On the lighter side I'll wager it will be quite the fecund source of many a blog article in the not to distant future when, in all likelihood, the whole show goes to fertilizer. Is it just me? Is this not an obvious financial seed of mass destruction caught in the act of it's planting, or is it a re-potting so it's still tender roots can get a better purchase before our hopelessly reactive Regulators can kill it before it grows into something to big to kill? The gall of these 'financial institutions' is something to behold. Anyway. They wouldn't be doing this if there wasn't swelling dissension amongst the suck... errr opps! I mean, ahhhh would you accept, PE Investors (?), lured into their shadowy product lines. I don't mean to sound like I'm calling a whole bunch of good people, who I'm told are financially sophisticated, and doubtless much smarter than myself, idjits or anything of that sort. Definitely not my intention! Doubtless, when it is all M2M'd back to reality, as it always is when the Market remains irrational longer than the participant's ability to wait it out, the costs will have been worth the chipper banter and the bragging rights of implied financial prowess amongst the warm glow of egos over martinis. God knows I've fallen for a line or two, but, never the "grosse Luge", at least not yet.
Speaking of runs. I've heard it said, "no Man can out Run their Shadow." Guess we'll be testing the truth of that, in a bigly way, soon enough.
Banks need better cash flow testing for interest rate risk. They also need to consider a greater degree of interest rate moves, and non-parallel yield curve shifts. Life insurers have a much better process for this. Real cash flow testing would reduce interest rate risks at banks, and reduce maturity transformation. Initially, it would reduce banking profits, until the banks shrank enough to get better margins.
A growing shadow of private dread has cast a pall over my wrinkled lobes since I read this,
https://www.bloomberg.com/news/articles/2023-03-29/jpmorgan-goldman-plan-to-start-trading-private-credit-loans
On the lighter side I'll wager it will be quite the fecund source of many a blog article in the not to distant future when, in all likelihood, the whole show goes to fertilizer. Is it just me? Is this not an obvious financial seed of mass destruction caught in the act of it's planting, or is it a re-potting so it's still tender roots can get a better purchase before our hopelessly reactive Regulators can kill it before it grows into something to big to kill? The gall of these 'financial institutions' is something to behold. Anyway. They wouldn't be doing this if there wasn't swelling dissension amongst the suck... errr opps! I mean, ahhhh would you accept, PE Investors (?), lured into their shadowy product lines. I don't mean to sound like I'm calling a whole bunch of good people, who I'm told are financially sophisticated, and doubtless much smarter than myself, idjits or anything of that sort. Definitely not my intention! Doubtless, when it is all M2M'd back to reality, as it always is when the Market remains irrational longer than the participant's ability to wait it out, the costs will have been worth the chipper banter and the bragging rights of implied financial prowess amongst the warm glow of egos over martinis. God knows I've fallen for a line or two, but, never the "grosse Luge", at least not yet.
Speaking of runs. I've heard it said, "no Man can out Run their Shadow." Guess we'll be testing the truth of that, in a bigly way, soon enough.
https://www.etymonline.com/word/bigly
Banks need better cash flow testing for interest rate risk. They also need to consider a greater degree of interest rate moves, and non-parallel yield curve shifts. Life insurers have a much better process for this. Real cash flow testing would reduce interest rate risks at banks, and reduce maturity transformation. Initially, it would reduce banking profits, until the banks shrank enough to get better margins.