Banking Crisis 2023

[EvaDK]

^ it's been coming since the early 2010s, just post the financial crisis.

Every month there's another Chinese bank, company or regional government on the verge of insolvency underpinned by huge debts.

 

[Hygro]

Oh no! The government has to do something to stop Powell!

They gave banks the ability to borrow from the Fed with treasury collateral valued at its face value instead of current market value, which basically solved the problem.

 

[Harv]

They gave banks the ability to borrow from the Fed with treasury collateral valued at its face value instead of current market value, which basically solved the problem.

Wasn't that one of the really bad ideas that caused the 2008 crash?

 

[Kaitzilla]

Banks get a downgrade from Moody's. Here are the 10 lenders impacted.

Ratings agency says its also watching some of nation's biggest lenders for possible cuts amid ongoing financial strain.

www.cbsnews.com

Moody's is downgrading the credit ratings of 10 small- to mid-sized banks, citing growing financial risks and strains that could erode their profitability. The credit ratings agency also warned it is watching some of the nation's biggest lenders for potential downgrades.

The actions come after a banking crisis that started in March with the sudden collapse of Silicon Valley Bank, once the nation's 16th largest bank, when depositors grew fearful of the bank's solvency and made a classic bank run. Signature Bank and First Republic Bank soon followed, leading to more concerns about the banking industry's stability

Ratings agencies

 

[Hygro]

Wasn't that one of the really bad ideas that caused the 2008 crash?

Well, one of the causes for 2008 was mark to market pricing laws, forcing companies to value themselves based on current market prices and Not on future guarantees. This allows banks today to borrow against guaranteed values of their financial assets instead of the temporary or fire sale market prices, so in this regard it’s the opposite. But what thing were you thinking of?

 

[Farm Boy]

So if one is too big to fail they borrow against the US's credit, and now that's getting downgraded. The teets must be getting chapped.

 

[Hygro]

Whose only default risk is the debt ceiling.

 

[Farm Boy]

A very specific definition of failure given something that's value is made of whispers and dreams.

 

[Kaitzilla]

So if one is too big to fail they borrow against the US's credit, and now that's getting downgraded. The teets must be getting chapped.

That is a very interesting point.
J.P. Morgan is AA while the USA is higher at AA+

I can't imagine any of the big US banks being higher than the sovereign.
A problem if USA keeps getting downgraded.

A few Euro banks are AAA though.


Commercial real estate and high interest rates for housing should show an effect eventually.
China is slowing too.
Always be prepared for anything!

 

[Aiken_Drumn]

I bought £5000 of Schwab @$56. Was up a few hundred, now down a few hundred. Hopefully i'll be up 20-30% in a years time...

Currently 13% down on my SCHW bet.

I am back "up" 12%.

Today it is $70. I am 21% up. Maybe its time to get off this ride.

 

[Birdjaguar]

I'll stick with Apple. ~$190 last Friday. I bought it at $111.

 

[Aiken_Drumn]

I'll stick with Apple. ~$190 last Friday. I bought it at $111.

Looking at most of the big movers the whole market has risen considerably.

 

[Birdjaguar]

Looking at most of the big movers the whole market has risen considerably.

The S&P 500 index is now at 4700+ up from 42-4300 lows earlier this year. I'd be quite happy if it hangs out around 4600 for a while.

 

[Hygro]

I made a tiny bit betting positively on banks this year. They say what is “known” is priced in. Well I say sure but ignorance is priced in as well.

 

[amadeus]

Makes me sad I didn’t buy Dillard’s (dept store chain in the south) at 4 during the recession. They warned me, said I was stupid! I said the fundamentals were good. Closed recently at 395.

Also I needed money for college. Let that be a lesson to you: speculation yes, college degrees no! From a coulda-been millionaire.

 

[Hygro]

saw a meme saying like damn I shoulda bought a house in 2008 instead of messing around in the 4th grade.

 

[Birdjaguar]

For many, I think looking for "quick riches" is a risky business and can lead to disappointment. It took decades for my wife and I to accumulate the funds to retire comfortably in our late 60s. In 30 years our house has tripled in value but since we still live there, that cash is locked away. The challenge for us was always to make steady additions to our 401Ks & IRAs. In general, I see individual stocks as too risky a path. Much depends upon one's goals. If the goal is to retire at 50, then your strategy will be very different. Having kids or not also makes a huge difference.