Way OT but systemic risks to stocks are at least as important as company specific risks This criticism is from a central bank, the BOE !
At their peak, the world’s 100 largest banks had a market capitalisation of around $4.9 trillion. That was around 8.5% of annual global GDP. At its trough, this had fallen to $1.4 trillion – a destruction of financial capital of $3.5 trillion.
Banks have subsequently recovered some of their poise. Nonetheless, the market capitalisation of the world’s 20 largest banks today remains around half its value in 2007. Their market value lies well below the book value of their assets, with the ratio of so-called “price to book” currently around 0.8. Put simply, that means many banks are a value-destruction machine for investors.
Yet these losses pale by comparison with the losses felt by the wider economy as a result of the financial crisis. In the UK, eight years on, GDP is still tracking around 15 percentage points below its pre-crisis trend
survey in 2013 of financial professionals found, rather remarkably, that over half believed their competitors engaged in illegal or unethical behaviour.22 A smaller, but still high, fraction of 24% believed their own company engaged in such practices.
Bankers mostly walked away from the crisis richer than ever. They will do so next time too as long as they continue to own the political process.
In my area real estate buying is back to the early stages of flipping and car loans now extend to 97 months. Debt is back in style