bloomberg.com/news/articles/2021-03-29/canadian-consumer-sentiment-hits-another-record-on-housing?srnd=premium&sref=ibr3A0ff

    Canadian consumer confidence rose to a new record last week as vaccine rollouts accelerate across the country and the nation’s housing market booms.

    The Bloomberg Nanos Canadian Confidence Index, a measure of sentiment based on household surveys, jumped last week to its highest reading since polling began in 2008.

    1. This is astounding – with this level of delusion, home prices will rise for the next couple of years. This must have been like in Florida in 2005 – where strippers owned 5 houses (Big Short book and movie)

      Optimism over housing is at record highs, with 63 per cent of respondents saying the value of real estate in their neighborhood will increase in the next six months.

      There’s also growing optimism over the economic outlook. About 42 per cent of Canadians expect the economy to be stronger in the next half year, which is the highest share of respondents for this question since 2010.

          1. When we talk about the phrase “Real Journalists” understand that these are, in fact, the Real Journalists but they’re just too ugly to get on TeeVee.

            Every one of these creatures in this picture has a Twitter Blue Checkmark. This is what Real Journalists are in the USS and A in the current year 2021.

            Do not adjust your television set. This is the “fundamental transformation” that you were promised.

  8. For the fools that think the uber wealthy will pay higher democrat marxists taxes and why taxes for the rich always, eventually, fall on the middle class.

    “The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions’, out next month.”

    1. Speaking of moral hazard, doesn’t the prospect of too-big-to-fail bailouts help explain the seemingly insane gambling on excessive leverage at Archegos Capital Management (not to be confused with Long Term Capital Management)?

      1. The Wall Street Journal
        U.S. Markets
        Stocks Fall as Banks Warn of Losses
        Shares in global banks tumbled after Credit Suisse and Nomura warned that they could incur substantial losses from dealings with a U.S. client
        A U.S. investment firm swiftly sold large stakes in companies including ViacomCBS last week, sending their stocks tumbling.
        By Anna Hirtenstein
        Updated March 29, 2021 10:02 am ET

        U.S. stocks edged lower Monday, pressured by declines in bank shares.

        The Dow Jones Industrial Average inched down 36 points, or 0.1%. The S&P 500 declined 0.4%, retreating from a record Friday, and the Nasdaq Composite fell 0.7%.

        Financial stocks led declines after a large investment fund last week unwound billions of dollars in holdings, triggering concern that global banks that dealt with the firm could face sharp losses.

    2. Speaking for myself, it’s the principle of mean reversion keeping me out of the Stonk market. Plus, it’s rigged against me.

    1. reasonable rents. What are you concerned about?

      – listing price?
      – tenants not paying due to covid eviction pause?

    2. This is a few blocks from mostly abandoned downtown Joliet and the new courthouse. It’s not a nice area, I’ve been near here dozens of times. Stay away. You’ll be collecting rent in person.

      1. “Stay away. You’ll be collecting rent in person.”

        Haha, so true! These are also the kind of tenants that managers don’t waste money obtaining a FICO credit score.

    3. Funny that the broker failed to mention the current assessed market value of $375K. That 7.20% cap rate might be inaccurate when the sale could result in a tax bill increase from $12K to almost $40K per year. Consider that along with the other surprises that a 1900 built longtime low end apartment building might hold!

  9. – Central bankers are analogous to Dr. Frankenstein in that they’ve created another monster, meaning another asset bubble. However, this one’s the mother of all bubbles (MOAB). Recall that they’re outside of government; no accountability, no checks and balances, and unelected. Torches and pitchforks coming soon.

    From Better Dwelling. “Canadians are panic hoarding again… but this time it’s real estate and debt, says a Big Six bank. The country’s finance minister recently said they were ‘watching’ housing, and its impact on first-time buyers. This has BMO senior economist Robert Kavcic wondering if they understand the issue.”

    The overheating isn’t due to an economic boom either. The economy has yet to recover from pre-pandemic levels, and isn’t expected to until next year. Instead, he observes prices are rising due to the ‘widespread belief that there’s nothing to stop the momentum.’ Adding, ‘after all, we’ve been told repeatedly that interest rates aren’t moving.’”

    The moral hazard has created the belief you can’t lose, and there’s going to be a perpetual shortage of housing. Investors, first-time buyers, and even recreational users, now believe the government will work to push prices higher. ‘Canadians in some markets are now buying houses, rural properties and cottages like they were buying toilet paper a year ago.’”

    https://www.wsj.com/articles/house-prices-are-inflating-around-the-world-11616932846?reflink=desktopwebshare_twitter

    [paywall]

    World
    House Prices Are Inflating Around the World
    Pandemic-related stimulus, ultralow rates and changes in buyer behavior are turbocharging markets from Europe to Asia

    By Mike Cherney in Sydney and Patricia Kowsmann in Lisbon
    March 28, 2021 8:00 am ET

    As the U.S. housing market booms, a parallel rise in residential real-estate prices across the world from Amsterdam to Auckland is raising fears of possible bubbles and prompting some governments to intervene to prevent their markets from overheating.

    Policy makers were already worried about high property prices in parts of Europe, Asia and Canada before the pandemic, especially as years of low interest rates kept demand strong.

    But now the trillions of dollars of stimulus deployed world-wide to fight the effects of Covid-19, along with changes in buying patterns as more people work from home, are turbocharging markets further.

    That is putting policy makers in a bind. Many want to keep interest rates low to sustain the post-pandemic recovery, but they worry about people taking on too much debt to buy houses whose prices could stagnate or fall later. Other tools they have to cool demand, like tighter mortgage restrictions, aren’t always working, or are being postponed as authorities try to ensure broader economic growth stays on track.

    https://www.ineteconomics.org/perspectives/blog/the-full-case-against-ultra-low-and-negative-interest-rates

    The Full Case Against Ultra Low and Negative Interest Rates

    By William White
    Mar 17, 2021

    Perhaps more importantly, there is reason to believe that the effectiveness of monetary stimulus diminishes with extended or repeated use. Lower rates induce people to borrow and to spend today what they would otherwise have spent tomorrow. The ratio of global debt (governments plus households and corporates) to GDP had in fact risen by over 50 percentage points prior to the pandemic. However, if the spending is used for unproductive purposes, as is often the case, then the buildup of debt eventually becomes burdensome and slows future spending. In short, there is a negative feedback loop, once referred to by Chairman Greenspan as “headwinds”. At first, these can be offset by ever more aggressive easing but, as the headwinds grow commensurately, monetary policy eventually ceases to work at all.

    Growing ineffectiveness is a problem in itself. The ammunition to fight future battles is no longer available. But a bigger problem is that, if monetary stimulus is sustained for a long period, then undesirable side effects accumulate. The first of these is the higher debt level, which increases systemic risk in almost all states of nature. In the midst of the Great Depression, Irving Fisher sketched out how a debt/deflation process can play out with devastating consequences. As noted above, Paul Volcker shared these concerns quite recently.

    However, debt accumulation is not the only unintended consequence of relying on monetary stimulus. Such policies also threaten financial stability in various ways. They pose a danger to the survival of financial institutions and to pension funds by squeezing net returns on traditional assets. Moreover, institutions subject to such threats then “reach for yield” in an attempt to compensate, often leaving themselves open to risks that they had not anticipated and have no experience of managing. A related concern is that of growing “moral hazard.Every time a problem materializes, the central banks or regulators create another safety net to protect the exposed, which then encourages them to behave even more badly.

    Similarly, unusually easy monetary conditions over long periods can threaten the effective functioning of financial markets. In recent years, we have documented: recurrent “flash crashes”; waves of Risk-On and Risk-Off behavior; persistent “anomalies” from normal price relationships; growing evidence that normal “price discovery” has been suppressed; and finally, the near-collapse of the US Treasuries market in September 2019 and March 2020. Moreover, easy monetary conditions lead to continuing increases (bubbles?) in the prices of virtually all financial assets and often to real assets (like houses and other property) as well. For a long while, these price increases can mask the other undesired consequences of easy monetary conditions but, as “fundamentals” eventually reassert themselves, a price collapse can easily follow.

    – Central bankers are a$$holes. They’re destroying the world economy. Tar and feathers would be to kind. Nothing was fixed after the GFC of 2008-09. Only more of the same. We were already heading for another financial meltdown before the CCP virus pandemic, due to Central Bank policies since the GFC. From bubble to bubble, but bubbles always burst. Plan accordingly.

    1. ‘Torches and pitchforks coming soon.’ I think the kids raised in the suburbs on soccer and participation trophies wouldn’t touch a torch nor a pitchfork. Because ‘Safety’.

      It’s the kids in flyover that were raised to put work boots on every morning, before football practice, that I wonder about. Maybe they still have the revolutionary spirit of their forefathers. I hope so.

        1. Once they have grown up, the great cleansing will begin.

          Useful whites, the ones who can keep the lights, other infrastructure and industry up and running, will be spared. Think South Africa. Unlike South Africa, the other whites won’t be encouraged to leave. Besides, who would take them?

        2. My 2 cents is that I think ‘Real American’ in flyover will come to mean supporting a strong man character instead of freedom. South Africa may be the model for the commies, but I don’t think it’s a done deal. Not by a long shot.

          1. My 2 cents is that I think ‘Real American’ in flyover will come to mean supporting a strong man character instead of freedom.

            Since the eventual war will be based on race, I could see a strongman, along the lines of Franco or Pinochet, rising,

  10. – Extend and pretend forever… This, in spite of the fact that we’re soon approaching “herd immunity.” So what happens when we get there and there’s not longer a reason for deferrals, moratoria, or forbearances? When does this insanity end?

    The Party seeks power entirely for its own sake. We are not interested in the good of others; we are interested solely in power. . . . Power is not a means; it is an end . . . not power over things, but over men. . . . In our world there will be no emotions except fear, rage, triumph, and self-abasement. . . . There will be no loyalty, except loyalty toward the Party. There will be no love, except the love of Big Brother. . . . Always, at every moment, there will be the thrill of victory, the sensation of trampling on an enemy who is helpless. If you want a picture of the future, imagine a boot stamping on a human face forever.” – George Orwell, 1984

    https://www.cdc.gov/coronavirus/2019-ncov/covid-eviction-declaration.html

    “Temporary” Halt in Residential Evictions to Prevent the Further Spread of COVID-19
    Updated Mar. 29, 2021

    “On January 29, 2021, following an assessment of the ongoing pandemic, the CDC Director renewed the Order until March 31, 2021. This Order further extends and modifies the prior Eviction Moratoria until June 30, 2021, for the reasons described herein, based on the changing public health landscape. To the extent any provision of this Order conflicts with prior Orders, this Order is controlling. The reasons described herein, subject to revision.”

    1. Why would anyone want to get into renting property as a mom and pop landlord after this? I can only imagine people will still line up to snap up multi-family units or lower priced houses with anticipation of some kind of cash flow from tenants. What happens if we get another pandemic in the next decade or sooner?

      1. “another pandemic in the next decade or sooner?”

        What makes you think that globalists are going to ever allow this one to end?

        This has never been about public health, it is about the liquidation of the Kulaks.

        1. I get it, crisis = opportunity. But , ok, genocide in our lifetime, in the USA? Nobody will believe it.

          1. The “un-personing” phase is already well underway. I’ve read enough European and Russian history of the 20th century to recognize the signs, and expect what’s coming.

          2. Nobody will believe it.

            The kids are already being trained to hate themselves. They’ll probably report voluntarily to their executions, like those people did in that Star Trek episode about a virtual war.

          3. I’ve read enough European and Russian history of the 20th century to recognize the signs, and expect what’s coming.

            I am wondering where to go, and how to get papers to do so. I have the legal right to move to Mexico, though they are pretty messed up in their own way.

            I’m also fairly sure that the USSA will put pressure on LatAm countries to deport gringo refugees back to the US.

          4. The kids are already being trained to hate themselves.

            And to view other people as disease vectors => dehumanization and depopulation

          5. “They’ll probably report voluntarily to their executions, like those people did in that Star Trek episode about a virtual war.”

            This is just too realistic for prime time! LMFAO!!

          1. Welcome to the perma-pandemic.

            Cases “spiking”? Not according to the graphs on the worldometer website

          2. I’m not clicking on that.

            Can we please agree to start using archive dot is links before sharing articles from globalist sources?

            New York Times
            Washington Post
            CNN (I just threw up inside of my mouth).

            No links = no clicks = no ad revenue for these globalist pigmen. Take a minute out of your day, just a minute, and deny even one additional fractional penny to these anti-Constitutional pigmen.

            We starve them. $0.01 at a time…

          3. A disease so fatal, you have to be tested to know if you’re sick.

            Funny, how other deadly diseases are very obvious. And I’ve never heard of a “flu test.”

    2. June 30. That’s about the date I would expect My state is opening up vaccines for everyone on April 27. That gives me about a month to find a vaccine and another 3 weeks to ramp up immunity.
      I fully expect Biden to celebrate “his” “historic” 🙄 success on July 4 — we’re free etc — complete with nonstop media spooge. And then let the BK and evictions begin.

      1. Realtor, nothing will ever be opening up in Maryland.

        How much of your property taxes goes to the local school district to teach English as a second language?

        From your own description, on this blog, going back for years now, you live in a El Salvador suburban ghetto in Maryland. This is your anchor, this is your albatross.

        Please tell us how much money?

        1. I don’t know how property taxes are split up, but on a percentage basis, I pay less than a friend of mine in the Midwest pays. And el Salvadoran ghetto or not, I feel pretty safe. The populace is working their way up the trades and actually accomplishing something, which is more than I can say for the snowflake wokerati who spend their days navel-gazing and waiting for someone to pony up for their four-year frat party. House prices are rising and yet someone is paying those and living in the houses.

  11. yahoo is allowing comments again
    Welcome to Yahoo comments! Please keep conversations courteous and on-topic. See our community guidelines for more information.

    1. Good luck with that but this is where we are heading.

      When the capital flees and the shelves are bare, they will scratch their heads wondering what happened.

      1. Speaking of the end of the road: South Africa is considering taxing up to 7% of its people’s wealth, annually. A sure sign that their end is near and their house of cards is about to completely collapse. It seems that South Africa’s western benefactors have vanished. It’s Zimbabwe time for South Africa.

        1. South Africa is considering taxing up to 7% of its people’s wealth, annually
          This wealth tax would START at the equivalent of $250,000 USDs. That is right, (3.82 M Rand or $250,000)
          That is right, if you are worth more than $250,000 you are rich.

          1. Whats going to happen to Dingo Dinkelman and all his snakes ??

            South Africa is considering taxing up to 7% of its people’s wealth, annually

    1. This is the right defense, plus he was Driving the car….that is a scary thought if he got away. What i learned from OJ and paralegal school was what was the first action that started the chain of events, it was floyd and his criminal buds trying to pass a fake 20.

      1. Alan Dershowitz and another Minnesota attorney were on with Laura Ingraham last night. Dershowitz opined that’ll it’ll come down to the judge’s jury instructions on causation. If it’s a “but for” standard, the prosecution will win. “But for” the knee to his neck, Floyd would still be alive. The autopsy findings don’t support that however.

        Gregg Jarrett was on with Sean Hannity earlier. Both were majorly towing the narrative.

        1. The police, soldiers, et al deserve a peer review process similar to a pilot’s actions being scrutinized. The general public has no idea what these professionals encounter on a daily basis, or the training required of the job. Civilians passing judgement on professional’s actions in high risk jobs is disgusting.

          FWIW, I’ve had a number of encounters with the police back in my hot-rod days, but none of them resulted in a violent struggle and being restrained. But getting a parking ticket seems to elicit an MMA fight with these ghetto rats.

    2. Facts won’t matter in this case. If former police officer Derek Chauvin is acquitted American cities will be torched.

      1. This is true. He’s already been tried and convicted in the press, with the standing threat of riots if the jury fails to reach the same verdict. The chance of a fair trial is nil.

  12. President Biden on Monday called on governors and mayors to maintain or reinstate mask-wearing orders, saying that because of “reckless behavior,” the coronavirus was again spreading fast, threatening the progress the nation has made so far against the pandemic.

    They’ll be yammering about wearing masks even when we’re down to 10 infections per day. Even though it did nothing to stop the spread. And despite the fact that it’s spring break, cases have not risen dramatically as they predicted.

    1. Down here in Dumver, mask koolaiders don’t just lick the boot, they bite the boot, they suck on the boot.

      It’s so Dickens’ Oliver Twist: “please sir, may I have some more” with these Reddit neckbeards.

    1. His CDC puppet was crying on TeeVee today 🙁

      Nobody elected any of these people. There is no “pandemic clause” in the United States Constitution.

      The time for debate is over, it’s time for ropes.

      We are done with you people, and we are taking our country back.

  13. Cockroach Theory suggests there are plenty of other lenders quietly incubating underwater margin loans that await their turns to hatch.

    Brings to mind when Bear Stearns blew up in March 2008. That was a single, solitary cockroach. It took another six months for an entire large extended family of cockroaches, including Lehman Brothers, Fannie Mae and Freddie Mac, to blow up in too-big-to-fail synchronicity.

    1. A hedge-fund liquidation has wiped billions from Chinese and US stocks, and no one knows what’s going to happen next
      Harry Robertson
      Mar. 29, 2021, 02:33 PM
      Traders and investors are wondering whether more share sales will hit the market
      – Credit Suisse and Nomura said on Monday that they could take big hits from their exposure to a US hedge fund.
      – The fund, reported to be Archegos Capital Management, triggered $20 billion worth of selling on Friday.
      – Some analysts said the selling could blow over, but others are worried it could have a wider impact.

      Two major banks have said they could face big losses from their exposure to a hedge fund, leaving traders and investors wondering what happens next.

      Among the banks hit by the wave of selling was Credit Suisse, which said on Monday that it and other unnamed lenders were selling positions related to the fund. Traders were guessing about who was exposed ahead of the US market open.

      Reports over the weekend said Archegos Capital Management had been at the root of about $20 billion worth of sales of companies such as the US media group ViacomCBS and several Chinese tech stocks including Tencent and Baidu.

      Archegos manages the wealth of Bill Hwang, a protégé of the famous Tiger Management hedge fund who pleaded guilty to wire fraud in 2012. Its website has been taken offline, and the firm was unavailable for comment.

      Morgan Stanley and Goldman Sachs, which acted as lenders to Archegos and processed some of its trades, forced the fund to sell shares to cover potential losses after the price of Viacom started to tumble, the Financial Times reported on Sunday. The sales wiped about $35 billion of market value from certain companies on Friday.

      Morgan Stanley and Goldman Sachs did not respond to a request for comment.

      On Monday it became clear that other banks were caught up in Archegos’ sales when Credit Suisse and Japan’s Nomura issued warnings to investors.

      Credit Suisse’s shares tumbled as much as 14% after it said the losses stemming from its involvement with a US fund “could be highly significant and material to our first quarter results.” Nomura slumped 16% after it said it could take a $2 billion hit.

      The Swiss bank said a “significant US-based hedge fund” had failed to meet margin calls. A margin call is a demand from a lender that a borrower stump up more cash to cover potential losses on its bets.

      Credit Suisse said that it and “a number of other banks” were selling the fund’s investments, generating uncertainty about who was exposed. The bank declined to comment further.

      Markets worry about more selling

      “Billions of dollars in block trades went through on Friday,” Steen Jakobsen, the chief investment officer at Saxo Bank, said in an email. “And there is uncertainty over how much more of the hedge fund’s holdings remain and could hit the market this week.”

      He added that “whether the Archegos situation is a unique one is the top point on the agenda early this week.”

      Paul Donovan, the chief economist at UBS Wealth Management, said in an email that “investors are looking with some concern at the prospect of further large sales hitting financial markets.”

      1. The plunge protection team wants to know if these banks are gambling with public pension fund money or their own slush funds?

    2. Trader Talk
      Here’s what happened in that wild trading in China internet stocks
      Published Sun, Mar 28 2021 10:29 PM EDT
      Updated Mon, Mar 29 2021 2:43 PM EDT
      Bob Pisani
      Key Points
      – A trader who participated in some of the wild trading in Chinese internet stocks on Friday confirmed that the primary cause of the selling in Chinese stocks was that a fund, Archegos Capital Management, was forced out of its positions.
      – The catalyst was ViacomCBS, which did a $3 billion stock offering through Morgan Stanley and J.P. Morgan earlier in the week that fell apart. It resulted in massive selling.
      – The dramatic drop in ViacomCBS’s price resulted in margin calls. Archegos was also long many China internet names that traded in the U.S.

    3. Breaking|Mar 29, 2021,
      12:32pm EST|4,337 views
      Here’s Why Wall Street Is Worried About More Forced Selloffs After Friday’s $30 Billion Fire Sale
      Jonathan Ponciano
      Forbes Staff
      Investing
      Updated Mar 29, 2021, 02:17pm EST

      After a frantic stock sale helped wipe nearly $50 billion off the market capitalizations of ViacomCBS and Discovery, investors are worried that big banks and Washington could rein in margin debt, the risky leverage that sparked the Friday selloff after soaring to a meteoric high during the pandemic.

      Key Facts

      Stocks are falling Monday, as investors worry about the fallout from the block trading that pushed mega-cap firms Viacom and Discovery down by about 27% each on Friday.

      “The big worry on Wall Street” is that the volatility could lead banks to rein in margin debt, Vital Knowledge Media founder Adam Crisafulli said Monday, warning that such a development could spur further forced selling as investors offload their risky leverage to meet tighter margin requirements.

      Crisafulli also notes that Congress could get involved by holding “a slew of hearings” about margin debt and anonymous positions in an effort to usher in “permanent industry changes” targeting the highly leveraged trades.

      Boosted by booming online brokerages like Robinhood, margin debt has surged to a record $814 billion in the United States—nearly 50% more than a year ago, according to the latest data from the Financial Industry Regulation Authority.

      Investors on average hold roughly 76% more debt in their accounts than cash—a staggering level that’s eerily close to the 79% figure at the peak of the dot-com bubble, after which stocks plunged 40% over two years (a sign that speculation is at a similar high, but not that stocks will crash).

      Though none have yet said they’re making changes to margin requirements, big banks have warned of massive losses as a result of risky overleveraging, and the Securities and Exchange Commission said in a Monday statement that it’s been “monitoring the situation and communicating with market participants since last week.”

    4. I don’t quite get the ins and outs of all these shorts and derivatives, but I agree with you on the cockroach theory.

  14. “Unprecedented” my arse…

    I’ve seen this movie before.
    And I have to admit it’s no bore.
    The lying, the dying, the late night crying,
    All make me want to watch it no more.

      1. The Financial Times
        Archegos Capital Management
        Archegos banks discussed co-operation to head off selling frenzy
        Counterparties met to consider orderly unwinding of Bill Hwang’s leveraged equity bets
        Montage of Bill Hwang and dollar bills
        The trading by Archegos Capital, led by Bill Hwang, above, and its prime brokers has reverberated across Wall Street
        Ortenca Aliaj and Eric Platt in New York, Tabby Kinder in Hong Kong and Leo Lewis in Tokyo
        8 hours ago

        The biggest counterparties of Bill Hwang’s Archegos Capital last week discussed ways to limit the market fallout from his collapsing bets on stocks including ViacomCBS, according to four people briefed on the talks, but the effort foundered and paved the way for days of chaotic trading.

        Before the troubles at the family office burst into public view at the end of the week, representatives from its trading partners Goldman Sachs, Morgan Stanley, Credit Suisse, UBS and Nomura held a meeting with Archegos to discuss an orderly wind-down of troubled trades.

        The banks had each allowed Archegos to take on billions of dollars of exposure to volatile equities through swaps contracts, and Hwang was struggling to deal with margin calls triggered by a plunge in ViacomCBS shares. An orderly wind-down would minimise the market impact and the hit to their own balance sheets as they worked to sell down stakes in companies that Archegos had amassed through the derivatives instruments.

        It is unclear whether an understanding was reached but several sources said it was quickly clear that some banks had begun selling to stem their own losses. People familiar with the trading said Credit Suisse and Morgan Stanley both appeared to have unloaded small batches of shares in the market after the meeting.

        “It was like a game of chicken,” one person said.

  15. “…the belief you can’t lose.”

    It happens when the central bankers keep the punchbowl permanently spiked.

  16. Business News
    March 29, 2021 10:09 PM
    Updated 2 hours ago
    Analysis: Debacle at Archegos throws excessive risk-taking into spotlight
    By Saqib Iqbal Ahmed

    NEW YORK (Reuters) – Highly leveraged Archegos Capital’s downfall is the latest signal of investors’ hunger for risk-taking being far from satiated even after a run that has lifted the S&P 500 index around 80% in a year.

    The impact of the hedge fund’s troubles seems to have been limited so far to a handful of stocks – from ViacomCBS and Discovery to the shares of investment banks who dealt with the fund, such as Credit Suisse – without rippling out into broader markets.

    Yet, there are other signs that the mood has turned exuberant in recent months, leading to potentially excessive risk-taking across asset classes.

    Among those are the market’s robust appetite for special-purpose acquisition companies (SPACs) and the popularity of cryptocurrencies such as Bitcoin. And an 850% rally in the shares of GameStop, fueled by retail investors with the help of options on sites such as Reddit’s WallStreetBets.

    “My guess is we are going to see a whole series of these examples and we will be looking back on this in several years and saying this was a period of phenomenal widespread risk-taking where standards were lowered,” said Andrew Beer of Dynamic Beta Investments.

    Equities now account for 50% of all assets held by households, mutual funds, pension funds, and foreign investors, the highest level since the tech bubble of two decades ago, research from Goldman Sachs showed. Many investors are leveraging that stock exposure through options, with equity options trading volume up 85% last year from 2017, according to data from Trade Alert.

    And after a stretch of bearishness following the COVID-19 pandemic’s initial outbreak last year, both institutional and individual investors see better times ahead. Fund managers in a BofA Global Research survey have ratcheted up their exposure to commodities to record highs – a bet on a global recovery – while cash levels stand near eight-year lows.

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