A global recession is on the horizon - please read OP for mod warning

More like it's a giant game and every so often when the music stops somebodies left without a chair.

The majority of investors know its all just a giant ponzi scheme, nothing worthwhile is being produced by these banks. They're fancy loansharks who love a flutter.

When the wind changes the masses get spooked because they know its bagholding time and nobody wants to be the patsy.

One other point to note is 2 years ago 2 banks decided to pull out of Ireland. I think the reasons why should be examined to really get an idea of weather Irelands banks are sound remember one of the pillar banks still has a significant % of shares held by the state and now you have banks going belly up which will lead to contagion I had to laugh at some on here giving ahh its a once off nothing to see here... It is all about the masses psychy and when more people get the jitters the bigger the contagion. We also cannot bring down interest rates and a lot of countries are sitting on record levels of debt, you only need to look at the US, the UK even our own little country is at record levels so do they borrow more now at the much interest rates or let it burn?

They're not worried, they're closing positions that they targeted for these levels.

Once that washes through it will calm down again.

Besides, what else are they going to invest in thats going up? Nowt.

I think you’re missing the point. These bonds are sold as a form of insurance whereby the debt converts to equity to recapitalise the bank.

these instruments were introduced after ‘08 so that governments wouldn’t need to recapitalise a failed bank. Irish banks have all issued these instruments.

As for asking why 2 banks pulled out of Ireland it’s a very simple answer they were to small to cover fixed costs and therefore were not providing an adequate return on equity.

I am not missing the point. The point I am making is if any bank in Ireland had a credit suisse moment and a Minister of Finance comes out saying we would be bailing out the bondholders and guaranteeing another bank I reckon he would be taken out. The amount of people who had their lives ruined after those decisions back in 08 was scandalous and the fact is debt doesn't disappear it just goes to someone else. With the analysis that went on after 08 it was clear this was the wrong decision and people now know this and won't accept it again.

I think a number of factors have played a part in KBC and Ulster banks leaving Brexit, the rise of online banking and other banking entities such as Revolut. As far as I am aware Ulster made a profit on their Irish business operations in 2019 and then losses from there on in. The point I am making is regardless of how big or small if both Ulster bank and KBC were having issues with their Irish portfolio then surely its something that may hit BOI or AIB at some stage. Remember this little country of ours is an outlier with regards to other country in that it does not do bank repossessions for mortgage defaults in big numbers. So now with that and an increase in interest rates its not hard to see a tsunami of mortgage defaults coming down the track and likelihood is the banks will have to suck it up as the law allows the mortgage holder live there without paying their debt for years and decades at some stage. Now also throw in the fact the asset backing the mortgage has seen its first price drop in 3 years.

If an Irish bank, that was relatively sound, suddenly got in trouble through contagion, and shares in other Irish banks started to drop sharply. What would you propose be done?

No more forward guidance from the ECB

I think this will depend on inflation if its up there would be more questions than answers not to mention confidence in the already burdened bank system will see more contagion. They have nailed their colours to the flag and I think they will have to keep going with rate rises.

...once again, the problem yet again isnt actually public debt, but private debt/credit, which its main purpose is now to (re)inflate the value of assets such as property, and when these asset bubbles start to burst, the whole arse falls out of the financial sector, as rising asset prices is critical in maintaining solvency of these institutions, again, very little to do with public debt!

and again, the only way try reduce, possible prevent such outcomes, is in fact to become less reliant on credit, and to become more reliant on public money supplies, i.e. deficits etc!

and again, financialisation of our economies has failed, we now have decades of evidence supporting this, as financial sector crisis have significantly increased in this era, in both frequency and magnitude....

increasing rates is simply stressing the global financial system to the point of breaking, due to the exposure its institutions has, this is actually why we re stuck with this problem, every time we try to increase rates quickly, as we re currently doing, this problem will occur....

ECB won't touch in the interest rates for the rest of the year is my guess, the liquidity of banks is a far bigger problem than inflation which is primarily driven by energy prices which they can't control.

It was a tongue in cheek statement as for stashing my money in the mattress, well, if we have bank runs good luck with getting your cash out. As for assets that appreciate in value, I’m all ears as I believe there are no such unicorns any more.

Cash has to go somewhere (not under mattresses) and property has traditionally been a good investment. Likewise the stock market.

Is it a traditional bank? Do you see a Revolut branch anywhere near you?? Its a virtual bank.

eh why not under the mattress. I mean property and the stock market as the only other alternatives? I mean you may as well chuck it on a nag at Cheltenham I can see a lot of safes being bought and cash being horded.