Silver as an investment

Category Archives: collateral

Reuters Goes To China, Discovers “Ghost Collateral”

Back in 2014, a scandal erupted when media reports confirmed what many had previously speculated about China’s banking system: namely that much of China’s staggering loan issuance had been built (literally) upon air and that billions (or trillions) in loan collateral had been “rehypothecated” between two, three or many more debtors – or never even […]

Home Capital Depositors Have Withdrawn 94% Of Funds In Past 6 Weeks

According to its latest daily update, Canada’s biggest non-bank lender Home Capital Group showed the rate of withdrawals by depositors was slowing, one day after the company raised doubts about its ability to continue as a going concern, albeit for a simple reason: there are almost none left. In other words, over the past six […]

8/8/15: Transactions Costs v Quality of Banks’ Collateral / by Constantin Gurdgiev / August 8, 2015 In standard financial theory (and practice), presence of transactions costs has an impact on asset prices traded in the markets. A recent ECB Working Paper, titled “Collateral damage? micro-simulation of transaction cost shocks on the value of central bank collateral”, by Rudolf Alvise Lennkh and Florian Walch (ECB Working […]

Europe Opens $80 Trillion Shadow Banking Pandora’s Box: Will Seek To Collapse Repo “Collateral Chains” / By Tyler Durden / May 24, 2013, 10:51 -0400 In what may be the most important story of the day, or maybe year, for a world in which there already is an $11 trillion shortfall in high-quality collateral (and declining every day courtesy of Ben’s monetization of Treasury paper) so needed to support the deposit-free liability […]

Netherlands, the Next Chip to Fall? / By Mike “Mish” Shedlock / Sunday, April 07, 2013 9:36 AM Most attention lately has been on Cyprus, Spain, and Italy. Long-time troubles have been brewing in Portugal and I have an update coming up shortly. First consider Underwater: The Netherlands Falls Prey to Economic Crisis.  The Netherlands, Berlin’s most important ally in pushing for greater […]

From World’s 7th Richest Man To Margin Calls In 15 Months / By Tyler Durden / 03/18/2013 20:07 My how the ’over-levered and cross-collateralized debt-is-wealth’ mighty have fallen. Eike Batista, Brazilian entrepreneur, was the 7th richest man in the world in 2011 but as Forbes recently noted, he is the ‘biggest loser’ on their list (losing an incredible $2mm per hour), ending 2012 in 100th place after his biggest holding […]

Indebted Dragon: The Ponzi Scheme Driving China’s Construction Economy

Construction workers install scaffolding on the top of a building in Shanghai. (Aly Song / Courtesy Reuters) / By Mike “Mish” Shedlock / November 28, 2012 6:16 PM In Indebted Dragon, Professor Lynette Ong from the University of Toronto discusses how the Chinese economy relies on land as collateral to borrow money while paying the interest on […]

The Fantasy of Debt: No Trade-Offs, No Sacrifices / By Charles Hugh Smith / August 24, 2012 Easy, cheap credit has created a fantasy world where everyone “deserves” everything right now, and trade-offs and sacrifice have been banished as unnecessary. Debt offers a compelling fantasy: there is no need for difficult trade-offs or sacrifices, everything can be bought and enjoyed now. In the old […]