It's This Bad...
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it is part of the great reset plan they have for us the peasants, next , more mandatory vaccine compliance linked with a global ID system with fake CDBC moneys that they can program to expire anytime if you do not comply, the end game of humanity is rapidly approaching, I wonder if the crowning of Charles III has something to do with this.
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The fact is with AI, robots, drones, the internet, etc. 60% of the workforce can easily be replaced today. Even if a computer can only do half your job that means it can replace half the people doing your job. People think "a computer can't replace me", that is the wrong question. The correct question is how much of what you do can be replaced by a computer? For example, computers can't replace cashiers 100%, but they can replace them 90% and you are seeing that everywhere.
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If you are referring to my post your response demonstrates you didn't understand what was said.
Bonds held by a bank are an asset. Since interest rates have gone up the sale value of the bond has gone down. That is called a "unrealized loss". They do not have to declare that loss, they can hold the bond to maturity and never declare a loss.
The fact that 50% of their assets have unrealized losses means that 50% of their assets have been negatively impacted by the rise in interest rates.
These are facts that everyone who understands the banking industry can see.
The reason that major banks are failing and we have had several very major bank failures in the last few weeks is because of this same fact. The banks hold bonds that pay next to nothing in interest rates, but you can move your money to a money market which will pay much more than the bank will. However, if you move the money the bank will have to sell those assets, hence the "unrealized losses" become realized. With every bond they sell their precarious financial situation becomes more precarious because they are declaring losses.
This however, is only half the catastrophe that the banks find themselves in. The other half is the fact that commercial real estate has a very high vacancy rate. Companies are learning they don't need as much office space and they are going to walk away from the leases and leave the banks holding the bag. This is a major problem to 2,000 regional banks.
When you see layoffs of thousands of people, if those are white collar jobs you aren't just putting people out of work you are probably also going to leave commercial real estate for the bank to deal with.
Bonds held by a bank are an asset. Since interest rates have gone up the sale value of the bond has gone down. That is called a "unrealized loss". They do not have to declare that loss, they can hold the bond to maturity and never declare a loss.
The fact that 50% of their assets have unrealized losses means that 50% of their assets have been negatively impacted by the rise in interest rates.
These are facts that everyone who understands the banking industry can see.
The reason that major banks are failing and we have had several very major bank failures in the last few weeks is because of this same fact. The banks hold bonds that pay next to nothing in interest rates, but you can move your money to a money market which will pay much more than the bank will. However, if you move the money the bank will have to sell those assets, hence the "unrealized losses" become realized. With every bond they sell their precarious financial situation becomes more precarious because they are declaring losses.
This however, is only half the catastrophe that the banks find themselves in. The other half is the fact that commercial real estate has a very high vacancy rate. Companies are learning they don't need as much office space and they are going to walk away from the leases and leave the banks holding the bag. This is a major problem to 2,000 regional banks.
When you see layoffs of thousands of people, if those are white collar jobs you aren't just putting people out of work you are probably also going to leave commercial real estate for the bank to deal with.
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The reason a bank collapse is like dominoes is when a bank collapses you will get a "fire sale" of assets. This means that mortgages, car loans, credit and bonds will all be sold at a discount and that in turn means other banks will be impacted because people will lose confidence in the appraised value of their assets. The regional bank sector has already lost 9-10% of their assets value! When you understand how banks operate (take deposits, buy bonds, pay interest on the loans a little less than the interest they are getting) you can see that this 9=10% indicates they are potentially insolvent.
For an analogy you could describe the situation as a bonfire, all the wood is stacked and in place but as long as no one lights a match you are fine. The problem is that this bonfire has been lit in several places:
1. People are pulling their money out to get higher interest rate in a money market.
2. People are pulling their money out because they see the banks are potentially insolvent.
3. Foreign investment is pulling their money out because of BRICS.
4. When countries saw the sanctions put on Russia they realized their accounts could be next and so some pulled out then.
5. Inflation is causing everyone to have less and less money in savings. There is data showing that more and more people in the US are using credit cards to buy groceries. A practice that is unsustainable.
6. Repos of cars have skyrocketed, in many cases as much as 300%, meanwhile sales of cars are down because of the high interest rate.
7. Foreclosures take longer to work their way through the courts, but will almost surely follow the repo market.
However there is one way to avert the worst case scenario. If we can broker peace in Ukraine, and if the US government can agree to significantly tighten the belt and cut back spending on a very significant scale, then perhaps we could avoid a greater depression than in 1929.
For an analogy you could describe the situation as a bonfire, all the wood is stacked and in place but as long as no one lights a match you are fine. The problem is that this bonfire has been lit in several places:
1. People are pulling their money out to get higher interest rate in a money market.
2. People are pulling their money out because they see the banks are potentially insolvent.
3. Foreign investment is pulling their money out because of BRICS.
4. When countries saw the sanctions put on Russia they realized their accounts could be next and so some pulled out then.
5. Inflation is causing everyone to have less and less money in savings. There is data showing that more and more people in the US are using credit cards to buy groceries. A practice that is unsustainable.
6. Repos of cars have skyrocketed, in many cases as much as 300%, meanwhile sales of cars are down because of the high interest rate.
7. Foreclosures take longer to work their way through the courts, but will almost surely follow the repo market.
However there is one way to avert the worst case scenario. If we can broker peace in Ukraine, and if the US government can agree to significantly tighten the belt and cut back spending on a very significant scale, then perhaps we could avoid a greater depression than in 1929.
