Is There a New Dotcom Bubble?

I would not dare visit Venice, nevermind pay rip off prices for a shithole apartment! Now they have an issue of homeless people trying to take over the area and it's lead to some people's houses getting burnt down because some drug addict left his lighter on in his tent after getting too high on good quality drugs. Some businesses got shut down because the drug addicts were scaring off a lot of people. The same thing happened to small businesses in Kensington Avenue (search up that area on YouTube, it's scary).

Venice Beach is a place 99% of LA foreign tourists will visit when they come visit the city, but now even the tourist areas are complete dumps. The YouTuber 'German in Venice' has videos on homeless people sleeping on the Hollywood Walk of Fame and the homeless tents popping up.

California's tourist industry is collapsing because why would you visit if the most famous tourist attractions are filled with homeless tents? Tourism makes a huge income for California. If one day Disney Land starts getting taken over by homeless drug addicts, then yep, it's pretty much over.

There's this channel who has many videos about the homeless tents in Venice. They remove the homeless tents and they still try to come back and burn down $8 million houses:

$ 8 Million House in the Venice Beach canals...

Search on YouTube "German in Venice homeless tents" and "German in Venice. Fire" if you want to see what's it's been like since a few years ago.

 

Just wait until the higher interest rates flow through and cause debt service payments on the US government debt to soar. We ain’t seen nothing yet in terms of where this is all headed.

 

So.. who has been buying real estate in California in the last 4 years? Prices are just ridiculous...

Who makes enough money to purchase a tiny 70 sqm2 apartment for like 900k?

Actually I did not like LA at all. California in general is like the Mediterranean but with rampant crime, no healthcare, and crazy prices. I remember driving through downtown LA at night and a beggar came out of nowhere and smashed a bottle on my car. And this was a long long time ago... today it must be much worse!

The ECB and the FED surely plan to print more money to service the debt. Anyway, the future looks awful...

I am very tempted to buy property in what many consider "developing" or "third world" countries and go live there for good. Quality of life would be much better and I think I would still have healthcare in Spain, in case anything happens.

We're all going to have to think outside the box because politicians are planning to bankrupt us all, or steal our hard earned money and savings.

 

The interest rate rises are going to cripple the US. The central banks and governments around the world created the current inflation problem by printing 40% of the M2 money supply (within two years!) whilst simultaneously locking the country down. It was always going to be a recipe for disaster. The lockdowns affected the supply chains (which created more demand via a reduction of supply), and with 40% more money floating around, it was always going to end with prices rising sharply.

It takes a long time for the effects of the current monetary policies to trickle through into the economy, so we don’t really know what’s ahead. All we can see is a potential horizon based on current data, but as we get closer, the picture we see now will change (for better or worse).

They will eventually move to CBDCs. However, if you read the white papers on the current proposals, they are not good at all.

From a previous post of mine:

The central banks are creating their own CBDCs (central bank digital currencies). They will be nothing like the cryptos we have now because they will all be centralised and permissioned. Seven banks have been helping the BIS put together a CBDC template. These banks are:

US Federal Reserve
EU Central Bank
Bank of England
Bank of Japan
Swiss National Bank
Bank of Canada
Swedish Central Bank

The central banks, governments, and certain institutions will use what they call wholesale CBDCs. The rest of us normal people will use a completely different digital currency to the people in power. It’s crazy. Their latest report also states that CBDCs would likely have wide-ranging impacts on public policy issues beyond a central banks traditional remit. That in itself is pretty concerning. It means they could potentially get involved in policy mandates that have nothing to do with money. They say different uses and needs would have to be addressed in the system's design. It also says this, “central banks might consider measures to influence or control CBDC adoption or use. This could include access criteria for permitted users.”



You can read more about this stuff here:

Central bank digital currencies: user needs and adoption

Central bank digital currencies: executive summary

 

The new lies I just read on Spanish press say that the "supply side" of inflation is pretty much solved and that it's time to tackle the demand... this is just so ridiculous!

Because, in the first place, central bankers were insisting on the current inflationary wave being "only supply sided". So central bankers seem to have forgotten their previous lies and now they say "it's the demand that is creating inflation"!

They're not only liars... but bad liars who cannot make their lies stand the test of time. In a few months they have been forced to change their former lies so many times that central bankers themselves have lost track...

The interview I read was with Agustín Carstens and Pablo Hernández de Cos (in charge of the useless Spanish Central Bank).

By the way, Amazon results for year 2022 are just awful... and they point to more trouble ahead.

 

When the shit hits the fan:

Crypto group Circle admits $3.3bn exposure to failed Silicon Valley Bank

Stablecoin’s value drops as crypto market reels from US bank failures

 

You’ve gotta love the Financial Times. A traditional bank fails and they make the headline about crypto, it’s hilarious. There was a bank run on SVB which is the 16th largest bank in the US, and it’s the biggest financial collapse of an institution since 2008.

Credit Suisse is one of the biggest banks in the world, and that came perilously close to failing about 6 months ago. The banking system is not in a good place at all. Any bank can have a bank run at any time because none of them hold all of your money under the fractional reserve system.

If the bank you use has a run on it tomorrow, then you could lose most of your money as they do not have to give you your money back. The insurance in the UK is for a petty £75k or so.

Anyway, it just made me laugh at how biased the Financial Times is.

 

It's not a coincidence that all those crypto scams are falling. That's what they are: scams. And another way for money laundering.

About Credit Suisse, I think it will collapse unless it is bailed out with oil and gas money.

Because all banks have a lot of interaction and their businesses are intertwined, banking collapses are going to send waveshocks through the financial sector.

Blackstone has also defaulted on a loan secured by mortgage-backed securities. Does this ring any bells? 2008, someone?

 

You are blinded by the Financial Times’ reporting. Scams have been around since the dawn of time, and this will never change. People will use whatever method they can to manipulate and scam others whether that be via traditional finance, snail mail, e-mail, crypto, diamonds, precious metals, etc, etc. Bad actors are everywhere and will utilise whatever they can.

To say that all crypto is a scam is astoundingly misguided. We have already been over the subject of money laundering and know that it is much easier to launder cash than anything else, so your argument is invalid and makes little sense. Mainstream blockchains make transactions easily traceable; we’re not talking about some dogshit ten a penny scam coin here, I’m talking about projects with serious teams and technology behind them.

You also talk like the entire crypto industry is just about replacing money, and that’s where you’re miles off. Many of the projects I follow and invest in have nothing to do with wanting to replace existing currencies.

What I find fascinating is that you think crypto is all a scam, but what about when the central banks roll out their CBDC’s which will be based on the same distributed ledger technology (DLT)?

There is no difference between fiat money and crypto as both derive their value from the network effect of others using them as a form of exchange (neither are backed by anything precious). To still believe that one is an inherent scam (but not the other) is so incredibly naive that I don’t even know where to begin. The main difference is that fiat money is controlled by a central entity who has the power to print vast amounts of new money on a whim (which devalues everyone’s savings in a single act).

 

Wowww... European indexes falling more than 4%.

Some Spanish banks and Credit Suisse collapsing -10%.

And this is just for starters.

The bank that fell in the US is equivalent to half the GDP of Spain... OMG!!!

Things look pretty red now in stock markets...

Live news: US bank stocks sink in premarket trading after SVB collapse

Will Credit Suisse be next?

And I am amazed at no one in the FED resigning for all the mess caused, and no one at the ECB taking responsibility for putting the Eurozone on the brink of collapse.

 

I said all this would happen over two years ago. The writing was on the wall, and until the banks are actually allowed to fail, then this scenario will continue to play out (a collapse followed by a bailout, etc). I don’t know how people can continue to defend the indefensible at this point. At least in crypto, a collapse is a real collapse; it’s game over. This filters out the weak so that only the most robust services survive.

The contagion risk in traditional finance is frightening, which is why they cannot let failing institutions fail. They even go to the depths of using taxpayers' money to prop these dinosaur institutions up. People need to open their eyes because the corruption within this sector has known no bounds for generations, but they have always gotten away with it.

There will be more bank runs when people finally realise that they do not hold their deposits in a reserve account. The fractional system is stacked like a house of cards (usually on a ten-to-one basis). It doesn’t take many people wanting their money out for a total collapse to occur, and for chaos to ensue.

Even CZ said there needs to be better regulation regarding the banks’ reserve audits:

CZ pondered whether banks should be using “Merkle trees” to achieve a Proof-of-Reserve, emphasizing that this would create greater transparency. He postulated that even if it wasn't 100% accurate, it would still be beneficial to know the approximate amount of reserves held.

 

I think Biden has screwed up when rescuing the deposits of some rich people over the legal limit of USD 250.000.

This article by Stiglitz also points to the FED doing a poor job on bank regulation:

Silicon Valley Bank’s failure is predictable – what can it teach us? | Joseph Stiglitz | The Guardian

The FED is a useless institution, like the ECB. Only Volcker did the right thing to tackle inflation: pushing interest rates up to the same level of inflation, or above.

Powell is doing a poor job and he should be fired, and Lagarde should be fired as well. These idiots are bailing out the rich and forcing the average guy to put up with unbearable inflation.

By the way, while everyone talked about Silicon Valley Bank collapse, Biden approved yesterday the oil drilling in Alaska, whose only operation will pollute the planet as 2 million fuel cars would do. Now tell me about Tesla, environmental "transition", clean energy, and blah blah.

The US is profiteering from the war in Ukraine, instigated by the US, and is exporting inflation to the rest of the world and selling that environmental bullshit while they make tons of money selling expensive oil and gas to Europe.

 

The treasury yield curve is now putting significant pressure on all the smaller non G-SIB banks (Global systemically important banks). The Fed now has to decide whether to risk further systemic collapse or to drop the interest rate to try and reverse the curve. I can’t see how it will be sustainable with a Fed funds rate above 3% under the current global economic conditions. The yield curve is critical to the stability of the global financial system.

Here’s a quick explainer for anyone who follows this thread who may not understand what’s going on:

The yield curve is a graph that shows the yields on US Treasury securities of various maturities. Typically, longer-term Treasuries have higher yields than shorter-term Treasuries. When the yield curve is upward-sloping (long-term rates are higher than short-term rates), it is considered a normal yield curve. Conversely, when the yield curve is flat or inverted (short-term rates are higher than long-term rates), it is considered an abnormal yield curve.

For G-SIBs, changes in the yield curve can impact their profitability and financial stability in several ways:

1. Net Interest Margin (NIM): G-SIBs make money by borrowing short-term funds and lending long-term. A steeper yield curve means that the difference between short-term and long-term rates (the NIM) is higher, which is generally positive for bank profitability.
2. Funding Costs: G-SIBs rely heavily on wholesale funding (borrowing from other financial institutions). In a flat or inverted yield curve environment, funding costs may be higher, as investors demand a premium to lend money over longer periods. This can negatively impact G-SIBs' net interest margins.
3. Credit Risk: An inverted yield curve can signal an impending economic slowdown or recession. This can increase the credit risk for G-SIBs, as borrowers may struggle to repay their loans. This can impact the value of G-SIBs' loan portfolios and increase the likelihood of loan defaults.
4. Liquidity Risk: G-SIBs are heavily reliant on short-term funding, which can create liquidity risk if investors suddenly demand their money back. In a flat or inverted yield curve environment, investors may be more likely to withdraw their funding, as the yield on longer-term investments may be more attractive.

So basically, the Treasury yield curve can have a significant impact on G-SIBs' profitability, financial stability, credit risk, and liquidity risk. Because of this, all banks have to monitor the yield curve and adjust their business strategies to manage these risks.

In simple terms, many banks are now in a very bad position because they are basically insolvent. They cannot cover their customers' deposits, and if interest rates go higher, then more people will start to withdraw their money to cover rising expenses elsewhere. This is how Bernie Madoff got found out. If it wasn’t for the 2008 financial crisis, he would probably still be operating now.

I’ll tack on some relevant tweets from people who understand what’s going on:

 

SVB, and all the other banks that recently failed, were holding long-term bonds that have ruined them (since the yield curve has inverted so dramatically in a matter of days).

If Powell had done a Volcker, we’d all be screwed. How on Earth would the financial system remain intact with an interest rate of 20%? It can’t cope with 5%.

They should have let the banks fail in 2008 rather than bailing them out. We’d now be 16 years into a recovery, instead, we’re dealing with the same problems because they never went away. Printing obscene amounts of money and pretending everything is ok is not a solution.

Bitcoin was created because of the shit show that happened in 2008, and nothing has changed. The idea that fiat is inherently safe because it’s insured is ridiculous. The banks bail each other out with made-up money; you can’t write this stuff. It’s nothing but a big game of monopoly where one player gets to cheat. Do not be fooled by how the system works.

Crypto represents a much fairer way of doing things that is far more inclusive, cheaper to run, and easier to administer. It gives many more people around the globe access to banking services who are currently excluded, and it removes the need for a hierarchy.

As an interesting side-note that I forgot to mention: there is a service called LunarCrush which is a data analytics company that utilises AI to provide very detailed and useful financial information across various sectors. It successfully predicted the collapse of SVB before it happened and it has successfully predicted many other things. It’s part of the crypto sector, and I’ve been invested in it for nearly two years.

LunarCrush uses Social Media to Predict Bank Run at Silicon Valley Bank

LunarCrush's prediction was proven to be spot-on when Silicon Valley Bank experienced a sudden surge in customer activity, with a large number of customers withdrawing their deposits from the bank. This situation proved disastrous for the bank, leading to a widespread panic and a potential financial collapse.

Thanks to the accuracy of LunarCrush predictions, users leveraging the power of social media analytics have once again demonstrated its value in predicting significant changes in the financial industry.

 

Well... you're wrong. Extremely indebted people and companies would be in trouble. But there are also responsible companies that manage their risks adequately and those would be fine.

By the way, US regulators should look at the money Peter Thiel retrieved from Silicon Valley Bank and ask all those California billionaires how they knew in advance the bank was going to collapse.

If Biden wasn't a charlatan, he would have fired Powell already, and the people running the SEC too.

 

No, everyone would be in trouble for numerous reasons. There would be an unbelievable amount of contagion if the dominoes started to fall because everything is connected. A systemic collapse would affect everyone regardless of how indebted they are or how one runs their business. It would also have more of a devastating impact than the current inflation problem. Inflation is currently the lesser of two evils (that’s crazy to say knowing how bad inflation is), although, we shouldn’t be in this situation anyway. It was created by the banks and passed onto us, and when real ideas and solutions were proposed and implemented, those in power desperately tried to discredit and ridicule them.

 

The FED and the ECB should do their job, which consists of driving down inflation to 2%, without any other considerations. This means increasing interest rates at a faster pace.

Inflation was already there years ago. When central banks said there was zero inflation in 2017 - 2020, real estate prices had doubled, stock prices had rocketed, rents were through the roof... so it was very evident there was A LOT of inflation.

And then it went totally out of control. The FED and the ECB are run by incompetents who should be fired.

 

You are supporting my argument. Why are we still dictated to by these central banks who can’t even do their job properly?

Then they steal the technology of a superior method so they can ruin it. It’s a bonkers world we live in.

 

I'm not supporting your argument.

I'm just saying the EU and the US should find a new Paul Volcker to do the job. And fire Lagarde and Powell, those useless clowns.

 

More lay offs:

Meta axes further 10,000 jobs in fresh round of cuts

Those American billionaires really know how to keep their wealth no matter what. Plus they do not pay any tax and the IRS does not chase them. One would think these people are above the law. How democratic!

 

You are because you acknowledge that the central banks are not working.

Paul Volcker couldn’t do the same job in this economy, and that’s something you don’t seem to understand, and I’m not sure why. There’s nothing he could do. Global economies are far too indebted, and now that they’ve opened Pandora’s box of printing money (QE), well, they’re not gonna stop now.

It’s every other empire throughout history being played out again for the umpteenth time. Nobody ever learns that debasing a currency doesn’t work! It never has, and it never will. Once an empire starts debasing its currency, it is always the beginning of the end.

 

It's just time to push the reset button...

That's what the Saudis are saying, you see..

Credit Suisse share slide sparks rout in European bank stocks

"If I were an oil man"

Then I imagine you don't have money deposited at a bank...

 

Something has gotta give because the global economy is f**ked right now. There isn’t a country out there who’s doing ok.

All the banks are going to suffer until this yield curve steepens; especially the smaller non G-SIB banks.



This is not a great sign.

I took my savings out of the bank in 2020 and invested it in crypto. It was one of the best decisions I have ever made as I pretty much did a 30 x on it. I’m now in a position where I’ve reinvested some of it, holding some cash, some stable coin, and I’m looking to move the rest of it into whatever opportunities I come across.

If I’d left it all in the bank then I’d have lost a ton of value from all the central bank printing that was going on. This was one of the main catalysts for my decision.

I warned people on here about what was going to happen and was pretty much laughed at. Loads of people missed an opportunity of a lifetime whilst their money lost a lot of value in the bank to inflation.

I use a business current account to get paid, but I don’t like to hold large sums of money in a bank account.

 

This chap must be the biggest hypocrite on Earth, together with Jay Powell and useless Lagarde of course.



Barney Frank defends role at Signature Bank: ‘I need to make money’

"Former US congressman Barney Frank, an architect of landmark legislation designed to make the banking system safer, has defended his decision to take a job on the board of failed Signature Bank, saying “I need to make some money”.

Frank, 82, joined Signature’s board of directors in 2015, two years after leaving Congress, where he shepherded the sweeping Dodd-Frank financial regulatory law in the wake of the 2008 financial crisis.

On Sunday, regulators seized control of New York-based Signature in the third-largest US bank failure in history amid worries about the financial strength of regional lenders and deposit flight after the collapse of Silicon Valley Bank.

The guy has some cheek:

"Based on stock sales and cash compensation, Frank appears to have made roughly $2mn from his work at Signature before the bank failed, according to FT calculations.

While Frank never officially registered as a lobbyist, he had publicly argued that Dodd-Frank’s $50bn threshold for triggering greater regulatory oversight was too low. Signature’s assets surpassed $50bn in 2019. By the end of 2022 it had more than $100bn in assets.

Frank had announced previously that he would step down from Signature’s board ahead of its annual shareholder meeting.

The former congressman defended the financial strength of Signature, arguing that it was not insolvent and would have survived had it been allowed to open on Monday.

---->>>> This is a total joke, as Peter Thiel for instance, and all the rich people with money parked at SVB were taking out their money: "He said customers would have been calmed by actions taken by the US government to shore up confidence, including a new lending facility to other banks to help cover any deposit withdrawals."

 

It is rigged and always has been. I believe that most people know this deep down.

The banking system relies on bailouts to secure the deposits, so it’s ultimately a Ponzi scheme at heart. There’s never enough money to cover all of the deposits (which is the very definition of a Ponzi), but that’s how they make money, and it’s at everyone else’s expense when it goes wrong. Don’t forget that the governments used your hard-earned cash to bail out the banks in 2008. It’s a disgrace. Nobody was jailed, and most people forgot all about it after a couple of years or so.

The average Joe on the street has no idea how banks work or what their risk profile is. There is also no way of accurately knowing what their reserve assets are worth. They are also known for manipulating the Forex markets at the retail traders’ expense. They are a bunch of sharks that control the entire money supply and none of us has any say in it. It’s bullshit, in my humble opinion.

Times have well and truly moved on, but we are stuck using archaic technology, and an old mindset. There will be a flash point in the coming decade or so where there will be a financial revolution. It’s inevitable, in my opinion. It’s just a case of whether free markets will reign, or if governments around the world will dictate what is allowed to happen in order to assert their control.

 

Yes, we had this California sort of phenomena in Albuquerque when I lived there. The "3 strikes and you're out" law in California turned into "2 strikes and you move to New Mexico".

I think we can put that dot.com bubble to rest now, what w/ the big Silicon Valley Bank going under and another big bank failing yesterday. You can't base an economy on fast food joints and marijuana dispensaries, nor on computer chips and software.

At some point, we have to go back to making products and needed goods (like food or clothes) and someone has to buy them. That supplies people w/ jobs, which enables them to buy things. It ain't rocket science. This whole dot.com thing is venture speculation. I don't need a newer, faster computer chip or social media (which is actually anti social). I need groceries, bandaids, stuff like that. My 13-year-old laptop is still working fine. In fact, I don't even need the laptop or the internet. I can still, gasp, bike up to the store.

 

The best question journalists can put today to Lagarde at the ECB press conference is "do you know how much a kg of tomatoes costs today, and how much did it cost a year ago?"

 

So the Swiss central bank has just bailed out Credit Suisse for $54b. They aren’t the only bank who are facing a liquidity crisis, so where is all this bailout money coming from? More bond purchases?

 

The big question now is how can the central banks continue to hike the rates if the banking system is about to topple?

There’s a multitude of liquidity problems, and then on April 8th, they will be discussing the debt ceiling in the US again. They may be forced to cut the rates rather quickly or risk systemic collapse. It will be interesting to see how they get out of this mess.

Crypto needs to decouple itself from fiat currencies.

 

They have to continue raising rates because actual, real, inflation is at 20% per year, and rates in the Eurozone are at only 3.5%, which is plain ridiculous, it's too low.