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Unrealized losses at banks remain a smoldering problem

785 sats \ 20 comments \ @TomK 25 Jun econ

Unrealized losses in the American banking system remain consistently above 500 billion dollars. Of course, the situation in other regions of the world, such as the eurozone, is no better and in fact much worse. The cumulative unrealized losses following the crash on the bond markets exceed those of the Great Financial Crisis of 15 years ago many times over.

However, the mainstream media in particular tend to pay little attention to this topic in order to avoid bank runs and further crises in advance. True to the motto: 'it is only a loss when it is realized. Do not withdraw 'Your' money, please' (95% doesn't exist either).

And so people in banking circles continue to hope that it will be possible to inflate the bond market back to its former size and grandezza and make these unrealized losses magically disappear. Central banks everywhere are working to make this magic effect of the fiat money system work again. May the magic Fiat Ponzi be with You!

https://m.stacker.news/37004 https://m.stacker.news/37005

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159 sats \ 4 replies \ @siggy47 25 Jun

What still amazes me is that there isn't more anger directed at the US fed for making the problems worse overseas. I am surprised the fed is keeping rates this high. Either they want US bank failures to consolidate the system and further accumulate power in the big banks, or they are genuinely afraid that inflation will be uncontrollable if they ease.

96 sats \ 0 replies \ @TomK OP 25 Jun

In my opinion, the Fed is clearly trying to establish its own independent capital market, as the introduction of sofr shows. and the fact that the anger at the Fed is no greater outside the functional circles of the ECB is only due to the general lack of understanding of the public's ignorance. Nobody here knows what we are talking about

150 sats \ 2 replies \ @supertestnet 25 Jun

I am surprised the fed is keeping rates this high

5.5% is not high imo

87 sats \ 0 replies \ @TomK OP 25 Jun

Depends on the debitor or on what table you sit

96 sats \ 0 replies \ @siggy47 25 Jun

Historically you're right. Everything changed post 2008. Now, it's high if you're holding a ton of "safe" us government debt at <2%.

150 sats \ 1 reply \ @SatsMate 25 Jun

Its suprising how the house of cards hasn't crashed yet. Knowing the current administration is in power and whats to get re-elected - they will deploy capital in every way to keep things elevated and humming along (even though the economy is dead inside).

0 sats \ 0 replies \ @TomK OP 25 Jun

It takes time to destroy the infantile believe of the herd in its beloved state and banking overlords

96 sats \ 2 replies \ @Hamstr 25 Jun

End the Fed

https://m.primal.net/IvgM.jpg

the printing will at one point be fool's money

10 sats \ 1 reply \ @TomK OP 25 Jun

Good ol' Alex was right! That's the end phase of 'democracy' (or: demo-crazy)

42 sats \ 0 replies \ @Hamstr 25 Jun

You mean DEMON-cracy? cuz you know their the devil

84 sats \ 0 replies \ @halalmoney 25 Jun

Magicians must be impressed with this sleight of hand!

42 sats \ 1 reply \ @Akg10s33 25 Jun

I agree with you, banks always want to have control of people's money... and in addition to that, work and earn money with the same savings that people blindly go and deposit... and of course the big media that are more than bought and they publish exactly what you ask them to publish if you pay them well... they don't bring that news to light so that people don't get scared and I take their money... and of course the same thing is happening in the euro zone too. .. and the press does not give it much importance... and so they continue earning more with your money... and the press charging for not saying little or nothing...

0 sats \ 0 replies \ @TomK OP 25 Jun

... the fiat vicious cycle in circulation

42 sats \ 1 reply \ @duvel 25 Jun

You mentioned that unrealized bank losses are worse in the eurozone. Do you have a reference for this, article or chart? Is it a matter of time before they're uncapitalized?

21 sats \ 0 replies \ @TomK OP 25 Jun

What I can say, however, is that during the GFC, German banks alone had to take advantage of public rescue programs amounting to half a biilion euros. If we assume a higher volume today, as is the case with the American banks, the situation is likely to be more than fatal.

42 sats \ 1 reply \ @160ed04091 25 Jun

To me banks need to manage their risk proactively, maybe by diversifying their portfolios and adjusting their investment strategies

0 sats \ 0 replies \ @TomK OP 25 Jun

the problem with these banks is that they have built up a frictional reserve system based on government bonds, and God knows these are no longer safe if governments continue to pursue such debt policies