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Thread: Black Monday

  1. #5391
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    Quote Originally Posted by NeverQuestion View Post
    Your missing the point perhaps. The world is moving to cashless. Soon you will not be able to keep funds anywhere but in a bank. Personally, all my daily funds are in a bank. "Bail in" means those funds are taken from you to keep the bank solvent. So personally, tax payers funds will make more sense. Or even better, QE. But no matter what way you look at it. You will be paying the bill for excessive risk taking of the banks.

    I do agree with you tho. Why should reqular people. Who have no investment knowledge, but have to keep money in the banks for security and pay Bill's, have to bail out a bank? When it was the bank who either, through greed, or mismanagement, get to walk free from it?!

    Pretty sure that following "Bail In" there will be limits on how much you can withdraw per week, or even per month. These measures will be in place to prevent bank runs..

    Letting a bank fall over will just cause a knock on effect. Best option I see. Tax pay bails out. Nationalize the bank. Use it to pay back the debt to the public...Then sell it down the track to make a return to keep the National supporters happy!
    To avoid the issue of you being the depositor bailing out the bank only have a revolving credit with any bank for your own liquidity
    Last edited by kiora; 14-04-2019 at 08:01 AM.

  2. #5392
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    Quote Originally Posted by Baa_Baa View Post
    Presumably you have a bank account like most of us, possibly with some money in it? If so, it is you and all of us in similar circumstance who are exposed to the 'bail in' theory enabled by law in NZ.
    I do but only enough to get me by week by week. It is immaterial and I believe it is for the majority of kiwi's. Those that have $100,000's in term deposits and other investments with banks should not be bailed out, just like if I invest in Snakk or Feltex or any other company that goes under I should not get bailed out. If there was a bail out proviso, it should be restricted to $2,000 or such so that those that can least afford to lose money are protected. But not amounts that are "investable".

  3. #5393
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    Quote Originally Posted by blackcap View Post
    If there was a bail out proviso, it should be restricted to $2,000 or such so that those that can least afford to lose money are protected. But not amounts that are "investable".
    The trouble with that is that it catches a lot of large sums which are "in transit" (as the Cypriots found out a few years back), such as money for or from property sales and purchases, that sort of thing.

    Should push ever come to shove, any bail-out would be a political decision, and we all know what happened last time - politics wins hands down.

  4. #5394
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    Quote Originally Posted by Toulouse - Luzern View Post
    What do others think of no guantees for NZ Bank Deposits?
    Sounds like nz is out of step with other developed countries but as we have no deposit insurance it would be good if everyone stopped squealing about the NZ reserve bank requiring trading banks to hold greater reserves. I appreciate the money system might be ponzi in nature so a liquidation might not be possible but in the event of a crisis I would like to see firstly lenders liquidated (at fire sale prices if necessary), secondly shareholders wiped out, thirdly bondholders wiped out and finally depositors to keep whatever is left.

    Most bank depositors would be using it as a place to store money and make transactions they would be hardly classified as investors as blackcap classifies them. Gosh they may not even know their own banks credit rating.

    Savers and depositors are getting screwed enough through govt legislation in the form of the reserve bank and targeted inflation.

    I guess depositors show as unsecured creditors in the trading banks Statement of Financial Position and will be treated as such in a crisis.
    Last edited by Aaron; 16-04-2019 at 03:54 PM.

  5. #5395
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    Quote Originally Posted by Aaron View Post

    Most bank depositors would be using it as a place to store money and make transactions they would be hardly classified as investors as blackcap classifies them. Gosh they may not even know their own banks credit rating.

    .
    I do not care. If you are putting your money with a 3rd party it is incumbent on you to do due diligence. No such thing as a free lunch. Having a govt guarantee is not equitable. Why only for banks? Why not on stocks? Or property? Or any other asset class? Anything outside your weekly wage $2,000 or so should not be guaranteed in my opinion.

    They are not using banks as a place to store money anyway. They are using banks to get a return on investment. If banks offered 0% return then anyone would be nuts putting their money in the bank. It would be safer in a fire proof deposit box in a vault or such like.
    Last edited by blackcap; 16-04-2019 at 04:05 PM.

  6. #5396
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    Quote Originally Posted by blackcap View Post
    I do not care. If you are putting your money with a 3rd party it is incumbent on you to do due diligence. No such thing as a free lunch. Having a govt guarantee is not equitable. Why only for banks? Why not on stocks? Or property? Or any other asset class? Anything outside your weekly wage $2,000 or so should not be guaranteed in my opinion.

    They are not using banks as a place to store money anyway. They are using banks to get a return on investment. If banks offered 0% return then anyone would be nuts putting their money in the bank. It would be safer in a fire proof deposit box in a vault or such like.
    Incumbent on me to do Due diligence??? I suspect even Phd economists don't fully understand all the risks in our new financialised world. If you know what might cause the next crisis and when it will occur or what the future holds please tell me I would be most appreciative as I obviously lack your intellect and foresight.

    I agree a govt guarantee for the banks is not equitable and we don't have one, do we? I thought that is why they brought in the Open Bank Resolution to dispel the notion depositors have a taxpayer guarantee for their deposits. We don't even have depositors insurance as many countries do.


    A return on investment?? anyone with money in a savings account is in theory losing at a .25% interest rate that means with a 1.9% inflation rate they are losing 1.65% per annum and as we know anything worth saving for, such as a house or shares is rising at a rate much faster than the CPI. To anyone starting out without support the chance of upward mobility looks pretty bleak in the current world, no wonder people are getting angry.

    I digress. The issue was what I think of no guarantees for bank depositors I agree with blackcap I don't think a govt guarantee for banks is fair but wonder how depositors insurance works in other countries.
    Last edited by Aaron; 16-04-2019 at 05:30 PM. Reason: punctuation

  7. #5397
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    Quote Originally Posted by Aaron View Post
    Incumbent on me to do Due diligence??? I suspect even Phd economists don't fully understand all the risks in our new financialised world. If you know what might cause the next crisis and when it will occur or what the future holds please tell me I would be most appreciative as I obviously lack your intellect and foresight.

    .
    So you just buy stocks without doing any research or anything? Just like the name and park it there?

    Anyway you don't need to do any due diligence with banks. That is the whole reason for the transparency and reporting requirements. So everyone can have a good look and you would hope the experts would pick up if banks were transgressing too far or if things were getting a bit dodgy.

    Yes there is a return on investment. The one that just preserves your capital and ensures inflation does not erode it. What if banks gave you 0% on your deposits. Would you put money in the bank then? Off course not, it would be safer in a fire proof safe.
    Last edited by blackcap; 16-04-2019 at 07:31 PM.

  8. #5398
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    Most people are dumb. Most people don't have time or knowledge to be able to work out whether a bank is safe. The general public need to be looked after, as is the purpose of a government. Bank regulation is required.

    Finally, banks don't give a return on money, after tax they barely cover the inflation. Bank is not an investment. It's a company that offers services in exchange for using your money to invest for itself. A pretty good deal for all involved, really. But as banks are required, they have a monopolistic hilt, so again, another reason for regulation. Additionally, they can put economies at risk. One more reason to regulate. Of course over regulation reduces profits and increases customers costs or opportunity cost.

  9. #5399
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    the banks are really starting there scare campaign about the proposed new capital requirements

    The Reserve Bank seems to hope the impact would be on bank shareholders, but acknowledges banks could reduce lending or push up prices.
    https://www.stuff.co.nz/business/112...r-with-farmers

    I dont believe for a minute the banks will stop lending ( kiwibank could lend more lol steal there market share) , there s/h will be up in arms about reduced divs , anyway guess its all part of there game to get the RB to back down and if they do we will have the status quo no protections for depositers in nz when the current global party comes to an end.

    one step ahead of the herd

  10. #5400
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    World debt at $250 trillion is 3x global GDP – an all-time record. And if we add unfunded liabilities and derivatives, total debts and liabilities amount to over $2 quadrillion which is 25x global GDP.

    This is not going to end well.

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