Quote
U.S. banks have found a new way to unload risk as they scramble to adapt to tighter regulations and rising interest rates.
JPMorgan Chase, Morgan Stanley, U.S. Bank and others are selling complex debt instruments to private-fund managers as a way to reduce regulatory capital charges on the loans they make, people familiar with the transactions said.
These so-called synthetic risk transfers are expensive for banks but less costly than taking the full capital charges on the underlying assets. They are lucrative for the investors, who can typically get returns of around 15% or more, according to the people familiar with the transactions.
U.S. banks mostly stayed out of the market until this autumn, when they issued a record quantity as a way to ease their mounting regulatory burden.
https://www.livemint.com/companies/big-banks-cook-up-new-way-to-unload-risk-11699375225695.html
Are the Banksters of the Banking Cartel using their old financial magic tricks again? During 2007 - 2008, we have learned that "Synthetic Risk Transfers" through CDOs tranched within other CDOs caused one of the greatest financial collapses in history. I always try to be a bull - a PermaBull. But it's actually very hard not to have bearish periods when you know that the banksters never learn. They probably don't care and believe they will be bailed out again.
I believe not, not while inflation is NOT under control. This time there might be NO bail out.