Unfortunately true. Banks are risky. Depositors are junior creditors. When banks fail you become a bank share holder. Your deposit determines how many shares of the failed bank you get. I'll stop and let you think about that for a while.
Keep going mate. I agree and have thought through all you've said thus far.
Banks should only be able to hold money, not use it, and the legal financial definition of a bank should reflect that. I think many people don't realise that there is money is being loaned out many times over, and is actually AT RISK!
Otherwise, they're more than welcome to give their money to an investment firm or loan shark to gamble away if they want some kind of positive ROI.
Banks actually don't hold anything. They are books/ledgers only. That fiat currency we use is worth nothing. A computer can totally replace a bank and it's safer since it has no interest in theft and fees.
Back in the days when banks were useful, it was a safe place to store gold. Bank notes allowed you to spend your gold and were essentially claims against your gold.
So called investment firms are bookies or casinos. They take a vig for betting your money. The people you meet at your local firm are no more knowledgeable about investing than your local car dealer. In fact, they have less interest in making sound decisions than the car dealer does because investment firms want large assets under management (AUM) to charge you 2-3% or possibly more.
You are correct, banks are highly over leveraged, (search Deutsche Bank derivative exposure), and are one bank run away from collapse.
Replace the word derivative with bet and then all the nonsense you read about derivatives will make much more sense. Also swaps are bets too.
When you start learning about finance, a picture of high crimes, international racketeering, ponzi schemes start to emerge. The main head of the criminal cartel starts with Rothschilds and the bank of international settlements (BIS) followed by the IMF, BOE and all the other central banks.
It's a deep rabbit hole and there seems to be no bottom.
>When you start learning about finance, a picture of high crimes, international racketeering, ponzi schemes start to emerge. The main head of the criminal cartel starts with Rothschilds and the bank of international settlements (BIS) followed by the IMF, BOE and all the other central banks.
Do you actually any formal education or training in such things? I studied finance (briefly), from my younger brother's lecture slides when he was still in uni, and was thinking about getting into the field of speculative finance. The way I see it - if you know what you're doing - there's infinite capacity for growth (no wage stagnation), and it is one of the only things you can do where you're not dependant on anyone else to pay your salary, so I could say whatever I wanted without fear of losing either jobs or customers.
Formal? Yes. I learned about finance in school. It was all lies. Forget going to school to learn anything useful. They teach theory only. It's not until you work for a few of the big firms you understand what really goes on. I learned most of what I know from co-workers who were in the trenches. This is stuff you don't learn in school. This is when you discover finance is really criminal. I have a good friend who is a finance professor at a university and it amazes me when we get together and discuss finance. He teaches only theory and doesn't understand reality. He wanted me to do a guest lecture after one of our discussions. I declined because I knew what I would say would instantly become "controversial". There was no upside for me.
Yes. You can do it. Be careful, the system is rigged. Watch your trades closely, don't let the market scare you. The central banks will always keep the casino going. They depend on it. When the market flash crashes, don't panic and sell. Buy instead. It will go back. This works for me. When the market is near highs and you have a profit, sell. If you do the opposite of what banks, Goldman Sachs and Jim Cramer says, you'll be better off than most. Remember, the stock market has players (banks) that bet against its clients. High frequency trading bots distort markets. It's wild.
Company financials are mostly fraudulent and do not use GAAP anymore. You can ignore financial earnings and profit and loss statements. The market is now emotional, not rational. Buy the rumor, sell the news.
Sorry for late reply. I really appreciated your insights and experience and wanted to type up a proper response, but it just never happened.
If you were to do any series or posts regarding real finance, or the more controversial parts, you have an audience. Please tag me so I don't miss it. It sounds invaluable.
I gotta say, I got my hopes up after watching Martin Shkreli's series regarding the subject, but if the financials are just bullshit,I guess that kind of financial analysis alone isn't going to work as well as I'd hoped.
The whole thing seems a bit like a big game of poker: don't get emotional, play to your strategy, and keep it mechanical. I guess if I get into the mindset that any money I put into it is as good as gone, and more like tuition payments than an investment, that might help mitigate that, but I digress.
I think I know what you mean regarding bots. I saw this happen with Kodak when the keywords "crypto currency" were picked up. Stock ballooned to 3 times the price in a few days, stayed there for a bit, and slowly returned to normal. I remember at the time thinking, there's no way that introducing a Kodak crypto currency was going to make the company worth 400 million more.
Remember, the stock market has players (banks) that bet against its clients
Can you expand on this point? Is that meant to be a hedge? Or are they purposefully trying to fleece their investors?
Sure. A bookie operates book and he earns a spread so he shouldn't care which side wins or loses. Bookies don't bet in their own books because once clients find out they're being played by the bookmaker they stop using the bookmaker because the bookmaker is cheating.
Banks/investment firms cheat all the time by betting against their clients. You've probably read that Goldman Sachs calls their clients muppets.
Yes, many investment firms fleece their clients using fees and acting as market makers for their institutional clients while selling those same securities to their muppet investors.
Banks get away with this because they act as investment advisors to both sides of the trades. Then it's difficult to see when the bank is betting it's own money.
High frequency bot trading is a euphemism for front running. Plain and simple. Imagine standing in line to buy concert tickets. You notice some people running to the front of the line snapping up your seats. When it's your turn at the window, your seats are gone but a scalper is there and sells the same seats you wanted for $50 more. This is high frequency trading: theft.
view the rest of the comments →
Jewed ago
The whole concept of storing gold outside of your control is top tier retardation.
matthew-- ago
Yup. Just like storing money in a bank.
If a bank goes under, they should be left to die, not bailed out by government.
vastrightwing ago
Unfortunately true. Banks are risky. Depositors are junior creditors. When banks fail you become a bank share holder. Your deposit determines how many shares of the failed bank you get. I'll stop and let you think about that for a while.
matthew-- ago
Keep going mate. I agree and have thought through all you've said thus far.
Banks should only be able to hold money, not use it, and the legal financial definition of a bank should reflect that. I think many people don't realise that there is money is being loaned out many times over, and is actually AT RISK!
Otherwise, they're more than welcome to give their money to an investment firm or loan shark to gamble away if they want some kind of positive ROI.
vastrightwing ago
Banks actually don't hold anything. They are books/ledgers only. That fiat currency we use is worth nothing. A computer can totally replace a bank and it's safer since it has no interest in theft and fees.
Back in the days when banks were useful, it was a safe place to store gold. Bank notes allowed you to spend your gold and were essentially claims against your gold.
So called investment firms are bookies or casinos. They take a vig for betting your money. The people you meet at your local firm are no more knowledgeable about investing than your local car dealer. In fact, they have less interest in making sound decisions than the car dealer does because investment firms want large assets under management (AUM) to charge you 2-3% or possibly more.
You are correct, banks are highly over leveraged, (search Deutsche Bank derivative exposure), and are one bank run away from collapse.
Replace the word derivative with bet and then all the nonsense you read about derivatives will make much more sense. Also swaps are bets too.
When you start learning about finance, a picture of high crimes, international racketeering, ponzi schemes start to emerge. The main head of the criminal cartel starts with Rothschilds and the bank of international settlements (BIS) followed by the IMF, BOE and all the other central banks.
It's a deep rabbit hole and there seems to be no bottom.
matthew-- ago
>When you start learning about finance, a picture of high crimes, international racketeering, ponzi schemes start to emerge. The main head of the criminal cartel starts with Rothschilds and the bank of international settlements (BIS) followed by the IMF, BOE and all the other central banks.
Do you actually any formal education or training in such things? I studied finance (briefly), from my younger brother's lecture slides when he was still in uni, and was thinking about getting into the field of speculative finance. The way I see it - if you know what you're doing - there's infinite capacity for growth (no wage stagnation), and it is one of the only things you can do where you're not dependant on anyone else to pay your salary, so I could say whatever I wanted without fear of losing either jobs or customers.
vastrightwing ago
Formal? Yes. I learned about finance in school. It was all lies. Forget going to school to learn anything useful. They teach theory only. It's not until you work for a few of the big firms you understand what really goes on. I learned most of what I know from co-workers who were in the trenches. This is stuff you don't learn in school. This is when you discover finance is really criminal. I have a good friend who is a finance professor at a university and it amazes me when we get together and discuss finance. He teaches only theory and doesn't understand reality. He wanted me to do a guest lecture after one of our discussions. I declined because I knew what I would say would instantly become "controversial". There was no upside for me.
Yes. You can do it. Be careful, the system is rigged. Watch your trades closely, don't let the market scare you. The central banks will always keep the casino going. They depend on it. When the market flash crashes, don't panic and sell. Buy instead. It will go back. This works for me. When the market is near highs and you have a profit, sell. If you do the opposite of what banks, Goldman Sachs and Jim Cramer says, you'll be better off than most. Remember, the stock market has players (banks) that bet against its clients. High frequency trading bots distort markets. It's wild.
Company financials are mostly fraudulent and do not use GAAP anymore. You can ignore financial earnings and profit and loss statements. The market is now emotional, not rational. Buy the rumor, sell the news.
This is a quick summary of what I have learned.
matthew-- ago
Sorry for late reply. I really appreciated your insights and experience and wanted to type up a proper response, but it just never happened.
If you were to do any series or posts regarding real finance, or the more controversial parts, you have an audience. Please tag me so I don't miss it. It sounds invaluable.
I gotta say, I got my hopes up after watching Martin Shkreli's series regarding the subject, but if the financials are just bullshit,I guess that kind of financial analysis alone isn't going to work as well as I'd hoped.
The whole thing seems a bit like a big game of poker: don't get emotional, play to your strategy, and keep it mechanical. I guess if I get into the mindset that any money I put into it is as good as gone, and more like tuition payments than an investment, that might help mitigate that, but I digress.
I think I know what you mean regarding bots. I saw this happen with Kodak when the keywords "crypto currency" were picked up. Stock ballooned to 3 times the price in a few days, stayed there for a bit, and slowly returned to normal. I remember at the time thinking, there's no way that introducing a Kodak crypto currency was going to make the company worth 400 million more.
Can you expand on this point? Is that meant to be a hedge? Or are they purposefully trying to fleece their investors?
vastrightwing ago
Sure. A bookie operates book and he earns a spread so he shouldn't care which side wins or loses. Bookies don't bet in their own books because once clients find out they're being played by the bookmaker they stop using the bookmaker because the bookmaker is cheating.
Banks/investment firms cheat all the time by betting against their clients. You've probably read that Goldman Sachs calls their clients muppets.
Yes, many investment firms fleece their clients using fees and acting as market makers for their institutional clients while selling those same securities to their muppet investors.
Banks get away with this because they act as investment advisors to both sides of the trades. Then it's difficult to see when the bank is betting it's own money.
High frequency bot trading is a euphemism for front running. Plain and simple. Imagine standing in line to buy concert tickets. You notice some people running to the front of the line snapping up your seats. When it's your turn at the window, your seats are gone but a scalper is there and sells the same seats you wanted for $50 more. This is high frequency trading: theft.
matthew-- ago
Thanks for this. I'll be sure to do some of my own research to understand this better.