Banks take your money and put it in investments that are supposed to multiply your money. They then put that money in their pocket and give you a smidge of it back called "interest" so that you look the other way while they actually lose all your money.
When they're overleveraged it means they've lost more money in their piss-poor performing investments than when they started. Being over-leveraged by 2 quadrillion means not only do they not have everyone's money available for use on demand, but they actually owe people because they are 2 quadrillion dollars in debt.
That debt carries on to the people, so while the bank gets bailed out by the government, you're the one who loses all their money when they fuck around with risky investment schemes.
If the DeepState wanted to make everyone broke overnight, they'd go ahead and just invest everyone's money into joke stocks and then laugh their asses off as everyone goes broke except them, because taxpayer dollars will bail them out.
If X goes up, my Y goes down. It’s all fake. It’s all just shit on a server with no value. Bets on bets on bets on bets. Insanely complex at times. Similar to synthetic CDOs during housing crisis, there are derivatives of derivatives. Meaning there are series of bets based on not even the market, but on the performance of other bets. If X goes up, my Y goes down, but Joe has a derivative of that, so he also goes up or down based on what position he took.
Leverage on top of leverage on top of leverage. It’s just another way for bankers to create work and profits for themselves. It’s just numbers, but it doesn’t represent real value. It’s not a pile of coal. Or gold. Or stock. It’s all just bets. Pixie dust.
There’s no risk for the banks. Everyone involved is wealthy. Worst case their bets go bad and they get fired. Still millionaires. They don’t even give a fuck if it collapses. No one is going to jail. They will be bailed out. Worst case some banks completely fail, and then the people will get hired at other banks.
History has taught the bankers that stealing big is the best way to get away with it. If the entire system explodes, no one person is guilty. They don’t even attempt prosecutions. They just bail out their friends with taxes that will be paid by our grandchildren’s grandchildren.
The value of a derivative is derived from some other asset. The big one in 2008 was mortgage-backed securities (MBS), securities created from groups of mortgages. These "tranches" were loosely valued by the mortgages they contained, and then sold as investments. Multiple times!
That doesn't really explain derivatives. u/corrbrick gives the definition, when the value is derived from something else.
A common derivative is the short sells, where you make an investment where you buy the contract that the value of what is invested is derived on some expected future value of that same stock.
Essentially derivatives were invented to mitigate risk. You buy a security that represents a portion of a bundle of mortgages with a known failure rate. If it fails at 2% but takes in 4% you've got a good investment. On paper anyway.
Yes, that's more specific to mortgage related derivatives. There are many different types, I'm not going to pretend expertise beyond what I've mentioned though.
Then they don't use that money to pay off the overleveraged investments.
So, they take our money, invest it poorly, get bailed out by more of our money (taxes and watering down the dollar through printing) and then take that money and double down on the shitty investments that got them in trouble to begin with.
Highway robbery is more respectable, because at least they don't print money.
Like the sad old joke of the gambler down on his luck that is given some $. Instead of paying down his debt, he gambles it again hoping to win big again and pay it all off with some left over. Yet again, he loses.
sad old joke, indeed...my lifelong best friend's husband did precisely THIS, at a casino...she was still working, he retired long before and was doing all of this behind her back, with credit card debt, HELOC etc...they almost lost house and everything else, so she had to keep working much longer than she should have had to...AND he kept up same behavior until the day he died, on a smaller scale through lotto and scratch-off tickets...(sorry about the rant...)
Similar to big pharma who have zero liability for deaths and damages to the people, some would argue is by design. The government instead, uses tax payers for the damages caused. All the whole big pharma and government, both laughing their way to the bank?
any tips on finding a local bank (socal) that doesn't have derivatives risk? afaictl anything that has less than $1billion in assets is what to look for , and I'm having no luck finding anything like that.
They aren't technically banks though... Putting money in a credit union means you agree to not being able to withdraw all your money at once -- you have to set up a withdrawal payment plan to do that.
Imagine you and all your neighbors agreed to put money in the same vault and hire someone to manage that vault.
The money goes out to investments like the big banks, but if anyone tries to take all their money out they have to call back all those investments immediately, otherwise everyone goes bust.
You also have daily spending limits, at least for non-cheque and debit card expenditures.
Typically, you don't want more than around 14,000 in a federal credit union, but they are safer than banks because they don't get all the safety nets like the big bankers, so they invest more wisely.
Banks take your money and put it in investments that are supposed to multiply your money. They then put that money in their pocket and give you a smidge of it back called "interest" so that you look the other way while they actually lose all your money.
When they're overleveraged it means they've lost more money in their piss-poor performing investments than when they started. Being over-leveraged by 2 quadrillion means not only do they not have everyone's money available for use on demand, but they actually owe people because they are 2 quadrillion dollars in debt.
That debt carries on to the people, so while the bank gets bailed out by the government, you're the one who loses all their money when they fuck around with risky investment schemes.
If the DeepState wanted to make everyone broke overnight, they'd go ahead and just invest everyone's money into joke stocks and then laugh their asses off as everyone goes broke except them, because taxpayer dollars will bail them out.
Remember -- "banks are simply too big to fail!"
Ah.. I see. I knew about interest. But not the term derivatives.
Derivative is code word for bet.
If X goes up, my Y goes down. It’s all fake. It’s all just shit on a server with no value. Bets on bets on bets on bets. Insanely complex at times. Similar to synthetic CDOs during housing crisis, there are derivatives of derivatives. Meaning there are series of bets based on not even the market, but on the performance of other bets. If X goes up, my Y goes down, but Joe has a derivative of that, so he also goes up or down based on what position he took.
Leverage on top of leverage on top of leverage. It’s just another way for bankers to create work and profits for themselves. It’s just numbers, but it doesn’t represent real value. It’s not a pile of coal. Or gold. Or stock. It’s all just bets. Pixie dust.
There’s no risk for the banks. Everyone involved is wealthy. Worst case their bets go bad and they get fired. Still millionaires. They don’t even give a fuck if it collapses. No one is going to jail. They will be bailed out. Worst case some banks completely fail, and then the people will get hired at other banks.
History has taught the bankers that stealing big is the best way to get away with it. If the entire system explodes, no one person is guilty. They don’t even attempt prosecutions. They just bail out their friends with taxes that will be paid by our grandchildren’s grandchildren.
Comment I just made: Basically our usury masters creating something out of thing air with no intrinsic value, and getting idiots to buy it.
The value of a derivative is derived from some other asset. The big one in 2008 was mortgage-backed securities (MBS), securities created from groups of mortgages. These "tranches" were loosely valued by the mortgages they contained, and then sold as investments. Multiple times!
Basically our usury masters creating something out of thing air with no intrinsic value, and getting idiots to buy it.
That doesn't really explain derivatives. u/corrbrick gives the definition, when the value is derived from something else.
A common derivative is the short sells, where you make an investment where you buy the contract that the value of what is invested is derived on some expected future value of that same stock.
Essentially derivatives were invented to mitigate risk. You buy a security that represents a portion of a bundle of mortgages with a known failure rate. If it fails at 2% but takes in 4% you've got a good investment. On paper anyway.
Yes, that's more specific to mortgage related derivatives. There are many different types, I'm not going to pretend expertise beyond what I've mentioned though.
You should watch The Big Short if you haven't' already. Good movie about 2008 crisis.
Thanks! Will look into it!
Can’t they just keep printing? So they never have to worry?
The FED prints the money to bail them out.
Then they don't use that money to pay off the overleveraged investments.
So, they take our money, invest it poorly, get bailed out by more of our money (taxes and watering down the dollar through printing) and then take that money and double down on the shitty investments that got them in trouble to begin with.
Highway robbery is more respectable, because at least they don't print money.
Not to mention that five of the top six ate shareholder banks in the Fed
Like the sad old joke of the gambler down on his luck that is given some $. Instead of paying down his debt, he gambles it again hoping to win big again and pay it all off with some left over. Yet again, he loses.
sad old joke, indeed...my lifelong best friend's husband did precisely THIS, at a casino...she was still working, he retired long before and was doing all of this behind her back, with credit card debt, HELOC etc...they almost lost house and everything else, so she had to keep working much longer than she should have had to...AND he kept up same behavior until the day he died, on a smaller scale through lotto and scratch-off tickets...(sorry about the rant...)
Similar to big pharma who have zero liability for deaths and damages to the people, some would argue is by design. The government instead, uses tax payers for the damages caused. All the whole big pharma and government, both laughing their way to the bank?
is there a way to lookup which local banks or credit unions level of risk?
so $0 is what you want
any tips on finding a local bank (socal) that doesn't have derivatives risk? afaictl anything that has less than $1billion in assets is what to look for , and I'm having no luck finding anything like that.
You could try federal credit unions.
They aren't technically banks though... Putting money in a credit union means you agree to not being able to withdraw all your money at once -- you have to set up a withdrawal payment plan to do that.
Imagine you and all your neighbors agreed to put money in the same vault and hire someone to manage that vault.
The money goes out to investments like the big banks, but if anyone tries to take all their money out they have to call back all those investments immediately, otherwise everyone goes bust.
You also have daily spending limits, at least for non-cheque and debit card expenditures.
Typically, you don't want more than around 14,000 in a federal credit union, but they are safer than banks because they don't get all the safety nets like the big bankers, so they invest more wisely.