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    HomeBreakingHedge Fund CIO: “I’m Growing Extremely Concerned About The Market. We’re Close...

    Hedge Fund CIO: “I’m Growing Extremely Concerned About The Market. We’re Close To A Broad Liquidation Point For Markets”

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    In the past, banks were vulnerable to robbery, fire, and other problems. Banks are currently viewed as a conservative alternative to other riskier assets, although there is a covert fear about the economy and stock trading, such as that done on Wall Street.

    Banks make several investments in stocks, bonds, businesses, and real estate. They are thus connected to commercial and stock-trading activity. Some banks have a reputation for making innovative investments, while others have a reputation for being more cautious and focusing on tried-and-true investments.

    Everyone is aware of how the American economy is currently doing. Prices are high, and the prospect of conflict lurks in many parts of the world, which has an impact on supply and prices as well. These are the considerations that voters have while evaluating the candidates running in the midterm elections. However, these elements have an impact on stock prices as well as the purchasing and selling of those stocks.

    A mass liquidation, like that in the 1929 stock market crash, happens when all stockholders decide to sell their shares at the same moment, typically while the value of the stocks is falling. The need to sell will arise if traders do not have enough available funds.

    Concerns concerning bitcoin trading are currently present as well. As crypto owners strive to raise money in the case of a stock market meltdown, there may be a large-scale selling of crypto assets. Although many cryptocurrency investors also engage in stock trading, bitcoin and other cryptocurrencies are known for being extremely volatile investments that carry a high level of risk.

    A banking crisis would arise if numerous U.S. banks encountered liquidity issues simultaneously, whether as a result of being all affected by the same external financial shock or as a result of a failure in one bank or a group of banks that spread to other banks in the system.

    In order to forecast the near future of the banking industry in the United States, several investment professionals are examining the previous performance of the safety of banking investments.
    Eric Peters, CIO of One River Asset Management, is quoted by Zero Hedge as saying the following:

    “Following the 2008 crisis, there was this well-intended, monoline focus on banks becoming safe,” said the CIO, high atop his prodigious pile. “The thought was that by making banks permanently safe, we could effectively eliminate systemic risk,” he said. “That’s wrong of course, but not for obvious reasons.” Following each financial crisis, the politicians, regulators, and policy makers strive to ensure that we never repeat the debacle, which inevitably appears obvious in hindsight. They usually succeed, and in so doing, sow the seeds of something novel.

    More on this story via The Republic Brief:

    “Removing the possibility that banks would be the source of risk in the financial system required that regulators prevented them from having flexible balance sheets,” continued the same CIO. “In a market decline, banks used to be able to buy distressed assets.” Expanding their balance sheets, absorbing panic selling by their clients, taking on market risk. “But they can no longer be a buyer in periods of market stress… CONTINUE READING…

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