FIRST STORY: Banks are (not) where the money is
Hashtag banking illiquidity
In the not-too-distant past, there were businesses that needed money to do business stuff, and often they would borrow the money from banks. The advantage of borrowing the money from banks is that banks have cheap funding: The banks get a lot of their money from depositors, and they can pay the depositors a very low rate of interest. The disadvantage of borrowing the money from banks is that banks have risky funding: The banks get a lot of their money from depositors, and the depositors can withdraw that money at any time.
so in recent years, because of regulatory changes and general caution, banks have at the margin retreated from lending money to businesses to do business stuff. Instead, other lenders — “private credit” — increasingly lend money to businesses to do business stuff. What do the banks do? Well, one thing that they do is lend money to the private credit firms.
LOL... "move up the capital structure" is a really, really ugly phrase.
...quoting some Bloomberg news:
"US banks are lending more to private credit firms, private equity shops and hedge funds, with loan volume to these non-bank financial institutions up 26% this year through November, according to Fitch Ratings."
Yeah, we regulate banks so much and so hard that it's better for them to offload banking to different "non-bank" entities. Brilliant plan. Thank god for financial regulators.
SECOND STORY: The future of banking is Strategy, obvs, and it sells overvalued shares to fund billion-dollar bitcoin purchases lol
During Paper Bitcoin Summer (#1217842) you could sell shares representing $1 worth of bitcoin for 2, 3, 5, 10 dollar. FUCKING PRINT THAT SHIT... and that's what savvy (and not-so-savvy) Bitcoiners greedy-fiat-financiers did, all summer long.
Only some schmucks actually believed the Kool-aid they were selling
you know, come on. That can’t last forever. For one thing, eventually people will notice and stop paying $2 for $1 of crypto. For another thing, though, you’re closing the arbitrage. [...by your own actions: buying bitcoin, selling shares]
"If you do this without limit, eventually the premium will close."
if you’re unlucky, your stock trades down to 90 or 80 or 50 cents on the dollar, and you face hard choices like “should I run the trade the other way and sell my Bitcoin to buy back stock?” (“Yes” is the good financial trader answer, but “no” is the good crypto true believer marketing answer; I don’t know what you should do.)
We do that trade ALL DAY LONG, suckers
if you had asked me two years ago “is it a good idea to sell $1 worth of stuff for $1.10” I would have said “of course what are you even talking about.” Compared to, you know, any other possible business, selling stock at a 10% premium to buy Bitcoin is still pretty good. Not what it used to be, but still pretty good.
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