Financial Industry 07 (Jul 18 - Dec 24)

[behappyalways]

A Tidal Wave Of Money Leaving Banks Will Kill Profits And Lending
https://www.zerohedge.com/personal-fina ... nd-lending

[behappyalways]

The banks either have to choose losing deposits or lower profitability....

The latest H.8 banking report showed deposits declined $76B the w/e April 12.
The "bank walk" away from low-yielding bank savings accounts is relentless. April 12 deposit outflows were not taxes.
https://twitter.com/biancoresearch/stat ... 6098293760


Lots of Qs about why banks do not raise deposit (savings/checking) rates to compete with market-based rates.

The answer is their assets, loans, and securities have longer maturities (2 to 5 years), so they yield much lower rates, say around 3%, as they were initiated over a year ago when rates were far lower.

Banks also have costs to cover, including loan losses (think commercial real estate) that must be factored into their deposit rates.

https://twitter.com/biancoresearch/stat ... 3848854528

[winston]

Exposing the Bank’s Duration Problem

by Jeff Clark

The banking crisis is NOT over – not even close. Too many banks made too many questionable investments during the “funny money” period of 2021. Those mistakes are slowly being exposed in 2023. And, so far, we’ve only scratched the surface.

U.S. banks have already lost $50 billion in market value over the past two months.

When you have access to other people’s money, you can take “stupid” to a higher level.

At some point, though, as we saw with Silicon Valley Bank, this “duration problem” will be exposed. That won’t be pretty. But, that’s when we’ll reach the end of the banking crisis.

Source: Jeff Clark Trader

https://dailytradealert.com/2023/04/30/ ... n-problem/

[behappyalways]

Large & Small US Banks See Deposit Outflows Continue, Small Bank Lending Growth Tumbled
https://www.zerohedge.com/markets/large ... th-tumbled

[winston]

Half of America’s banks are potentially insolvent – this is how a credit crunch begins

by Ambrose Evans-Pritchard

The twin crashes in US commercial real estate and the US bond market have collided with $9 trillion uninsured deposits in the American banking system. Such deposits can vanish in an afternoon in the cyber age.

Almost half of America’s 4,800 banks are already burning through their capital buffers.

More than 2,315 US banks are currently sitting on assets worth less than their liabilities. The market value of their loan portfolios is $2 trillion lower than the stated book value.

One of the 10 most vulnerable banks is a globally systemic entity with assets of over $1 trillion. Three others are large banks.

We estimate there’s four to five trillion dollars of debt in the commercial (property) sectors, of which about a trillion is maturing in the next 12 to 18 months.

Source: The Telegraph

https://finance.yahoo.com/news/half-ame ... 00968.html

[behappyalways]

Global Bank Lending Standards Tighten To GFC Levels
https://www.zerohedge.com/markets/globa ... gfc-levels

[winston]

Close to 190 U.S. banks could collapse: USA Today

By XIA LIN

186 more banks are at risk of failure even if only half of their uninsured depositors decide to withdraw their funds.

Many banks increased their holdings of bonds during the pandemic, when deposits were plentiful but loan demand and yields were weak. For many banks, these unrealized losses will stay on paper. But others may face actual losses if they have to sell securities for liquidity or other reasons.

Source: USA Today

https://www.thestar.com.my/news/world/2 ... e=smartech

[behappyalways]

Money market yields are significantly higher than savings rates at most banks
https://twitter.com/Mayhem4Markets/stat ... 1619376130


Smaller banks have greater commercial real estate exposure
https://twitter.com/Mayhem4Markets/stat ... 8750423046


Large Banks' Exposure to Commercial Real Estate
https://twitter.com/Mayhem4Markets/stat ... 2254406658

[behappyalways]

US Bank-Run Escalates: Deposit Outflows Top $360 Billion In Last 3 Weeks
https://www.zerohedge.com/markets/depos ... eding-most

[behappyalways]

A good watch on US banks...

Fed Downplays Bank Crisis As Another Bank Teeters (PacWest) | Jim Bianco
https://m.youtube.com/watch?v=Zp6T0-DDJQo