So if the etf products for these have immediate liquidity in a crisis, making the money for the loans disappear faster than the actual liquidity of the loan, who takes the loss? I am just still confused if this could end up in another 2008. I never invest in those types of things, but just worry even if my BIL barclays short term treasuries would end up in some strange counterparty risk if banking system crisis occurs.
In many ways, yes. What makes this sort of leverage dangerous is that many people assume it can't cause too much damage because it is supplied by private sources. What they don't realise is that much of it is ultimately guaranteed by clearing houses, which are underpinned themselves by publicly owned banks. In short, there is no such thing as "safe" leverage and everything in financial markets is ultimately interconnected one way or another....Tim
They got away with it after Lehman Bros... 2 Presidents blinked, looked away, even closed their eyes. So it MUST be okay. Of course they'll do it again and if anyone but Sanders is elected the tax payers will bail them out again ad infinitum. I hope my retirement fund doesn't include leveraged loans, Cov-lite or not.
This video having only 1800 views is the first sign of depression coming.
Thanks! Separately, I flagged my concerns about Bitcoin in December 2017 - just sayin ;)
Pro tip : you can watch series on kaldrostream. Been using them for watching all kinds of movies during the lockdown.
This aged well
How do we short those loans?
Here we go again!
We'll see now!
Great stuff. Thanks Tim!!
Reminds me of The Big Short. Loans to people who won’t be able to pay back when the introductory interest rates go up
Sounds very complex. This is bound to lead to a crisis at some point as nobody knows what they're doing
So if the etf products for these have immediate liquidity in a crisis, making the money for the loans disappear faster than the actual liquidity of the loan, who takes the loss? I am just still confused if this could end up in another 2008. I never invest in those types of things, but just worry even if my BIL barclays short term treasuries would end up in some strange counterparty risk if banking system crisis occurs.
Thanks for the great explanation!
Great video.
are leveraged loan same as India's NBFC loan crisis?
same as it ever was ! until it isn't?
In many ways, yes. What makes this sort of leverage dangerous is that many people assume it can't cause too much damage because it is supplied by private sources. What they don't realise is that much of it is ultimately guaranteed by clearing houses, which are underpinned themselves by publicly owned banks. In short, there is no such thing as "safe" leverage and everything in financial markets is ultimately interconnected one way or another....Tim
Get a yourself belt tim 😂😂
Btw top explaination as always
I did just recently - keep a look out :)
Correct me if i`m wrong, but I don`t aren`t those exactly like CDOs... but on steroids?
Bundled loans.... again,.... sounds suspiciously like sub-Prime mortgages again.... 🤔😏🤭🤫
Chris McLean 🤫🤫🤫🤫
How are they evading reporting this time? Oh wait... Trump nixed that requirement.
They got away with it after Lehman Bros... 2 Presidents blinked, looked away, even closed their eyes.
So it MUST be okay.
Of course they'll do it again and if anyone but Sanders is elected the tax payers will bail them out again ad infinitum.
I hope my retirement fund doesn't include leveraged loans, Cov-lite or not.