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Old 05-09-2023, 04:40 PM
 
26,191 posts, read 21,572,016 times
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Quote:
Originally Posted by Sunbiz1 View Post
For those with normalcy bias, here is the daily dose of doom and gloom>>>

"Almost half of America’s 4,800 banks are already burning through their capital buffers. They may not have to mark all losses to market under US accounting rules but that does not make them solvent. Somebody will take those losses.
“It’s spooky. Thousands of banks are underwater,” said Professor Amit Seru, a banking expert at Stanford University. “Let’s not pretend that this is just about Silicon Valley Bank and First Republic. A lot of the US banking system is potentially insolvent.”
https://www.telegraph.co.uk/business...credit-crunch/

wow, just wow; look at the chart comparisons to 08', and the M2 supply.
What are capital buffers for?
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Old 05-10-2023, 06:47 AM
 
5,149 posts, read 3,078,346 times
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Quote:
Originally Posted by Lowexpectations View Post
Actually most banks who loaned dollars at 3% can pay 4% on deposits and they are. For a multitude of reason of either selling off the 3% debt, leveraging 4% deposits or hedging interest rate risk. It’s actually just math and most banks are handling it just fine
The losses were incurred when those low interest loans were made. If, as you claim, the banks hedged these positions, then why are they now stuck with the paper losses? We all know what happened in 2008 to the institutions that bought “insurance” hokum sold by the likes of AIG — they found that the insurers were insolvent when it was time for them to pay.

Small regional banks = bag holders.
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Old 05-10-2023, 07:08 AM
 
Location: Wonderland
67,650 posts, read 60,867,486 times
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Do y'all realize that if all 186 banks identified did fail, that that's less than 4 percent of the banks in the US? Also, banks fail every single year and the number of bank failures is dropping each year, not rising each year. Not even this year.
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Old 05-10-2023, 09:25 AM
 
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Quote:
Originally Posted by KathrynAragon View Post
Do y'all realize that if all 186 banks identified did fail, that that's less than 4 percent of the banks in the US? Also, banks fail every single year and the number of bank failures is dropping each year, not rising each year. Not even this year.
Not even this year? According to the FDIC, in 2005 and 2006, there were no bank failures. Three banks were closed in 2007…followed by over 450 banks in the years 2008-2012.

There were zero bank failures in 2021 and 2022. Three banks (so far) have been closed in 2023 in the midst of a systemic liquidity shift.
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Old 05-10-2023, 09:27 AM
 
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Originally Posted by Lowexpectations View Post
What are capital buffers for?

Mandatory capital designed to reduce the procyclical nature of lending.
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Old 05-10-2023, 10:44 AM
 
26,191 posts, read 21,572,016 times
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Quote:
Originally Posted by TimAZ View Post
The losses were incurred when those low interest loans were made. If, as you claim, the banks hedged these positions, then why are they now stuck with the paper losses? We all know what happened in 2008 to the institutions that bought “insurance” hokum sold by the likes of AIG — they found that the insurers were insolvent when it was time for them to pay.

Small regional banks = bag holders.

The unrealized losses are largely on investments such as longer dated treasuries which dropped in value when rates rise while they will mature at par. You don’t understand how this works and it’s nothing comparable to AIG but that’s just ignorance getting repeated
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Old 05-10-2023, 10:46 AM
 
26,191 posts, read 21,572,016 times
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Quote:
Originally Posted by Sunbiz1 View Post
Mandatory capital designed to reduce the procyclical nature of lending.
Buffers are by design to be there to tap in the cycle so a drawdown against the buffer would be within the norms of the design
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Old 05-10-2023, 11:51 AM
 
5,149 posts, read 3,078,346 times
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Quote:
Originally Posted by Lowexpectations View Post
The unrealized losses are largely on investments such as longer dated treasuries which dropped in value when rates rise while they will mature at par. You don’t understand how this works and it’s nothing comparable to AIG but that’s just ignorance getting repeated
You claimed the banks hedged their loans and offset their risk of having to hold those treasuries to maturity. If that were true they wouldn’t be sitting with a buttload of impaired assets. SVB and FRB would still be in business today.
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Old 05-10-2023, 01:34 PM
 
Location: Wonderland
67,650 posts, read 60,867,486 times
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Quote:
Originally Posted by TimAZ View Post
Not even this year? According to the FDIC, in 2005 and 2006, there were no bank failures. Three banks were closed in 2007…followed by over 450 banks in the years 2008-2012.

There were zero bank failures in 2021 and 2022. Three banks (so far) have been closed in 2023 in the midst of a systemic liquidity shift.
Well, we all know what was happening in 2021 and into 2022. And it's the middle of May 2023 now. Oh well. Poor NY and CA, I guess.
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Old 05-10-2023, 01:58 PM
 
26,191 posts, read 21,572,016 times
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Quote:
Originally Posted by TimAZ View Post
You claimed the banks hedged their loans and offset their risk of having to hold those treasuries to maturity. If that were true they wouldn’t be sitting with a buttload of impaired assets. SVB and FRB would still be in business today.
I didn’t claim all banks offset their risk so you simply are fabricating that. They can and the smart ones do. SVB a didnt and they went under, FRB a was a different case than SVB but you wouldn’t be able to under the nuances because basic facts escape you
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