Well it has been 5 years since the banks were last begging at the taxpayer till…which historically means they are due back any day now for their next tranche of bailout. And since nothing at all has changed their risk-seeking-on-leverage behaviour since 2008, and the big banks are now bigger than ever, the recent abrupt plunge in emerging market fixed income markets and currencies (entirely predictable) is likely to trigger forced selling across all global risk markets. Here is a direct video link.
Host Sara: “Don’t banks hedge?” Answer: No they don’t; not in any meaningful way..why would they when the officials have repeatedly let them keep all their levered profits while being rescued from their rightful losses by taxpayers.
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