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kleinbl00 · 3192 days ago · link · · parent · post: Somethings rotten in the economy FED holds emergency meetings
Except that they offer a deal so good for the banks that the rates they have to pay are f'n ruinous: Which, in a NIRP-world, provides quite a lot of drag on liquidity. If you're giving bond-holders f'n 16 percent while your intrabank rate is like -1 percent your costs of doing business are sucking. I'm no fan of banks but to my understanding, CoCos are the equivalent of a Providian credit card: things are great until they aren't, and then all of a sudden you are in.the.shit. Commence the debt spiral. The shit. I see it. It's over there. And we keep walking closer.