Agreed. Cordial, but not afraid to disagree. Which she does with quality research and engaging intellect. Everyone in the space should aspire to be more like her.
The amount of dedication and time Lyn has put into her expertise, consistently improving her macros, while remaining humble and a refusal to participate in the silly drama of much of the investment/monetary crowd is rarely seen and immensely refreshing.
Always worth listening when Lyn speaks. She has the unique ability to convey her views using concise, accurate, and easily understood language. A true and welcome anomaly especially in the fields within which she operates. From my perspective these include but not limited to, finance, monetary policy, and every other aspect within the multifaceted and many faced world of economics. She possesses the amazing ability to deliver her message in an absolutely connotatively positive manner while somehow remaining denotatively neutral. Unique.
Lyn is the best. Over time a full reserve bank is clearly a fantastic idea. Many people don't have loans so they simply want a safe place to leave their money.
We need a Lyn series. Your basic questions and lyn technical expertise makes understanding the market very easy. If you can explain it with simple words do you really understand it?
We knew it will happen again since 2008 - banks will be bailed out again - cycle repeats, worse crisis ahead... it's broken inflationary money. What amazes me so many people refuse to acnkowledge both the problem and the solution having both right before their eyes. Being in Bitcoin for about 5 years and I never experienced more stability in my life despite the unstable economies falling apart all around.
One thing I don't understand with yield curve inversion is how much of that inversion is driven by inflation expectations (2y versus 10y for example). As the creator of inversion - recession correlation Campbell Harvey of Duke University said, the current inversion might have more to do with inflation expectations than with a hard landing. What's your take on it, Lyn, Peter and Danny?
Love Lyn, watch/listen to the pundits as a YT junkie and she is the only one whom actually calls the “GFC” by the correct name! Little pet peeve but she gets it 😂
Correct me if I’m wrong but isn’t the Fed owned by the largest banks? So then aren’t these smaller banks that want to hold full reserves competition for the larger banks? So isn’t there a conflict of interest here when the fed is allowed to approve/deny applications from the smaller banks?
The regulators did not have any issue with Custodia's full-reserve proposal. They objected to the other parts of Custodia's proposal catering to crypto.
Yea probably, but where is the risk if the bank just keeps reserves ? The customer base matters when a bank makes loans (because of the underlying default risk), but if it's just keeping deposits, it really does not matter who the customer is
SVB basically expected the Fed’s funding rates to go deeply negative. So they made huge bets on long dated bonds expecting profits. Which is to say they got greedy, and stupid. Full stop.
25:48 I see.. going from 1/22 to 1/6 is like a 4x increase, but in reality the banks got more "present cash" (which is on the numerator) and lost "future cash/IOU" (their assets, which is on their denominator). So that's how they changed their ratio into a 4x improvement. The FED pulled cash from the future into the present, gave it to the banks and also demanded that they would sit on more of it. That's interesting to know, thanks! (except ofc that the FED doesn't actually have to work and save to payback that "money borrowed from the future" and if their assets go down in value, the FED's debt becomes a sort of permanent debt and so it's no longer even "borrowing money from the future" and instead simply and directly increasing the money supply, rendering them no different from any other plain dollar counterfeiting house)
I have zero pity for banks. We loan them our money to hold and invest, it is not their money it is the customers money, and for them to act surprised and not be prepared when the customer wants their money does not speak I'll of the ppl but of the bank and their business model they work in. It's like if u give ur car to the valet and then at the end of dinner u ask for ur car and they loaned it out to someone, thinking u were never gonna ask for it back.
Peter's exactly right, this is addiction. we are caught in the grips of a progressive illness that over any period of time gets worse not better. Great analogy and I've been considering this for a few years now. More and more stimulus required to get similar effect until eventually it no longer works at all, (not gettin lit for years just feeding the beast) and then eventually the amount of stimulus is so large it kills the host as with an overdose or heart failure for a drunk. we are sick. physically, mentally, and spiritually. we need recovery. a complete psychic change. it's always darkest before the dawn!!!
I like Lynn but I’m really suspicious of anyone who uses inflation without context, because… inflation and deflation is applied to every system individually. 1. Cpi is a description of prices that consumers are paying 2. Currency inflation is more currency units You can have currency deflation AND consumer price inflation at the same exact time
Dan is the perfect example of hiring someone smarter than you. I don't mean that as a dig against Peter as it's a testament to him and I think he'd agree with me. Great interview.
Is a company that puts its reserves into a stable coin, and uses their fractional bank just for transfers to other people/companies, essentially as close as you can get to full reserve banking in the US?
37:05 I think that having debt in a third-party currency is not so much of a cause for hyperinflation, but a consequence instead. You got debt in a third-party currency because your own currency is already sort of useless (it can't accurately represent goods and services from the economy in a predictable manner). But yeah, if high CPI is sustained in the US and some people start denominating debts in Bitcoin, that should be a clear sign of usd heading towards a hyperinflation. 40:15 and the point on EM, they don't really "just" keep on a recurring problem, the problem keeps getting bigger and bigger as their debt keeps ever increasing, just like in the US. And also, when the EM fails, investors "have alternatives", which is, they can get their money out and protect themselves. I don't think it would work exactly the same if the usd and us assets go downhill, specially if there's no clear alternative.
Thanks thanks thanks for everything! I’ve been trying to verify Lyn’s claim that Schwab’s liabilities excede assets, but according to google finance and yahoo finance it seems the opposite. Can you point me to the source of that claim? Thanks again
total assets, $551B, total liabilities, $515B. assume most of the assets are long term treasuries that are worth 70 cents on the dollar. So if marked to market, they really only have $386B.
For Chrissake, would you stop trying to encourage her to increase her subscription price! There’s a reason I don’t have a subscription to Doomberg. Not everyone can afford what you can, bucko.
@@xraceboyex exactly Brian. I don't know why everyone doesn't know this fact. That's why I don't own bank shares. Any bank share is inherently risky particularly in a recession
