FILE - Twenty dollar bills are counted on June 15, 2018, in North Andover, Mass. The number of Americans who do not have a bank account fell to a record low last year, as the proliferation of online-only banks and an improving economy is bringing more Americans into the traditional financial system, according to a report Tuesday, Oct. 18, 2022.
The simultaneous massive sale of bonds crashed the U.K. bond market and raised U.K. interest rates further, which — within a day — became a self-fulfilling doom spiral of selling in the world’s oldest bond market. This Gilt crash didn’t take down the U.K. financial system — yet. But it did contribute to the fall of Truss, who resigned as prime minister after just 44 days in office. Oct. 31 is the announced date for the Bank of England to resume selling bonds. So stay tuned to see whether this nightmare has passed, or if it will prove to be the canary in the coal mine of a larger catastrophic financial meltdown.The shape of the emerging markets crisis of winter 2022 is just beginning to emerge.
We are not prepared for the unexpected polycrisis of global financial, food and energy shocks. People do not react calmly to food and energy shortages. A polycrisis in the developing world could very well take down many more governments than just the U.K. prime minister’s administration, with highly destabilizing effects.I understand U.K. and developing market economies may sound exotic and esoteric.
Anyone who does not need to sell — and who presumably already locked in a 30-year mortgage at a lower rate in previous years — is somewhat immune to this problem for now. Since 90 percent of mortgages have fixed rates, households are not as vulnerable to rising interest rates as they were in 2007 and 2008, when almost half of home loans originated in those years had floating rates.These scary monsters I’ve described change absolutely nothing about the way I invest.