- BNP and SocGen consider 'life assurance sales' to be an important part of their business, while most other banks are divesting insurance business to raise capital (Lloyds and RBS have large insurance businesses are in dire need of capital, and are likely to sell)
- China's sovereign wealth fund: mining, energy, and real estate
- 2007 to Jan 2009, $1500bn flowed into US money market out of more risky assets
- Greenspan cut rates, promised to keep them low, openly lent to banks
- Banks borrowed at 3%, bought longer dated treasuries at 6%. Recapitalized, provided liquidity to other areas
- Equity and emerging markets went up, bond yields fell. Recovery by 1993
- Greeenspan started to tighten in 1994
- Banks were very highly levered, 10YR collapsed (yields soared), no more liquidity
- Mexican tequila crisis
Today:
- Banks are loading up on government debt. Governments are already starting to raise rates? Could this all happen again?
- 2 YR notes were in record demand at the latest auction - investors do not see an economic recovery anytime soon - keep rates low
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