{"id":17765,"date":"2016-02-13T17:10:50","date_gmt":"2016-02-13T22:10:50","guid":{"rendered":"http:\/\/olduvai.ca\/?p=17765"},"modified":"2016-02-13T17:11:40","modified_gmt":"2016-02-13T22:11:40","slug":"17765","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=17765","title":{"rendered":"Mutual Funds, ETFs at Risk of a Run Warns Stockman"},"content":{"rendered":"

Mutual Funds, ETFs at Risk of a Run Warns Stockman<\/a><\/h3>\n
In one of his starkest warnings yet, Former White House Budget Director (Office of Management and Budget, OMB),\u00a0David Stockman has warned that banks and the global financial system remain vulnerable\u00a0and there is likely to be another global financial crisis which will be worse than the first involving\u00a0\u201ca run on mutual funds and ETFs.\u201d<\/em><\/div>\n
\n

\"stockman\"<\/a><\/p>\n

Stockman warns in a\u00a0Bloomberg interview<\/a>\u00a0that Deutsche Bank<\/p>\n

\u201chas a $2 trillion balance sheet and they have a net tangible equity of $66 billion. So that is 3% \u2013 \u201cthey are leveraged 30 to 1 in terms of net tangible equity.\u201d<\/em><\/p>\n

\u201cWhat is whirling around in that $2 trillion nobody knows but I do think that the banks have unloaded the worst of their stuff and today it is in mutual funds and ETFs, today it is in non bank financial institutions, like all these companies that have come up over night to make auto loans by selling junk bonds as a form of capital.\u201d<\/em><\/p><\/blockquote>\n

This is reminiscent of the first financial crisis and the financial collapse wrought on the world with the subprime mortgage fraud as beautifully illustrated in the must see movie\u00a0\u2018The Big Short\u2019.<\/em><\/p>\n

Regarding how \u2018mom and pop\u2019 investors and pension owners are vulnerable, Stockman says<\/p>\n

\u201cThe dangers of a run are far more serious now than it was\u00a0with banks then.\u00a0Back then, main street banks did not have to mark to market most of their assets and there never was a run on mainstreet banks, it was only on a few hedge funds \u00a0\u2026\u00a0<\/em><\/p>\n

This time you are going to have a run of $5 trillion or $6 trillion of mutual funds. This time you are going to have a run on the ETFs. There were only $1 trillion of ETFs in existence in 2008. There is over $3 trillion now and they are an\u00a0<\/em>accelerator mechanism.\u201c<\/em><\/p><\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Mutual Funds, ETFs at Risk of a Run Warns Stockman In one of his starkest warnings yet, Former White House Budget Director (Office of Management and Budget, OMB),\u00a0David Stockman has warned that banks and the global financial system remain vulnerable\u00a0and there is likely to be another global financial crisis which will be worse than the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[2120,8258,312,8689,11511,11417,11251],"class_list":["post-17765","post","type-post","status-publish","format-standard","hentry","category-economics","tag-david-stockman","tag-etfs","tag-financial-crisis","tag-goldcore-com","tag-mark-obyrne","tag-mutual-funds","tag-the-big-short"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17765","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17765"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17765\/revisions"}],"predecessor-version":[{"id":17767,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17765\/revisions\/17767"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17765"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17765"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17765"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}