Posted on 04/07/2022 8:27:08 AM PDT by delta7
US/AMERICAS: Fed President Mary Daly stated that the 40-year high inflation was equally as harmful to individuals as not having a job. Daly proclaimed that the Fed believes inflation will continue to rise for some time, but tried to provide the people with some confidence. Increasing interest rates “is necessary to ensure that again, [you] go to bed at night, you’re not worrying about whether prices will be higher, considerably higher tomorrow,” the Fed president stated. The US implemented additional sanctions today on Russia. Two of Putin’s adult daughters have been sanctioned as the US is accusing them of harboring funds for their father. Additionally, the US is banning all new investments in Russia. The rule will apply to US residents and US citizens living abroad. Sberbank and Alfa Bank, two of Russia’s largest banks, will be banned from interacting with the US aside from ongoing energy purchases.
It is going to get way worse. Supply chains are breaking down.
“Having lived through the 70-80’s record inflation, most Americans have no idea the economic disaster that will last at least a decade.”
Been there, done that, too. I joined the Army because my folks couldn’t afford to help me with college.
There were no jobs at home, no gasoline, insane interest rates, food shortages, ridiculous prices for groceries, etc.
Everyone 60 and older SHOULD remember those days! Hopefully it WILL translate into votes this Fall, but people are stupid now, and it’s all by design.
I keep noticing, because I trade them, that the bank stocks are just falling day by day by day. JPM for example is down from 170 to 130. Normally, Banks would love higher interest rates, because it allows them to make more money on their Lending. But they are not acting that way at all. The only thing that I can take away from the situation is that the banks are forecasting seriously crimped economic activity going forward. And I don’t like having that view, but I can’t resolve any other conclusion.
It is going to get way worse. Supply chains are breaking down.
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Just the tip, credit markets are freezing up, banks are not loaning to each other, Fed overnight loans ( loans of last resort) are topping over $200 billion a NIGHT). Much behind the scenes, ALL legendary financial greats have been raising the alarm ( silence from the MSM). The consensus from the greats, are we an Argentina ( 40-50 percent inflation yearly) or meltdown like Venezuela ( not likely - 50,000 percent inflation).
Either way, the damage has been done and there is now no fix.
This will make the 70’s look like a tempest in a teacup.
There is a fix.
But we’ll need to restore our republic first.
Many banks were invested in Russia, in insurance derivatives, markets, commodities. The single most troubling fact is the banks are not loaning to each other ( exactly what happened during the 08 meltdown).
We pulled out in 2008 by loaning out $12 trillion to be paid back in USD with interest. It kept the demand for the USD artificially strong. Not the case today, the Fed is expecting $7-10 trillion USD to be coming home. 60 per of the world’s population has now signaled they are switching to Yuan, Rubles, and even Rupees…..equally troubling is new banking laws years ago mentioning “ bail ins”, discarding “ bail outs”. Europe and Cyprus instated bail ins years ago.
Remember the Big Lie of the ‘92 Clinton campaign?
“Worst Economy in 50 years”?
As you just pointed-out, it was clearly far worse a mere 12 years earlier during the dying days of the Carter administration, but enough people bought the “worst economy” lie to install The Bent One into the Oral Office.
Why Bank Bail-Ins Will Be the New Bailouts
By RICHARD BEST Updated August 31, 2021
Reviewed by ROBERT C. KELLY
The financial crisis of 2008 ushered in the term “too big to fail,” which regulators and politicians used to describe the rationale for rescuing some of the country’s largest financial institutions with taxpayer-funded bailouts. Heeding the public’s displeasure over the use of their tax dollars in such a way, Congress passed the Dodd-Frank Wall Street Reform and Consumer Act of January 2010, which eliminated the option of bank bailouts but opened the door for bank bail-ins.
Difference Between Bank Bail-In and Bank Bailout
A bail-in and a bailout are both designed to prevent the complete collapse of a failing bank. The difference lies primarily in who bears the financial burden of rescuing the bank. With a bailout, the government injects capital into the banks to enable them to continue to operate. In the case of the bailout that occurred during the financial crisis, the government injected $700 billion into some of the biggest financial institutions in the country, including Bank of America Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C) and American International Group (NYSE: AIG). The government doesn’t have its own money, so it must use taxpayer funds in such cases. According to the U.S. Treasury Department, the banks have since repaid all of the money.
With a bank bail-in, the bank uses the money of its unsecured creditors, including depositors and bondholders, to restructure their capital so it can stay afloat. In effect, the bank is allowed to convert its debt into equity for the purpose of increasing its capital requirements. A bank can undergo a bail-in quickly through a resolution proceeding, which provides immediate relief to the bank. The obvious risk to bank depositors is the possibility of losing a portion of their deposits. However, depositors have the protection of the Federal Deposit Insurance Corporation (FDIC), insuring each bank account for up to $250,000. Banks are required to use only those deposits in excess of the $250,000 protection.
As unsecured creditors, depositors and bondholders are subordinated to derivative claims. Derivatives are the investments that banks make among each other, which are supposed to be used to hedge their portfolios. However, the 25 largest banks hold more than $247 trillion in derivatives, which poses a tremendous amount of risk to the financial system. To avoid a potential calamity, the Dodd-Frank Act gives preference to derivative claims….
Read the entire article. Much going on behind the banking curtain.
But, but, Mr. Dimon said JPM only has about $1 bn exposure to Russia. Not really a huge hit to his otherwise “fortress” balance sheet. I say again, the banks must be forecasting seriously reduced economic activity, and I don’t want to say it ten times because I will become married to the thesis. The charts on banks and bonds look terrible. I keep looking for bottoms in the banks and I’m just not seeing any, even US regionals....who presumably aren’t invested in Russian trash. (KRE)
And the Enemy Media is doing the exact OPPOSITE these days, telling us that Brandon’s got the BEST economy in decades!
*SNORT*
And the idiots will believe THAT, too!
Note to self: Always, ALWAYS believe your own lyin’ eyes over anything you’re being ‘told.’
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