Next banking crisis is already well underway

[Paladin]

FDIC Press Release: Wednesday, November 29, 2023

Unrealized Losses on Securities Increased From the Prior Quarter: Unrealized losses on securities totaled $683.9 billion in the third quarter, up $125.5 billion (22.5 percent) from the prior quarter. Unrealized losses on held-to-maturity securities totaled $390.5 billion in the third quarter, while unrealized losses on available-for-sale securities totaled $293.5 billion.

As unrealized losses they make the headline numbers look much better than they actually are. When these losses become realized losses the headlines are gonna look pretty ugly.

[philip964]

Not sure if related but Gold hit a record high of around $2100.
While Bitcoin is back above $40,000.

The pundits seem to think an interest rate decline is coming from the fed.

The stock market is the highest it’s been for a while.

Oil is down.

Is the market factoring Trump will win next year?

There are very few houses for sale. Prices are higher despite the much higher cost of borrowing. Housing had a big run up while interest rates were low as borrowers could afford more.

I can’t make any sense of it. Glad I don’t have too.

[powerboatr]

we have a good number of homes and lots for sale here... but prices are still IMO over inflated.
we are looking at selling and getting a smaller place and a live aboard boat

[Paladin]

Bank Failures in Brief – 2023 shows 5 bank failures so far. 3 large ones.

This is putting pressure on the financial institutions: United States Fed Funds Interest Rate

The Federal Reserve kept the target range for the federal funds rate at its 22-year high of 5.25%-5.5% for a second consecutive time in November

Backing away from record low interest rates and trillions of printed money are like an alcoholic trying to quit drinking. Withdrawal and a massive hangover are inevitable.

[Grayling813]

Banking "Crisis" may well be spelled "collapse" this time. Unless CONgress decides to throw trillions more tax dollars at rescuing the banks again. You know, because the bankers learned so much from the last time they had to be bailed out.
If I had significant cash in the bank right now I'd be pulling it out and converting to physical gold/silver.

[clarionite]

Not sure if related but Gold hit a record high of around $2100.
While Bitcoin is back above $40,000.

The pundits seem to think an interest rate decline is coming from the fed.

The stock market is the highest it’s been for a while.

Oil is down.

Is the market factoring Trump will win next year?

There are very few houses for sale. Prices are higher despite the much higher cost of borrowing. Housing had a big run up while interest rates were low as borrowers could afford more.

I can’t make any sense of it. Glad I don’t have too.

I've been looking for acreage for retirement. I found some I like. But when I looked into the rates... I decided I'll wait for a while. I'll either sell my house and pay cash for the land or buy when the rates come back down.

[Paladin]

Banks Terminate 60,000 Workers In One Of The Bleakest Years For The Industry Since 2008

A new report from the Financial Times shows twenty of the world's largest banks slashed 61,905 jobs in 2023, a move to protect profit margins in a period of high interest rates amid a slump in dealmaking and equity and debt sales. This compared with the 140,000 lost during the GFC of 2007-08.

"There is no stability, no investment, no growth in most banks — and there are likely to be more job cuts," said Lee Thacker, owner of financial services headhunting firm Silvermine Partners.

FT noted that corporate disclosure data and its independent reporting did not include smaller regional bank cuts, indicating total job loss could be much higher.

Clear case of Bidenomics.

[surprise_i'm_armed]

Another angle to consider, with regard to banking issues, is the high and rising number of vehicle loan defaults.

People who thought nothing of taking out 6,7,8 year loans on their largest depreciating item (vehicle) are now getting their vehicles repo'd.

Repo men have the philosophy "No metal, no money", so they have to take risks to snatch vehicles for the lenders. The average lender will pay $400 to get a vehicle back. There are more vehicles that need to be repo'd, than there are repo men available. Banks are having to pay premiums to get to the top of the repo company "to snatch" list.

Many repo'd vehicles are damaged, and don't bring much at the auction. So the banks are losing on multiple fronts.

Have you ever thought about motorcycle repos? Bikes can't be snatched as easily as cars, plus they are smaller, and easier to hide. If the bike's semi-owner doesn't agree to give it to the repo man, the bike remains in the deadbeats possession. Harley Davidson has little option to repo the bike.

LTV = Loan to value. When the covid19 relief checks were flowing, banks were allowing loans where LTV was >100% of the vehicles value. Now both the borrower and the lender are upside down in this current world.

SIA

[Grayling813]

Banks Terminate 60,000 Workers In One Of The Bleakest Years For The Industry Since 2008

A new report from the Financial Times shows twenty of the world's largest banks slashed 61,905 jobs in 2023, a move to protect profit margins in a period of high interest rates amid a slump in dealmaking and equity and debt sales. This compared with the 140,000 lost during the GFC of 2007-08.

"There is no stability, no investment, no growth in most banks — and there are likely to be more job cuts," said Lee Thacker, owner of financial services headhunting firm Silvermine Partners.

FT noted that corporate disclosure data and its independent reporting did not include smaller regional bank cuts, indicating total job loss could be much higher.

Clear case of Bidenomics.

G.W. Bush and CONgress bailed out the financial sector in 2008, ensuring most of the guilty continued on without sacrifice or paying the consequences to bring them back to the brink of collapse today.

Is it just coincidence that CONgress is full of multi-millionaires?

[Rafe]

Another angle to consider, with regard to banking issues, is the high and rising number of vehicle loan defaults.

And not just vehicle loans. My wife has a friend whose daughter is what I guess you'd call a "recovery agent." She's not real estate licensed--evidently you don't need to be for this--and what she does is help families whose houses have gone into foreclosure recover the balances owed them after the house sells at auction; she keeps a percentage of that recovery as her fee. I wondered if that was really a valid job niche. As a response, my wife told me yesterday that the woman had, this week alone, targeted a total of 54 new foreclosures as sales leads in a 2-mile radius in the Copperfield Area, just about 10 miles from we live.

That number in a limited area in a decent part of town shocked me. I gather what's happening is a compound effect of residual COVID-shutdown employment difficulties, high inflation, high interest rates, and little available cash (and probably declining credit ratings) on the part of any potential buyers. In other words, it isn't like the Obama recession where banks were giving people loans that left them upside down in their houses with high adjustable mortgage rates, but that Bidenomics and big increases in insurance and other costs are at a tipping point for more families who were making ends meet when Uncle Joe took office, and now can't balance the monthly books, have driven up their credit card debt, and can't find any buyers out there for their homes.

Dunno if this is an actual trend, but it seems logical that it could be. We all know the unemployment numbers are a false indicator when it comes to under-employment, and that the base inflation rate is also bogus when you look at the real-world value of a dollar. The cumulative rate of inflation since just 2020 is 18.6% (https://www.usinflationcalculator.com/), but the administration never talks about the cumulative effects, only how inflation markers are doing since the previous ones...so long as they paint the president and the Fed in a good light. But today, you have to spend $1.19 to buy the same stuff as you did for $1 at the end of 2020.

In the past decade, the cumulative inflation effect has been 31.8%. So just to keep up and break even, someone earning $60K a year in 2013 would have to be making $79,080 today. From 2013 through Biden's inauguration, cumulative inflation was 13.2%. So he's managed to add 18.6% to that in just three years. We may be in for a bumpy ride; I doubt there'll be a quick recovery from this.

[Paladin]

Banks Terminate 60,000 Workers In One Of The Bleakest Years For The Industry Since 2008

A new report from the Financial Times shows twenty of the world's largest banks slashed 61,905 jobs in 2023, a move to protect profit margins in a period of high interest rates amid a slump in dealmaking and equity and debt sales. This compared with the 140,000 lost during the GFC of 2007-08.

"There is no stability, no investment, no growth in most banks — and there are likely to be more job cuts," said Lee Thacker, owner of financial services headhunting firm Silvermine Partners.

FT noted that corporate disclosure data and its independent reporting did not include smaller regional bank cuts, indicating total job loss could be much higher.

Clear case of Bidenomics.

G.W. Bush and CONgress bailed out the financial sector in 2008, ensuring most of the guilty continued on without sacrifice or paying the consequences to bring them back to the brink of collapse today.

Is it just coincidence that CONgress is full of multi-millionaires?

The briefcases and suitcases full of cash do help their net worth.

Not from people I like, but it is true:
Senator Durbin declared that banks "frankly own the place."

[surprise_i'm_armed]

"Banksters" - The correct term for those who run banks, but whose policies hurt us.

https://genius.com/Todd-snider-new-york-banker-lyrics

The above link is to the song lyrics of a song sung by Todd Snider, entitled "New York Banker".
It details an all-too-familiar story about how big time bankers screw the working person.

Reading the lyrics will give you an idea of the content, but listening to it on Youtube, or somesuch, will make a better impression on you.

SIA

[Paladin]

"It's All Over": Powell's WSJ Mouthpiece And JPMorgan Confirm Imminent End Of QT

Bottom line: after several years of tightening, 2024 is when the liquidity floodgate reopen and not only does the Fed start to cut rates aggressively, but with QT tapering, we fully expect the next QE to be launched in the near future

[Paladin]

Calling CRE ‘Manageable’ Is Just Wishful Thinking: Macro View


Policymakers calling the roughly $1 trillion of commercial real estate debt coming due this year “manageable” may regret it. If defaults topple hundreds of US banks — as the pessimists predict — the impact on markets and the economy will be tumultuous.
The commercial real estate debacle is only expected to escalate. Asked whether the stress will worsen and hurt banks over the next 12 months, about three quarters of respondents to a recent MLIV Pulse survey said yes.
According to the Mortgage Bankers Association, there’s $929 billion — 20% of the $4.7 trillion total — in commercial ...

The Meltdown of Commercial Real Estate

When the Fed panic-hiked interest rates in the 2021 inflation, that put trillions of commercial real estate underwater even without other factors. Add to that crime, inflation, plus remote work, and you have a dangerous mix that could toppled cities as we know them.

This could mimic and elaborate upon last year’s bank crisis, where falling bond prices panicked depositors. That crisis only stopped when Treasury Secretary Janet Yellen and Fed Chairman Jerome Powell effectively bailed out every bank in America with sweetheart loans written on fictitious asset values along with unlimited taxpayer guarantees through the comically underfunded FDIC....

Without those government pre-bailouts, one paper last year by researchers at Stanford and Columbia estimated that 1,619 US banks – about a third of them – could be at risk of failure.

[Rafe]

Anybody know how to buy actual, physical gold and silver with the least possible coinage/commission overhead?