JPMorgan to Sell $13 Billion of Bonds in Largest Bank Sale Ever
(finance.yahoo.com)
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Unless they somehow divorced commercial and investment banks again, yes banks could be margin called. That is why 2008 took out so many banks.
It’s incest on purpose. They all tie themselves together in huge layers so when one goes down it threatens all of them and they get bailout.
ah. thanks for writing this out for me. You're right.
If you know....who would be margin calling the bank?
Usually other banks. If you read about the final days of Bear Sterns, that will give you an idea of how it goes down. They call in margin calls, or they refuse to reissue “commercial paper”.
Most big businesses and banks have revolvers or commercial paper, revolving amounts of loans like 2-3 billion that they use for day to day operations. This is the lifeblood of the company.
Once things start getting shaky, other banks will begin to refuse to roll over, or revolve the commercial paper loan. These are very short term loans that get renewed automatically usually. Then one day the banks say fuck you, that revolving 2 billion you have access to? It’s gone.
Once that happens, it’s over. No commercial paper means no business.
"it's incest on purpose"
that's kinda what I thought, I appreciate the explanation.