Don’t worry, Banksters, the right to make a profit remains. The people who are punished by this policy will bail you guys out, again.
By design?
History of the Bush days: the Savings and Loan Crisis Bailout
How much money did taxpayers lose in the S&L crisis?
The problem began during the era’s volatile interest rate climate, stagflation, and slow growth of the 1970s and ended with a total cost of $160 billion; $132 billion of which was borne by taxpayers.
Source: Investopedia
Most of this is because of Interest rates going up and the value of their bind portfolios going down. Another crisis of Mark to Market. My guess is Powell is going to have to ease off the rate hikes or problems will only worsen.
To Big To Fail is still the prevailing strategy. If Citicorp goes down to $0.25 a share again I will buy all I can which is where it went in 2008 and I curse myself for not buying then.
JPM was a super buy yesterday, down about $7.50ish, up about $4 earlier today.
This “regional bank” issue is unquestionably bigger than is being stated. I don’t think it’s systemic like 2007-2009. The ZeroHedge article is tough, but important to read.
“What’s more, customers are lured out of bank deposits seeking higher-yields in safe assets such as short-term Treasuries.”
So you park a lot of cash at the bank. The bank can’t sit on that much cash so they buy Treasuries with yields at 1%. Yields stay low for years so the bank don’t bother marking the value of those bonds on their books to the market price. It moves very little.
Then a few years go by and suddenly you realize you can take your cash from the bank and buy a 6 month, 1 year or 2 year T-Bill and get around 5% return for it. So you withdraw your money. The bank has to sell that 1% Treasury to get you the cash... but who is going to buy a 1% Treasury when the rates today are so much higher? So the bank has to sell the Treasury at a loss to get you your cash. Now the bank has to mark the value to market, and they are looking at a big loss they have to book.
They’re creating another crisis which will require another bailout. Like clockwork. Every 3 or 4 years, we gotta have a bailout.
JPM and WFC closed up today
Crap journalists all over the place
Wells Fargo and Bank of America don’t that good of a record of handling some peoples large accounts.
Did oops thingy and said oh we found it.