JasonC

Economic Indicators Signal a Major Collapse Ahead

We are not "all broke", US household sector net worth is more than $50 trillion. The *banking system* is broken, because deadbeats stuck it with $1.4 trillion in loan losses by walking away from their commitments, and the entire political system has responded by demanding that all financiers and capitalist be destroyed. Wish for that and you will get it, but they won't take the loss, you will.

The entire political class including the voters have to decide whether they want the services of capital or not. If the answer is yes, then they need to be paid for - that means it must become profitable to be a banker again. If everyone on earth hates that idea too much to contemplate it, then everyone goes straight to hell.

But it is all readily repairable, if the authorities just stop listening to the insanity of the populists, and start helping the finance sector instead of dropping bombs on it. No, adding more liquidity rope and then forcing everyone into bankruptcy if the lend any of it out doesn't count!

Here is how you start. Arbitrage the giant spread between financial bonds and treasuries, by buying the former and issuing the latter. Make it *safe* to be a lender to banks on their notes, again. Safe and profitable. Show the way by making that trade yourself, with the treasury or the Fed doing the buying.

And stop starving panics. The ECB gets $122 billion in bids for overnight loans, and fills only half of them while demanding a 9.5% interest rate. Keep that up for a week and the governments will be the only bankers in the western world. Fill the *whole* bid, at the 3.75% stated rate.

Can't anyone here play this game?