First Republic Bank failure?
Three banks in a few months. I have no idea about the fundamentals of banking system. But having three banks going down, does seem abnormal. Are we really in a normal, ok economy that Fed and CNBC try to show? Or something is really off? I feel really uneasy. If you have expertise, please provide as much details as you can. Thanks.
The government and government adjacent institutions would never lie. Everything is okay, just keep buying in and propping up the 100% healthy economy.
I am not a expert on this but this is what I know. The fed hikes from near zero to current near 5 percent has been unprecedented in history. This caught many parts of the economy by surprise and hence some risk assets cratered including growth stocks Banks operate in many ways like normal businesses where you try to balance your assets and liabilities. Most of the banking system takes the deposits that individuals and companies deposit and loans it out for mortgages, small business loans etc.A good chunk is also invested in instruments like bonds which are great investments in normal times However due to rapid interest rate hikes, the bond market has been very volatile so bonds that were bought about 1-2 years have lost some value. This is usually not a problem as these are long term and if held to maturity they usually tend to recover and also make good yields However, this becomes a big problem if people lose confidence and try to withdraw money as the bank has to sell the investments in a loss to pay back the depositor. This becomes untenable when lot of people start withdrawing Why is the market still ok inspite of three banks going down ? One reason is that these are special type of banks which had high exposure to high networth investments - SVB had a lot of VC, startup money while First Republic dealt with large jumbo mortgages. They also had less regulatory oversight The bigger banks especially the Top 4 are very highly regulated after 2008 and their risk exposure to investments, loan to deposit ratios are very different from these banks. Due to deposit flows, they are infact now stronger than ever In some ways, this is like Big Tech getting bigger while small tech is getting clobbered by the market. This is the market's take. However there is the possibility that things may be more widespread and if that is the case, the Fed tightening will stop soon
Panic people yanked 100 billion out of first republic bank. No bank but the very big ones can provide that much liquidity without selling assets (realizing losses). All those failed banks were induced by bank runs.
MCB and PACW are next
We’re going into a recession but we’re already in a tech recession. Save up now. Don’t go spending lavishly.
Normal? NORMAL economy??? Folks i have been telling you. The crash will go into the history books to write about for a thousand years!! Great Depression is going to pale in comparison. Banking system is insolvent including the FED itself. They bought all the junk and they are all left holding the bag. Good luck to you all. The world built on the fake 0% interest and free money is crumbling. Centrally managed economy that ignored free market principles will collapse and burn. A new world will be built. Meanwhile SWE will deliver pizza to get by in the Bay Area!
You are witnessing the death of a fiat currency. Very few people in America understand what this means. The handlers will most likely try to cover the USD’s demise with war, turn citizens against each other, US debt default and hyperinflation….or all four. Ask yourself, why are central bankers purchasing large quantities of gold but telling everyone that everything is fine (as central banks rapidly raise interest rates)?
You vill own nothing and you vill eet ze bugs
Every time The Fed has said “Soft Landing” prior to a Recession, we’ve had a disaster. Look it up. We are in a Recession. Its just been heavily delayed to reduce the severity, but you can only hold out for so long. For anyone who doesn’t think otherwise here you go. That HOPE Index is the truth (Housing, Orders, Profits, Employment) is the https://youtu.be/yVOQLbq3zqQ
but if I recall correctly these two guys have been saying recessions and housing will collapse for almost 3 years. Am I right?
Well it’s right on time, don’t you think? It’s basically three years as of 12/2023. Everyone predicted inflation and a Recession. You can’t give out money like this and expect nothing to blow up. Instead of people making the right financial decisions, they didn’t. So now we need a forceful correction. Remember this: - The only way people learn is through consequences or embarrassment.