Posted on 05/08/2023 1:07:51 PM PDT by george76
Hallucination or not.
Back in earlier banking “crisis” some people warned that government bailouts would only encourage more problems.
I must be hallucinating. No way could that be true.
Row of dominoes?
Rescue Plan, Biden reaction to “climate crisis” created inflation.
The FED is obligated by law to react that fight inflation. They did what they are legally bound to do.
The actions of the FED have repercussions.
Who pushed that first domino in Jan 2021?
(From the Article):" The U.S. Federal Reserve has revealed that 722 banks reported unrealized losses exceeding 50% of their capital
at the end of the third quarter of 2022.
“Rising interest rates are creating significant unrealized losses in investment securities and in some cases depressing tangible equity,”
according to the Fed’s Division of Supervision and Regulation."
"722 Banks Reported Unrealized Losses of More Than 50% of Capital The U.S. Federal Reserve has revealed in a board presentation
by the Division of Supervision and Regulation that 722 banks reported unrealized losses exceeding 50% of their capital
at the end of the third quarter of 2022.
The presentation, released to the public in April, is dated Feb. 14.
It highlights the impact of raising interest rates on certain banks and the Fed’s supervisory approach to address issues at these banks."
“Rising interest rates are creating significant unrealized losses in investment securities and in some cases depressing tangible equity,” the Fed presentation states.
“As interest rates increase, banks with large market value losses could experience increased financial and risk management challenges.”
The Fed presentation further details:
At third quarter end, 722 banks reported unrealized losses exceeding 50% of capital."
Moreover, “31 of these banks report negative tangible equity levels,” which means they are currently “not able to borrow new money from Federal Home Loan Banks
and may lose the ability to sell loans to Government Sponsored Enterprises,” the Fed presentation adds. "
Gold is at $2,027.90 today. Silver is at $25.45.
Something is afoot. At least it’s balancing out all my LOSSES thanks to our brain-dead politicians and the Fed.
“It’s Spooky”: Stanford Professor Warns Thousands Of US Banks Are “Potentially Insolvent”
Following the collapse of First Republic last week, the meltdown of three other banks, and the Federal Reserve’s quarter-point increase, making the tenth straight hike in an aggressive campaign to tame elevated inflation, a professor of finance at the Stanford Graduate School of Business presented a grim warning that the regional banking dominoes are falling.
In a New York Times opinion piece titled “Yes, You Should Be Worried About a Potential Bank Crisis. Here’s Why,” Professor Amit Seru wrote, “the fragility and collapse of several high-profile banks are most likely not an isolated phenomenon.” He said, “A damaging combination of fast-rising interest rates, major changes in work patterns, and the potential of a recession could prompt a credit crunch not seen since the 2008 financial crisis.”
You are partially correct. In this case rates rose at an unprecidented rate to new highs in a years time. Previously, rate increases were much slower, enabling banks to cycle funds out of money losers and maintain their balances. The rate increase left banks holding long term, low interest rate bonds they couldn't get out of without substantial losses.
In addition, the speed of transactions has changed dramatically. I can shift all my assets between my accounts at different institutions with a few key strokes and be cleared in minutes if I pay for wire transfer, or 3 days if I don’t pay the extra. Previously it would take a lot more time and the banks could adjust.
Why should we believe them? Aren’t they just another part of the infamous “deep state” that’s always lying to us about everything?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.