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re: 63 banks on the brink of insolvency according to the FDIC
Posted on 6/4/24 at 1:28 pm to LSURussian
Posted on 6/4/24 at 1:28 pm to LSURussian
30 year rate was lower a couple of years ago.
1
Posted on 6/4/24 at 1:30 pm to stout
quote:
Rates have dropped but remember the Fed indicated at least 3 rate cuts this year. Do you still see that happening?
Personally, no. But it has to happen eventually.
As long as banks don’t start panick-selling bonds and MBS, those unrealized losses will never be realized.
This post was edited on 6/4/24 at 1:31 pm
Posted on 6/4/24 at 1:32 pm to Dadren
quote:
As long as banks don’t start panick-selling bonds and MBS, those unrealized losses will never be realized.
They are forced to sell if their depositors jump ship to another bank. Which is exactly why Silicon Valley Bank failed in the last few years, as their assets were showing unrealized losses and couldn’t liquidate enough to pay off the depositors.
Posted on 6/4/24 at 1:40 pm to stout
quote:I don't recall the Fed ever saying there would be "at least" 3 Fed funds rate cuts in 2024.
Rates have dropped but remember the Fed indicated at least 3 rate cuts this year.
What I remember is last year the Fed Board forecast 3 rate cuts in 2024 but they added a caveat that any rate decisions would be data dependent.
quote:Fed Fund futures are forecasting higher than 50% probability of two rate cuts before 12/31/24. The first cut is now predicted to occur in September and the second reduction after the Presidential election.
Do you still see that happening?
Posted on 6/4/24 at 1:42 pm to teke184
quote:
They are forced to sell if their depositors jump ship to another bank. Which is exactly why Silicon Valley Bank failed in the last few years, as their assets were showing unrealized losses and couldn’t liquidate enough to pay off the depositors.
SVB was a niche bank whose depositors were almost all tech sector venture capitalists. They might as well have had NPC’s from a 2003 video game as retail customers.
A diversified deposit mix is not just going to simultaneously up and flee a typical bank en masse like they did with SVB.
Posted on 6/4/24 at 1:48 pm to Dadren
quote:
SVB was a niche bank whose depositors were almost all tech sector venture capitalists.
It was a lot deeper than that. They were an incredibly business friendly bank. I've never been in tech VC and had accounts with them and almost all of my clients did. The vast majority of those client accounts were for payroll and other normal business functions. They were the go-to bank for VC bros but they had a ton of other business as well that was put at risk.
This post was edited on 6/4/24 at 1:54 pm
Posted on 6/4/24 at 2:01 pm to PUB
quote:Okay but how does Yellen "refinance" those bonds at a lower rate?
30 year rate was lower a couple of years ago.
That's my question when you wrote, "Yellen messed up when al the long-term debt was not "refinanced"..."
Posted on 6/4/24 at 2:28 pm to stout
Meh, I remember the 1980's and Resolution Trust set up which forced banks to close if they didn't match the formula mandated. The banks forced to close (including S&L's) had investments such as loaning money to contractors, oil/gas drilling and production, and even retail businesses which had never ever missed a payment as not meeting their criteria of safe loans.
In Lake Chuck, Earl Barger who owned Barger's Drugstore was a casualty. He was forced into bankruptcy as a result of never being a minute late on payments.
In Lake Chuck, Earl Barger who owned Barger's Drugstore was a casualty. He was forced into bankruptcy as a result of never being a minute late on payments.
Posted on 6/4/24 at 2:52 pm to stout
quote:
primarily due to higher mortgage rates affecting residential mortgage-backed securities
Maybe if we crash the economy 3 or 4 more times with this shite, we'll figure out it's a bad idea
Posted on 6/4/24 at 3:54 pm to Sheep
quote:quote:
primarily due to higher mortgage rates affecting residential mortgage-backed securities
Maybe if we crash the economy 3 or 4 more times with this shite, we'll figure out it's a bad idea
If you live in the middle of nowhere, or in a place that is prone to natural disasters (like a lot of posters here), getting a home loan at a rate that isn’t absolutely obscene is going to be difficult if not impossible without a way for local lenders to offload that risk. That’s what MBS does.
It’s simply a tool, like a kitchen blender. It can help you do cool things in your kitchen, but if you’re reckless you can lose some fingers. So the key is to not be reckless.
Posted on 6/4/24 at 4:07 pm to RunninReb
quote:Rinky Dinks are on every corner in little podunk towns all over the country.
63 isn't an alarming figure when you think of how many rinky dink banks there are just in Louisiana..
I will not feel bad for any banks that fail that were chasing shady real estate financings in order to keep up appearances within their local communities.
"People's Bank of ______" exists for a town of 5,000-10,000 residents. "Farmers Bank & Trust", "River Bank & Trust" are all over the place.
Posted on 6/4/24 at 4:11 pm to stout
A lot of Spirit Halloween Stores are gonna be popping up here shortly
Posted on 6/4/24 at 4:13 pm to RogerTheShrubber
quote:
Let it fail.
People need hard lessons
I honestly think we need it to go backwards so that we can go forward the right way....... if that makes any sense.
Posted on 6/4/24 at 4:24 pm to LSURussian
Posted on 6/4/24 at 4:27 pm to stout
quote:
Fed indicated at least 3 rate cuts this year. Do you still see that happening?
Maybe. If this Fridays BLS is as dogshite as the last one or whay Jolts is indicating and the Unemployment rate goes up to 4% then i think a .5 in Sept could be on the table right in time for the election
Posted on 6/4/24 at 5:17 pm to SDVTiger
quote:
Maybe. If this Fridays BLS is as dogshite as the last one or whay Jolts is indicating and the Unemployment rate goes up to 4% then i think a .5 in Sept could be on the table right in time for the election
Don’t know if it’s true, but I am seeing indications that the job numbers over the past year or so have been massively overstated via the birth-death adjustment. If that turns out to be the case then. It could have them scrambling to cut. Guess we’ll have to see.
This post was edited on 6/4/24 at 5:34 pm
Posted on 6/4/24 at 5:34 pm to LSUSkip
quote:
I honestly think we need it to go backwards so that we can go forward the right way.....
I agree. I'm fine with taking a step or three back.
Posted on 6/4/24 at 6:29 pm to PUB
There is nothing in the article you linked which mentions Yellen "refinancing" the U.S. debt. It only talks about how she could have issued longer term new debt.
If you don't know how she could have "refinanced" debt just say so. Thanks.
If you don't know how she could have "refinanced" debt just say so. Thanks.
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