Like I said...
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***OFFICIAL*** Bank Failure/Crisis Thread (1 Viewer)
- Thread starter whoknew
- Start date
Snoopy
Footballguy
Bank in Kansas failure: https://www.cnn.com/2023/07/28/business/heartland-tristate-bank-failure/index.html
Chadstroma
Footballguy
This is more of your run of the mill bank failure than anything. The most noteworthy thing about it is that it has been some time since First Republic failed which indicates that the 'system' is fine though it doesn't mean other banks could not still fail with similar issues as First Republic and Signature etc.
Orange&Blue
Footballguy
We bought our house in 2012 that was built in 2002. It is 3k square feet. I'm seeing houses 1/2 the size selling for more than what we bought our house for. wages have not doubled in 11 years but interest rates certainly have.
how are people affording this? even if not buying the rental market is seeing similar increases.
how are people affording this? even if not buying the rental market is seeing similar increases.
bigbottom
I put on my robe and wizard hat
Low inventory? Year over year sales are down 19%
Orange&Blue
Footballguy
i guess... I'm not a real estate expert. just astonished at these housing prices.
LawFitz
Footballguy
Every investible asset class, except for gold and silver (if you still believe in barbarous relics) has been wildly overvalued for years and continues to get moreso (except maybe Bitcoin, which is a bunch of WTF knows), unless you buy into a coming hyperinflationary tsunami without a preliminary deflationary wave/moment, a la 2007-09. Personally betting on both with a barbell portfolio, which helps me sleep at night, except when I compare returns with the now typical YOLO 100% stonks strategy many/most seem to be following.
Lots of compelling and competing arguments abound from currently being in pre-Weimar to the opposite, an ongoing, multidecade collapse of the Eurodollar system, to a simultaneous competing combo of both.
I will say that if there is a wider-ranging banking collapse building due to the rapid increase in interest rates (in relative, not nomimal terms), we could easily still be in the storm's eye. Look at every other major economic collapse and you'll find most took years, not months, weeks or days to find the nadir. My $12 breakfast burrito says the Fed can't act without impunity this go round. Will be interesting seeing what's what in due Time and Space.
Lots of compelling and competing arguments abound from currently being in pre-Weimar to the opposite, an ongoing, multidecade collapse of the Eurodollar system, to a simultaneous competing combo of both.
I will say that if there is a wider-ranging banking collapse building due to the rapid increase in interest rates (in relative, not nomimal terms), we could easily still be in the storm's eye. Look at every other major economic collapse and you'll find most took years, not months, weeks or days to find the nadir. My $12 breakfast burrito says the Fed can't act without impunity this go round. Will be interesting seeing what's what in due Time and Space.
Chadstroma
Footballguy
At the end of 2022, credit card debt was up 18.5% YOY.
The Z Machine
Footballguy
What's your speculation here? People are using CC debt to conserve cash for the down payment?
The Z Machine
Footballguy
I think it's more likely that consumers paid down a lot of CC debt when they had stimmy bucks, interest rates were low so people did cash out refis, wages grew faster than inflation for once (in 2021 and early 2022).
Orange&Blue
Footballguy
I'd like to see how it compares to pre-Covid
Chadstroma
Footballguy
Costs are up with housing and everything else. For many Americans, there is no room for error. Their budgets are maxed and they easily run into the red with the smallest bump in the road while they have no savings or retirement as well. Renters are the people that this all hits harder as homeowners are largely insulated from inflation (though HOI has gone up significantly and taxes tend to increase as well) . Being a mortgage lender and one that does a lot of financial education to try to help people move from being renters to being FTHB (such as a Facebook group with 10K people in it centered around improving credit and most are hopeful FTHB) I hear it a lot. Inflation impacts lower income earners much harder than it does affluent. It really does come down to increasing credit card balance because there is literally no other way to buy groceries that month. On top of that, credit card rates are tied into the Fed Funds rate and have all risen greatly. Americans are hurting. The media just doesn't care to report it because it doesn't fit their agenda right now so most Americans don't know if they don't live it. But if you are paying attention to the data or are on the frontlines... you see it.
Chadstroma
Footballguy
Chadstroma
Footballguy
How much pain could commercial real estate heap on U.S. banks and the economy? A lot.
U.S. banks' market value of assets is about $2.2 trillion lower than suggested by their book-value accounting for loan portfolios held to maturity.
www.marketwatch.com
rockaction
Footballguy
Do your duty and drive to work to commute to computers in lovely, lavish commercial real estate.
Hooo boy. The reverse Industrial Revolution happened while we blinked.
Hooo boy. The reverse Industrial Revolution happened while we blinked.
Stoneworker
Footballguy
Moody's Investors Service cut the credit ratings of 10 U.S. regional banks and said it was reviewing the ratings of six other institutions, pointing to lower profits and higher funding costs.
Moody's is reviewing its ratings on six others, including Bank of New York Mellon (BK), Northern Trust (NTRS), State Street (STT) and US Bancorp (USB), and has assigned a negative outlook to 11 more lenders.
The Moody's action suggests the U.S. banking sector remains vulnerable to the problems that stirred a banking panic and brought down several smaller lenders, including Silicon Valley Bank, earlier this year. Those challenges include devalued bonds, jittery investors, customer-deposit withdrawals and higher funding costs.
The Federal Reserve's campaign to lift interest rates to combat inflation "continues to have a material impact on the US banking system's funding and its economic capital," Moody's said.
Meanwhile, customers have been shifting cash into accounts that pay higher interest, driving up banks' costs and eroding their profitability. "There remains a significant risk that systemwide deposits will resume their decline in coming quarters," Moody's said.
The ratings firm also pointed to the prospect of a recession in early 2024 eroding demand for loans and leading to loan defaults. And it said banks could be hit by problems in commercial real estate, including higher interest rates, vacant offices due to the shift toward remote work, and reduced availability of credit.
Moody's downgraded the following banks:
Commerce Bancshares (CBSH)
BOK Financial (BOKF)
M&T Bank (MTB)
Old National Bancorp (ONB)
Prosperity Bancshares (PB)
Amarillo National Bancorp
Webster Financial (WBS)
Fulton Financial (FULT)
Pinnacle Financial Partners (PNFP)
Associated Banc-Corp (ASB)
Moody's is reviewing its ratings on six others, including Bank of New York Mellon (BK), Northern Trust (NTRS), State Street (STT) and US Bancorp (USB), and has assigned a negative outlook to 11 more lenders.
The Moody's action suggests the U.S. banking sector remains vulnerable to the problems that stirred a banking panic and brought down several smaller lenders, including Silicon Valley Bank, earlier this year. Those challenges include devalued bonds, jittery investors, customer-deposit withdrawals and higher funding costs.
The Federal Reserve's campaign to lift interest rates to combat inflation "continues to have a material impact on the US banking system's funding and its economic capital," Moody's said.
Meanwhile, customers have been shifting cash into accounts that pay higher interest, driving up banks' costs and eroding their profitability. "There remains a significant risk that systemwide deposits will resume their decline in coming quarters," Moody's said.
The ratings firm also pointed to the prospect of a recession in early 2024 eroding demand for loans and leading to loan defaults. And it said banks could be hit by problems in commercial real estate, including higher interest rates, vacant offices due to the shift toward remote work, and reduced availability of credit.
Moody's downgraded the following banks:
Commerce Bancshares (CBSH)
BOK Financial (BOKF)
M&T Bank (MTB)
Old National Bancorp (ONB)
Prosperity Bancshares (PB)
Amarillo National Bancorp
Webster Financial (WBS)
Fulton Financial (FULT)
Pinnacle Financial Partners (PNFP)
Associated Banc-Corp (ASB)
