Are Leveraged Loans the Next Black Swan?
In this report, I cover the early market action from London on Friday, October 26th, 2018. I look briefly at the precious metals, the stock market, the dollar, the bond market, and the oil price.
Today I look closely at the relationship between the gold price and the dollar Japanese yen cross and show what that relationship is saying about the direction of precious metals' price.
My major focus today, though, is on a Wall Street practice called Leveraged Loans. This is a term I am starting to hear more about and have seen mainstream institutions like the Economist magazine and the Federal Reserve warn against.
My conclusion is that these Leveraged Loans combined with the use of OTC derivatives could be the next Black Swan or trigger for the next financial crisis.
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Fed Warning Shot Bloomberg article:https://www.bloomberg.com/news/articles/2018-10-25/fed-fires-warning-shot-at-wall-street-s-riskier-loan-deals?srnd=premium
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Great analysis sir @maneco64. Your dtube explanation is always highly appreciable.
Thanks @msena
Good morning mario, oh those off balance sheet derivatives! Grrrrr will we ever know how much there is in total dollars woth? thank you for the updates and info as usual, have a great day my friend :)
Yes, that is probably what the Fed is concerned about all the derivatives written on top of the $1.3 trillion Leveraged Loans. Have a great day too and don't get too wet.
The one thing which banks should be good at, is assessing someone's creditworthiness. They have proven to be horrible at this, willing to ignore all their lending standards to make extra profit. Any major company that acts that way is a threat to society and has to go.
I remember a number of years ago Liverpool football club was sold to a pair of Americans in a leveraged buyout and over night a football club which was ok financially went hundreds of millions into debt.
As it happens Liverpool is still owed by Americans but is now in much better financial health. Cheers mike
It does definitely seems something is a foot and ready to crumble. I just wish I had more capital to buy crypto, gold and silver. I have a little but hope I have time to get more before it collapses and they go up 💯🐒
Silver Cycles chart for 26OC18
https://steemit.com/silver/@joshuaslane/the-cycles-strategy-of-buying-selling-and-holding-silver-how-it-works