The world financial crisis as a result of war is coming ever closer. This looks to be the sign of that:
If BlackRock is suffering cash flow constraints, there are signs of:
- Market panic
- A flight to safety
- Stress on credit lines for one of the biggest financial institutions in the world.
If any of these are true, markets are melting down much faster than I expected.
This is serious. Monday morning is going to be scary. Hold your breath.
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Sounds serious. There are some typos.
Sorry, I am knackered tonight.
Please don’t apologise, thought you would rather know. Stuck on a train in countryside & your blog is particularly appreciated just now.
🙂 Good luck.
Liquidity mismatch. Offering investors the ability to get out when the underlying assets can’t be sold quickly enough is always a dangerous game. First Blue Owl and now Blackrock – this does not look good.
The odd thing (at least to me) is how resilient US stock are. S+P500 is down 1 or 1.5% today and that is mainly as a result of a poor US jobs report. It is only 3% off all time highs.
Surely we should be off at least 10% on the news we have seen in the last week or so.
Agreed, entirely.
From a causal point of view, there needs to be a reckoning at some time in the future for those responsible for this.
Agreed. There should be…but it is unlikely.
Cashflow and liquidity. Lehman eventually paid out all of its creditors in full. It just couldn’t pay when demanded. And we know how that ended.
Senior unsecured debt paid out about 40%, only creditors of Lehman Europe got 100% payout (as well as segregated Broker-Dealer customer accounts everywhere).
Of course, the big winners were the lawyers and liquidators who gathered fees of about USD 10bn. The other winner was Barclays that took over a very good Repo business in the US that had quite a bit of “fat” in the marks of the positions that, when the dust settled, made them quite a bit.
[…] As I noted on Friday, there are other signs of turmoil. Some of BlackRock's funds have imposed withdrawal limitations. The number of jobs created in the USA during February was well below expectations. These are very real signs of stress in the oil and gas markets, and they are bound to have ramifications. […]