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Roach Panic
Goddammit, here we go.
There's nothing I despise more as a chronicler of daily macro-market events
I agree with your point. Interestingly, a lawyer – who consulted in China in regard to their efforts to regulate the stock market there – once told me, based on solid evidence, that individuals and companies there often triple pledged on their loans; and may times more. He said he would not buy anything there
I once testified in a court case where a borrower pledged his one sweet herd of pigs three times for loans in three adjacent states. Problem was that the pigs caught Swine Fever and most of the herd died in a short time. That was a big whoops. Actually, the borrower counter-sued its three lenders saying they never should have lent it any money because the should have known the farmer was too big a risk. Of course, the government was the defendant in all three cases. One of my all time favorites.
“ So I’d like to know where, you got the notion
Said I’d like to know where, you got the notion
To rock the boat, don’t rock the boat baby
Rock the boat, don’t tip the boat over!”
I can’t help it- this song gets stuck in my head whenever WallStreet tries to make something big out of something small. 🙂
The Fed should have let SVB, etc., collapse. Whether the cockroach population is currently much larger than anticipated, or not, letting SVB rollover would have narrowed the cockroach gene pool. Instead, the Fed encouraged cockroaches to find safe haven, and to go forth and multiply, in Silicon Valley.
Looking for something cute, like TACO, to express inclination to trade on this bit of (likely) false alarm. BIRP perhaps (Buy Into the Roach Panic)? Or…I’m sure someone is more creative…?
Well written, thanks H.
I am with our Dear Leader on this one. Thankfully it does looks rather confined.
But there were/are rational reasons that many people were carried away writing about it. Just why has private credit exploded as an asset class in the last few years? I’d suggest it was largely because of the regulatory scrutiny that banks face in regard to their balance sheets. Private Credit lenders have no such constraints.
Plus their lending standards are not public and their underwriting processes totally opaque. That tends to make may old veterans wary & skeptical so something verifying their opinions are warmly welcomed.