Half of America’s banks are potentially insolvent – this is how a credit crunch begins

[1srelluc]

Half of America’s banks are potentially insolvent – this is how a credit crunch begins

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.

finance.yahoo.com

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 are already burning through their capital buffers. 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.”

The full shock of monetary tightening by the Fed has yet to hit. A great edifice of debt faces a refinancing cliff-edge over the next six quarters. Only then will we learn whether the US financial system can safely deflate the excess leverage induced by extreme monetary stimulus during the pandemic.

Blah.....That's just a side effect of “the best economy ever”.....Am I right?

All those cheap 2-3% loans are going to kill a lot of banks now that rates have doubled or tripled.

I'd like to think, even though it is entirely pie in the sky, that the fed is going to hold rates or even drop them to try and stabilize banks and get money flowing again.

That said with the jobs report today I'm not really seeing that happening.

I think we are just fucked.

 

[Votto]

Well this should not surprise anyone since Trump is still alive

Oh, that and the DNC still has an opposition party, so those things are to blame.

Besides, January 6th.

Dictatorial Socialism anyone?

 

[1srelluc]

Well this should not surprise anyone since Trump is still alive

Oh, that and the DNC still has an opposition party, so those things are to blame.

Besides, January 6th.

Dictatorial Socialism anyone?

Idiosyncratic......That must be like how that transitory inflation was peculiar in it's persistence.

 

[Votto]

The real problem here is, the banking system is not woke enough.

They still have systemic racism and allow some free trade.

This is why they are failing.

 

[luiza]

The real problem here is, the banking system is not woke enough.

They still have systemic racism and allow some free trade.

This is why they are failing.

Nothing to do with the banks being run by the Deep State for their own interests and no others?
They are failing because they are now obliged to -- they scam people like you by telling you that it will be a Great Reset.
And it will be .
Devaluing and re-setting your cash and assets by even up to 80% .

Now you see them . Now they have gone.

 

[22lcidw]

Nothing to do with the banks being run by the Deep State for their own interests and no others?
They are failing because they are now obliged to -- they scam people like you by telling you that it will be a Great Reset.
And it will be .
Devaluing and re-setting your cash and assets by even up to 80% .

Now you see them . Now they have gone.

I would never believe that this would be possible in my lifetime. We had some warnings, but to no avail. Perhaps we kept interest rates artificially low for too many years to appease everyone with a skittish economy.