Posted on 08/15/2023 4:10:08 AM PDT by RomanSoldier19
A Fitch Ratings analyst warned that the U.S. banking industry has inched closer to another source of turbulence — the risk of sweeping rating downgrades on dozens of U.S. banks that could even include the likes of JPMorgan Chase .
The ratings agency cut its assessment of the industry’s health in June, a move that analyst Chris Wolfe said went largely unnoticed because it didn’t trigger downgrades on banks.
(Excerpt) Read more at cnbc.com ...
“Sweeping rating downgrades on dozens of U.S. banks is evidence of just how strong the economy is under Joe Biden.”
— The Media
LOL. Yep, you nailed it.
Except Joe himself will spout that nonsense as will Yellen.
Could just be a coincidence, but they're big into ESG and DEI. Maybe they should stop wasting money and refocus their attention.
ESG and DEI is a cancer and they know it
Michael Burry just made a $1.6 billion dollar bet on shorts.
What a stupid article, based on a stupid false premise.
But it got clicks. Because that’s all that matters.
For those of us who haven’t surrendered our brain to despair yet, here’s the linchpin: “The problem created by another downgrade to A+ is that the industry’s score would then be lower than some of its top-rated lenders. The country’s two largest banks by assets, JPMorgan and Bank of America, would likely be cut to A+ from AA- in this scenario, since banks can’t be rated higher than the environment in which they operate.”
The capping of any firm’s ordinal measure of credit risk at that of the operating environment is a Rule. It’s not math. To wit: countries have defaulted on their sovereign debt, but that didn’t translate into every in-country bank or business also failing.
The practice of “capping at the sovereign” is a simple, neat and wrong practice. To be sure, it is a nice theory, and it makes life really simple for the scores of people who deal with ordinal credit ratings.
But just because Fitch wakes up one morning, and downgrades their opinion of the operating environment, that doesn’t mean that, overnight, the default potential of all banks have increased.
Again, a façile fear-pr0n article designed to scare people. And get clicks. All that is missing is a snake oil salesman pushing gold bullion and accepting “Worthless” fiat currency as payment.
You're a Stacker, pick one:
Burry must see some event or two unfolding.
It is curious that the Russian Ruble has gone up to a hundred per dollar in the past week. Also, if you notice real estate action, Zillow came up this week and said it was ending ‘house-flipping’ segment that it was engaged upon. Zillow said that whatever algorithm they had....was in failure mode.
I would suggest a different type of 2008 experience is about to occur, where banks shut down loans in a harsh manner...for both personal and commercial situations.
Go look at property insurance problems in both California/Florida. Lot of turmoil presently going on.
It is worthless, by 97% since 1913
. Fiat currency is not money, it is debt. Borrowed from the FED, and interest owed from the gitgo.
I’d take the silver.
As I hope most of us would.
What if manipulating people and crashing the economy is the plan?
Fear is a useful tool.
The Phoenix rises from the ashes…
well yeah
that is the natural order of things whenever a nation becomes a banana republic
a cup of wheat for a day’s wages
Have you seen this video yet? https://www.youtube.com/watch?v=bYhTFz_SGw0
I agree that a bank downgrade does not mean the sky is falling. As you noted, any such event must be taken in context. It’s just something to note. No need to panic and head for the hills.
However, I am in favor of any article that makes Biden’s economy look bad.
Thanks for the heads up.
Yep, I have. Mark Dice is great.
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