Posted on 11/20/2023 9:17:17 AM PST by davikkm
Moody's Investors Service has revised the rating outlook to negative for Bank of America, JPMorgan Chase, and Wells Fargo, citing concerns about the U.S. government's potentially weaker capacity to support systemically important banks. Despite the negative outlook, bank stocks rallied following subdued inflation data. Moody's maintained a stable rating for Citigroup's debt amidst these developments.
https://twitter.com/texasrunnerDFW/status/1726581800871575849
via morningstar:
"Stocks rally with broad market on tame CPI data even as Moody's cuts view on big banks to align with its reduced outlook of U.S. debt
Moody's Investors Service cut its rating outlook to negative from stable on Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co., but the stocks rallied Tuesday on the heels of tame inflation data.
Meanwhile, bond prices of banks also climbed dramatically as yields fell, in another bullish move for the sector (see chart below).
Moody's negative outlook on bank debt reflects "the potentially weaker capacity of the government of the United States of America (Aaa negative) to support the U.S.'s systemically important banks," analyst Peter E. Nerby said in a research note published late Monday.
Moody's kept in place its "Strong+" score for the macro profile of the U.S. banking system.
Moody's said the downgrade of Bank of America (BAC), JPMorgan Chase (JPM) and Wells Fargo (WFC) aligns with its rating cut on Friday of U.S. sovereign debt to negative from stable.
Moody's maintained its stable rating on Citigroup Inc.'s (C) debt." https://twitter.com/DiMartinoBooth/status/1726576728984961471
It didn’t have to be this way. I guess it’s just part of the Great Reset.
“I guess it’s just part of the Great Reset.”
Another green day. Markets almost back to recent highs.
Remember, the banks own your money.
.Gov will bail out the big banks—the Fed can create any needed cash with a click on a mouse.
It is average peon who needs to worry about not getting bailed out...
This means the situation with these institutions is probably even worse than most of us realize, because Moody’s and the other ratings agencies are more like lagging indicators than leading indicators. Well, we can’t say that we weren’t warned.
Up to some degree, you are right.
However, this invented money always had a relationship to treasury bills that the Treasury Department sold. If you invent new T-bills, have a sale, and find marginal interest...then invented cash stalls.
I’ll predict three things:
1. Early to mid-2024, a ‘rush’ starts up with people feeling uncomfortable about their money in the bank....going up and trying remove $10,000 to $20,000 for their home-safe (saying the banks are in failure mode).
2. Banks and the Treasury Department will invent a limit on cash removal (either per day or per week)...ensuring that only a limited amount of cash can be existing.
3. People start to convert on a massive scale to Bitcoin or gold, unlike anything we’ve ever seen.
All of this uneasy business will go turbo because Yellen, the Fed, President Biden can’t deliver confidence.
You might want to review the history of 1929 and the 1930s decade....we will repeat this on a massive scale.
#2 on the list is unnecessary because the government already has a $250,000 FDIC cap for bank exposure on individual deposits.
#3 is probably pointless for 99% of Americans. I don’t know any business establishment within 50 miles of my home that accepts gold or Bitcoin for transactions.
When did moody’s make this announcement?
I’m looking - I don’t see it. I’ll keep looking.
Brandon’s not worried. He banks with China, Ukraine, and Hamas.
We have very differing views on this.
Look at what happened with the Silicon Valley bank failure.
This was a large (top twenty) bank that crashed and burned.
The Federal response was to have the FDIC insure all deposits, not just the $250K currently required. I don’t even know if that was even legal...but whatever...
In addition the Federal Reserve opened up their window to any banks in trouble and said “if you need cash walk up and get it”.
This is totally crazy but that is exactly what they did.
There is no inherent limit to that approach (though of course it would inflate the currency to the moon).
I see no reason that they would go the other route of limiting withdrawals when they have already proved the FDIC insurance and open window scheme calms everybody down to play the game another day....
bkmk
Last one I saw was like in March or April.
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