It's Lehman's turn in the woodshed

3 responses

  1. AT says:

    My hypothetical question for everyone is… what would the world look like if all debts were called tomorrow?

  2. TY says:

    AT – I see one of two scenarios:

    1. a post-nuclear apocalyptic nightmare where mass poverty engulfs the G7 nations as loan defaults trigger systemic losses and bankruptcies, and all i-bankers, securities law firms, accountants and rating agencies are thrown into the oceans, or

    2. a land of sugarplums and fairies where everyone is happy that there’s no more economic reliance on fractional reserve monetary systems and everyone can get back to the business of generating wealth by manufacturing tangible assets—oh, and all i-bankers, securities law firms, accountants and rating agencies are thrown into the oceans.

  3. ilikereylestate says:

    “It’s Lehman’s turn in the woodshed” oh gosh i am still on the floor laughing my ass off. if all debts were called in tomorrow i guarantee somebody already thought about it and is trading puts or bets and shorting and longing them. if it does happen that trader or firm would be the new “fractional reserve monetary system” since he, she or it would have all the capital and liquidity. i doubt this would happen since the fed would have an epiphany and flood the market with currency as it is doing right now. so the answer to your first question under normal market conditions with the removal of the circuit breaker in the stock market some type of crash would have plunged the financial markets into hell. not to mention the fed playing match maker and giving our tax dollars to certain financial players to artificially hold or stabilize a very delicate financial system on the verge of collapse. so no i really do not think the banking or financial system will collapse but rather transfer to one entity. the key is to know which entity and to place shorts and longs on it. and no the fed is not that entity it just will control it behind the scenes 🙂

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