4um: What's in your wallet?

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Title: What's in your wallet?
Source: [None]
URL Source: https://www.zerohedge.com/markets/cftc-quietly-bails-out-capital-one
Published: Mar 29, 2020
Author: ZH
Post Date: 2020-03-29 21:55:37 by Anthem
Keywords: None
Views: 950
Comments: 5

There ain't nuthin! Nuthin left in my wallet! WTF!
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#1. To: Anthem (#0)
Any idea what sunk Cap One? I did not read the article.
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
Lod posted on 2020-03-29 22:03:46 ET Reply Trace Private Reply
#2. To: Lod (#1)
At the core of the issue were plunging oil prices, which ended up having a margin call effect on the bank's swaps exposure; and since Capital One’s waiver lasts until Sept. 30, if energy prices remain low or the bank’s exposure remains above the threshold, it will register as a swap participant or make business adjustments, the CFTC said on Friday.
And here is why anyone who currently has a deposit account at CapitalOne may consider quietly moving the money elsewhere: according to Reuters, the CFTC designation entails a number of complex and costly reporting and compliance obligations, which the CFTC spokesman said could hurt the institution’s ability to keep lending.
In short, CapitalOne made a terrible trade, betting via derivatives that oil would not plunge to where it is now - at 17 year lows - and only CFTC intervention prevented a margin call of unknown magnitude from being sent to Capital One's corner office. Which is surprising considering that the bank is a relatively small player in the energy lending and financing business, with energy loans accounting for just 1.4% of its total loan book, according to its filings.
Freedom is a social skill.
Anthem posted on 2020-03-29 22:07:57 ET Reply Trace Private Reply
#3. To: Lod (#1)
Any idea what sunk Cap One?

Greed.
The light that burns twice as bright, burns half as long. - Dr. Eldon Tyrell
Godfrey Smith: Mike, I wouldn't worry. Prosperity is just around the corner.
Mike Flaherty: Yeah, it's been there a long time. I wish I knew which corner.
My Man Godfrey (1936)

Esso posted on 2020-03-29 22:10:57 ET Reply Trace Private Reply
#4. To: Anthem (#2)
Thanks for the details. It was not a great idea to allow banks to enter the equities markets as players instead of just investors.
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
Lod posted on 2020-03-29 22:23:40 ET Reply Trace Private Reply
#5. To: Lod, 4um (#4)
Hard to imagine a bank not making money when their CC interest averages 21% and they're paying depositors 0.01% interest.
I must really be busting MWAFCU's balls with that 2 something % 13 month CD I took out a while ago.
The light that burns twice as bright, burns half as long. - Dr. Eldon Tyrell
Godfrey Smith: Mike, I wouldn't worry. Prosperity is just around the corner.
Mike Flaherty: Yeah, it's been there a long time. I wish I knew which corner.
My Man Godfrey (1936)

Esso posted on 2020-03-29 22:31:44 ET Reply Trace Private Reply
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