If the debt-laden consumers are the ones hit by Roach's scenario, how do the bankers and rentier's remain unaffected? Surely a large part of the financial boom has been borne out of the borrowings of these "ordinary people?"
I know each individual borrowing provides nothing like the volume of profit of one "M&A deal" in a merchant bank, but most of the system is bound together. When the retail arm of banking suffers, then doesn't the industry as a whole tends to come under pressure?
Not to mention that as consumers buy less, companies come under pressure too, hence their banking trade can be volatile also?
Along similar lines, the safest investment in the world these days is in the largest hedge funds as they are guaranteed a bail out, because without one the shockwaves will really throw the world economy into chaos.
How big are the big "global-macro" hedge funds and how many of them are there? guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
I think the best investing I'll manage is probably a stout pair of walking shoes for the incoming oil crisis.
Hmmm, This link indicates that hedge funds only total around 1 trillion dollars. (Roughly $750 bn concentrated in the top 200 and $75 bn in the top 5.)
That's a bit smaller than I had heard.
I'm not sure how leverage plays into these figures either.
However, prseumably inflation indexed bonds of a government you believe will still be here at the end of the crisis are one of the safest ways to store money?
So, I guess it depends on how much energy and housing matter to you... ;-)
But help me out here. Property values have been going up by about 10% per year for a few years now [I just happened to deduce from the council tax booklet I got from the borough the alleged 1991 value of the property I rent, and compared with the current local prices...], so the mortgage payments for a newly blught property have been going up by the same amount (roughly) so rent payments for equivalent properties have also been going up by 10% a year. And about 1/3 of people's after-tax income is taken by housing expenses, so there goes over 3% inflation. Am I wrong? guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
But, I would guess that the cooking involves some sleight of hand about the amount of after-tax income spent on housing. That presumably is the key assumption.
I can just see the City of London choked with bikes like Far Eastern countries are now. Just think of the air quality - ah bliss. Suddenly the thought of $100 oil just makes me think "Bring it on" - didn't somebody else say that once ? keep to the Fen Causeway
Why? Why? guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
I'm with Migeru, public transport is the only way to get around the South East. keep to the Fen Causeway
