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Half of America’s banks could be insolvent – this is how a credit crunch begins
- deleted 3y ago[deleted]
- anigbrowl 3y agoPotentially worrying (and I'm a longtime financial doomer), but I'd like a less ideological messenger than Ambrose Evans-Pritchard, who I regard as weathervane rather than a serious commentator.
- DLA 3y agoPaywall. Super bold claim. I’d love to see the hard data backing this assessment.
- jc_811 3y agoThere’s a non-paywalled link in a comment above now. The meat of it though is this paragraph: “A Hoover Institution report[1] by Prof Seru and a group of banking experts calculates that 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.” [1] https://www.gsb.stanford.edu/faculty-research/working-papers/monetary-tightening-us-bank-fragility-2023-mark-market-losses https://www.gsb.stanford.edu/faculty-research/working-papers...
- rocket_surgeron 3y ago>Hoover Institution It is not a fallacy to assert that economic analysis from the Hooverites is about as likely to be correct as medical advice from a hobo who lives in a culvert behind the nail parlor in the strip mall. The hobo may be right. May be. All of the numbers might be correct, absolutely without flaw. But they're still hobos ranting about rationally acting rational actors. Half of the fellows at Hoover are the Very Smart People who rubber stamped the Iraq War go-ahead who are now telling us that big gubmint is the problem and the sky is about to fall.
- EdwardDiego 3y agoYeah, without delving into them too deeply, the name alone suggests a common ideological approach to economic policy. ...oh, Reagan, Thatcher and Hayek are honorary fellows, and Condoleeza Rice is the director, and the Walton family make generous endowments. I'm unsurprised. Economics becomes ever more dismal when it becomes political. And I feel a strong urge to link to the Supply Side Jesus comic, but to be fair that happens whenever Reagan and Thatcher surface.
- jc_811 3y agohttps://web.archive.org/web/20230502224039/https://www.telegraph.co.uk/business/2023/05/02/half-of-americas-banks-are-already-insolvent-credit-crunch/ https://web.archive.org/web/20230502224039/https://www.teleg...
- throwawayreci 3y agoEverytime i acted rationally i found myself on the loosing side. I decided to act irrationally. I think we are living in a different financial system that govs would do anything to protect it inorder to avoid recession. Acting like an idiot increases the winning chances.
- nadermx 3y agoYou can't win the lottery without buying a ticket
- throwawayadvsec 3y agoIgnorant european here: if that's the case, is it a bad idea to keep a lot of money on S&P500 right now?
- crumpusBaggins 3y agoIgnorant American here: No one really knows what is going to happen in the short term...
- unmole 3y agoNo one really knows what is going to happen in the long term either.
- out-of-ideas 3y agoin the long term, we are all dead and nothing else matters
- arcbyte 3y ago"Now" is almost certainly a fantastic time to buy the S&P500. It's on sale. But don't expect to see that money for ~5 years.
- donedeals 3y agoInflows from weaker banks will cause larger banks to increase lending activity as they accumulate dry powder. Banks are in the business of lending and having deposits burns a hole in their pants.
- toomuchtodo 3y agoWho would you lend to in this macro?