POWELL: U.S. BANKING SYSTEM IS SOUND AND RESILIENT
Narrator: we just had over half a trillion $ in bank failures in the past month
pic.twitter.com/YvhloFIGIX — zerohedge (@zerohedge) May 3, 2023
Posted on 05/03/2023 8:28:50 PM PDT by SeekAndFind
Earlier today, when Jerome Powell openly lied to the American People during the FOMC press conference stating without a hint of irony that the US banking system is "sound and resilient"...
Federal Reserve Chair Jerome Powell says that "the US banking system is sound and resilient."
What do you think? 🤔pic.twitter.com/qDktlpOln4 — Human Events (@HumanEvents) May 3, 2023
...we balked: how could this former lawyer lie so brazenly to the American people, the narrator wondered, when in just the past few weeks we had seen over half a trillion in bank failures, making the current bank failure episode even worse than the global financial crisis?
POWELL: U.S. BANKING SYSTEM IS SOUND AND RESILIENT
Narrator: we just had over half a trillion $ in bank failures in the past month
pic.twitter.com/YvhloFIGIX — zerohedge (@zerohedge) May 3, 2023
Well, as usual, the narrator was right, because while Powell's lies were still ringing in our ears, the next regional bank collapse was on its say.
Shortly after the close, Bloomberg reported that another regional, California-based bank (of course), PacWest Bancorp., was weighing a range of strategic options, including a sale.
The Beverly Hills-based bank - whose financial conditions it appears has been far worse than the Fed, which just hiked another 25bps, thought - has been working with a financial adviser and has also been considering a breakup or a capital raise, according to Bloomberg sources. While it is open to a sale, the company hasn’t started a formal auction process.
According to the report, "an outright sale has been hindered because there aren’t many potential buyers interested in the entire bank, which comprises a community lender called Pacific Western Bank and some commercial and consumer lending businesses, the people said." And similar to SVB and FRC, "a potential buyer would also have to potentially book a big loss marking down some of its loans, the people said."
On Tuesday, PacWest tumbled 28% as investors retreated from regional bank stocks following JPMorgan’s deal on Monday for the failed First Republic Bank, a transaction which did nothing to ease concerns about regional bank viability, which was to be perfectly expected since today's rate hike would only make the regional bank deposit run even bigger, something which was obvious to everyone...
But surely at 5.25% all shall be well https://t.co/VMZbvApokm — zerohedge (@zerohedge) May 2, 2023
... except the Fed!
And sure enough, following the Bloomberg report, PacWest - which had $28 billion in deposits at last check (far less as of this moment) and $44 billion in assets, saw its stock plunge more than 60% after hours...
Bear in mind that just a week ago, PacWest shares surged 17% after the midsize lender said deposits stabilized toward the end of March and rose in April.
“Importantly, deposits stabilized in the latter part of March and rebounded nicely in April, increasing approximately $700 million subsequent to quarter-end,” President and CEO Paul Taylor said in the release
Tonight's dismal news comes six weeks after PacWest said it had shored up its access to cash by raising $1.4bn via a lending facility from Apollo-backed investment firm Atlas SP Partners.
According to its last public statement, PACW had $29 billion in deposits (significantly smaller than SVB and FRC), but more problematically, over three-quarters of its lending is to real estate, and 8% to venture capital (with its VC business representing $6bn in deposits at the end of March).
It seems things 'escalated quickly' since then.
The broad Regional Bank index is tumbling after hours, now at its lowest since Oct 2020...
... and is dragging down other regional banks with it, especially anything with "west" in its name:
Western Alliance is down 30%..
And while we are stunned by this level of Fed incompetence: after all, just hours ago Powell was reassuring everyone that US banks are safe and sound...
This is unprecedented humiliation for the @federalreserve.
Just 2 hours earlier, Powell said US banking system is "sound and resilient", seemingly unaware that yet another of the largest California banks was teetering on the edge.
How is this level of incompetence possible — zerohedge (@zerohedge) May 3, 2023
... not even the Fed will allow this idiocy to continue, and either it will cut rates and inject trillions more in liquidity now that we are clearly at the small bank reserve constraint...
oh the irony: FRC take under by JPM (funded by the FDIC/US taxpayers) drained $75bn in reserves. And we are right back on the reserve constraint critical threshold. Hence the banking crisis is baaaaack
https://t.co/EvbkxvkOct — zerohedge (@zerohedge) May 2, 2023
... or it will have a banking crisis on its hands the likes of which have never before been seen.
Slowly, then all at once.
You are kidding me!??! After the “gifted” buy-out of First Republic Bank (FRC) by JPMorgan (JPM), I was assured by all the economic “experts” that the banking crisis was now over!
Therefore, I was told, I can now invest my hard-earned money in the banking sector once again, as I also move all my banking deposits into a one of the top four national FDIC-insured “safe” banks who are “too big to fail”.
Please tell me I didn’t take financial and investing advice from the wrong experts, again! For I just moved all my assets to PacWest(PACW) and Western Alliance(WAL)!
/s
Wonder why most of these bank failures are happening on the West Coast?
Where are they going to get the money for the promised reparations?
“Slowly, then all at once.”
All at once seems to be arriving rather quickly, doesn’t it
The pace of events is definitely picking up. Most of us aren’t even close to prepared. There’s a whole generation here that I call Generation F*cked. Nothing good lies ahead for them.
This is beginning to look like the economic crisis in 2007-2008.
IIRC, it was in February. I was watching some of the Sunday news-talk programs. I noticed an eerie pattern. Guests on some of those program were from the GWBush economics and commerce sectors. They were all parroting the same theme: ‘The economy is in great shape. The economy is strong.’
I thought it strange that these guys were touting the economy when usually these news-talk programs were about politics and foreign policy.
About 4 months later the GWBush economy began to crash. As with the current economic disaster, they began throwing money at the problem with the multi-billion dollar bail-outs. One was The Emergency Economy Stabilization Act of 2008. [Sort of sounds like Biden’s Inflation Act.]
These bank failures are terrifying!
Perhaps we’d better go to a CBDC so that we can ensure that all of our deposits and banking are guaranteed and safe.
Of course, cash will have to be eliminated. Along with any other forms of cryptocurrency which could be used for crime (some of it is, ransomware, for example, just had a big bust in the ...... Ukraine).
/shiny side out
The Digital Dollar will save us! Yeah, That’s the ticket!
(worth it to watch just the first 17 minutes - there will be no way to “prosper”, though)
The Jim Rickards Commercial
https://www.youtube.com/watch?v=fCfzQNhi_ns
(Google’s YouTube, amazingly, kept popping this up on my recommended playlist on the side - so I finally watched the beginning of it - ignore the sales pitch and watch the first part I recommended above)
[This is beginning to look like the economic crisis in 2007-2008.]
Yep. I’ve been saying that 2008 will return again. Except that it will be worse this time around.
The fake economic power of California is all mortgaged out, and now it’s going to take a serious hit. This is going to be a tough ride, and the Democrats will get slaughtered in 2024 for this. They can’t blame this on Trump.
I seem to recall that Fannie Mae and Freddie Mac were both on the brink until they were bailed out by the Feds. And a lot of the Too Big To Fail banks were saved by TARP.
Not surprising
https://www.pacwest.com/esg-impact
Best Financial advise. Google your bank's name and "ESG"
If they have a page like that, get your money out ASAP
At what point do they call it a contagion?
When it’s too late?
Jonathan Cahn has a video where he said one of our government officials said “to help the economy, have an abortion” or something like that. Cahn didn’t name who said that, though.
https://www.youtube.com/watch?v=HRK5g1pIx-U
I agree with Cahn in the respect that spirits are destroying America (and the world, frankly). Spirit of antichrist and (evil) principalities and powers.
Ephesians 6:12
King James Version
12 For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places.
https://www.biblegateway.com/passage/?search=Ephesians%206%3A12&version=KJV
My first thoughts exactly. How much money were they dumping into this nonsense and how much leveraged to these pathetic things?
I’m 100% for small to medium sized credit unions only. Screw the banks.
There is nothing backing digital currency, they need the cash equivalence to match the deposits.
The graphic should have Fannie and Freddie in their, as well as Citigroup since it was effectively bailed out via a $250bn govt backstop against loan losses.
Adding just those three would make the 2008-2009 downturn waaaay taller AND fatter.
And while we are at it, the 2008-2009 bubbles need to expand by about 55%, to reflect inflation. That will make that cluster of failures WAAAAAAY bigger.
But hey, can’t do that....can’t let things like truth and accuracy get in the way of clicks for Zero Hedge, and then the 2023 economic doomsters won’t get their jollies.
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