g5000
Just to clarify why you're wrong. Based on your last post, I have no expectations you'll understand any of this, but others probably will. Click on images to enlarge.
As shown below, there is solid profitability last quarter, higher net interest margin, offset by lower non interest income, and higher non-interest expenses.
Higher than pre-COVID due to the enormous government spending.
Net interest margins are now higher than pre-COVID. Raising rates have been good for banks. However the deposits are starting to catch, maybe 1-2 quarters before roll-over in NIMs.
Very large non-realized losses that could be realized if the Banks need to raise liquidities.
HOWEVER the reserve coverage has never been better so, so need for liquidity not in the next few quarters. Not in the next 2 quarters?
Reserve ratios are super high. Stress in banks = ZERO, no need to rely on interbanking if you have so much reserves.
There are not many banks with problems, since all the crap they hold has been moved to the Fed's balance sheet (now the systemic bank- currency pb)
Soooo, where is the problem, exactly?
Inflation. If currency plunges (and is plunging) the worst is cash and long bonds. The commodities do fine. The Equities that rely on leverage and sit at the top of the Maslow scale of consumption suffer, because purchase power of people suffer, that is they can earn more dollars, that is worth much less.
Bottom line, there should be no bailouts. Let them fold. But socialist can't do that, they can't let crisis go to waste. It will be testing ground for all future bank take overs.
www.bankingdive.com
