Posted on 05/02/2023 9:34:54 AM PDT by CFW
The twin crashes in US commercial real estate and the US bond market have collided with $9 trillion uninsured deposits in the American banking system. Such deposits can vanish in an afternoon in the cyber age.
The second and third biggest bank failures in US history have followed in quick succession. The US Treasury and Federal Reserve would like us to believe that they are “idiosyncratic”. That is a dangerous evasion.
Almost half of America’s 4,800 banks have already burned through their capital buffers and are running on negative equity. They may not have to mark all losses to market under US accounting rules but that does not make them solvent. Somebody will take those losses.
“It’s spooky. Thousands of banks are underwater,” said Professor Amit Seru, a banking expert at Stanford University. “Let’s not pretend that this is just about Silicon Valley Bank and First Republic. A lot of the US banking system is potentially insolvent.”
(Excerpt) Read more at finance.yahoo.com ...
They actually did not like it.
Most of the large players are enjoying what is happening. Except for the folks that forgot to buy some rate swaps two years ago when they was CHEAP!!!
Debts need to be cancelled.
Soon.
The world will change dramatically the day Germany changes sides.
You should have seen the balance sheets in the early 1980’s when prime hit 21%. If they have stable funding, like most community banks with core deposits, investment depreciation does not matter much because they have the ability to hold those investments to maturity. The problem with these big banks is that they have a very significant portion of their balance sheets funded with short-term borrowings, some even overnight funding. Allowing the big banks to get bigger and bigger is insanity, putting the whole economy at risk. When I became a bank examiner in 1980, there were over 14,000 banks in this country. There are less than a third of that now. Yeah . . . the big boys know what is best for us . . . .
“You will own nothing and be happy.”
Years (or maybe I should say decades) ago, people learned from history and implemented those lessons into actions going forward. We no longer even study history, much less learn from it. Even the lessons from the housing bubble and bank failures from as recently as 2008 have been ignored and forgotten.
Look at the stock prices today from several regional banks. The banking crisis is not over. Far from it!
And I think this time the banking crisis is being carefully orchestrated to arrive at a certain outcome.
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