US Banking Crises

[Roses In The Vineyard]

Not sure if anyone here has kept up lately but anyway there is some bad vibes with this. So in short two banks have failed only days apart with one being the second largest bank failure in US history. Should this be systemic and the crap starts hitting the fan it will be a wild ride for everyone with all the usual problems such as not getting paid on time or not being able to make withdrawals etc. At worst this could be a global problem before long.

One can keep track of any future failures here.

https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/

Some context

 

[Roses In The Vineyard]

 

[aeon]

And why did Silicon Valley Bank go? Mortgage securities...hello 2008 all over again.

They didn’t listen then, they won’t now.

Disgusted,
Ian

 

[Roses In The Vineyard]

To keep it short.

The bond market is crashing, Credit Suisse is likely the next to fail, systemic risk to Japan.

 

[Roses In The Vineyard]

Just looking around reddit and found this.

US banks sitting on $620 billion in unrealized losses.
https://www.cnn.com/2023/03/12/investing/stocks-week-ahead/index.html

 

[Roses In The Vineyard]

Meme post

 

[Roses In The Vineyard]

 

[Roses In The Vineyard]

Theme of the day

 

[Roses In The Vineyard]

 

[aeon]

 

[Faye]

And why did Silicon Valley Bank go? Mortgage securities...hello 2008 all over again.

They didn’t listen then, they won’t now.

Disgusted,
Ian

My understanding is that many of the same structural issues in place then are around now. Aspects of the Dodd-Frank act were rolled back by the passing of EGRRCPA (signed by Trump).

Its frustrating to see them find money for this but not student loan forgiveness or a host of other things.

 

[aeon]

My understanding is that many of the same structural issues in place then are around now. Aspects of the Dodd-Frank act were rolled back by the passing of EGRRCPA (signed by Trump).

My understanding is that your understanding is correct.

Sigh,
Ian

 

[Asa]

Yeah, this is giving me major anxiety.

 

[Matty]

Yeah, this is giving me major anxiety.

Don't let some dollars and cents make you anxious.
Sometimes life is a bit easier, other times it's a bit more difficult. Either way has its own joys and beauties.

 

[Asa]

Don't let some dollars and cents make you anxious.
Sometimes life is a bit easier, other times it's a bit more difficult. Either way has its own joys and beauties.

I agree, Matty, and thanks for the reality slap. (I have some anxiety about the collapse of society happening when I'm too old to be fully independent or a badass warrior.)

 

[philostam]

Probability of bank runs has increased with technology. It's one thing when you had to go to a bank in person, sign a bunch of documents and withdraw your money. It's another when you can do it pretty much 24/7 from your home. Social media also amplifies the panic.

I don't think, from what I dived in, this is as bad as 2007. Yeah banks are sitting on big unrealized losses on their long term treasuries, but they introduced this new facility at the FED where banks can redeem treasuries at par, meaning not at a loss. It's basically just a different word for money/credit creation.

2007 was more about banks giving out bad loans which were defaulted upon. This is all about interest rates going up too much too fast.

Worst case scenario we get another Covid style liquidity bazooka. You will not lose your deposits, but you might get 30% inflation y/y. Also not insignificant probability of much higher inflation, if trust in the FED is completely gone.

 

[Roses In The Vineyard]

 

[philostam]

Meanwhile Bitcoin absolutely outperformed any other asset over last week. Up literally 40% in the last 7 days.

Market risk is not the same as counter party risk. Even gold was "volatile" when Wiemar republic hyper-inflated...

 

[aeon]

 

[Roses In The Vineyard]

The system has always been broken by designed as it was never meant to last but more or less to deprive the populations of their wealth and ultimately their rights. It won't be long before we all get to see the demise of this system and its replacement that will not only be every bit as cruel as the old but more so even worse.