U.S. Banks Sitting on $750 billion In Losses On Real Estate Debt Related Securities
October 29, 2024
It seems they stacked up even more debt per bank than in 2008, and they’ve been bluntly ignoring the safety measures that were put in place to prevent this from happening again.
Print Baby Print! That’s what they’ve always done so it must be right. What could possibly go wrong?
Worth noting that the top 15 banks have over 10 trillion in assets.
How about a bailout?
With all good things, this crap started when PPP flushed the banks with cash to deploy and their most short term profitable measure with no concern for the future was buying mortgage backed securities. Rates go up, who do you think loses every time you pay your 3% fixed rate for 30 years? The article underestimates the banks ability to sit on their mortgages, they have for 4 years and any time someone moves, dies, divorces, etc., that’s less unrealized loss. Most banks are paying you nothing on your deposits. Look at net interest margins as a whole, they’re fine for now. People forgot after 10+ years of ZIRP that interest rates go up as well.
These losses are related to commercial real estate not housing.
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Print Baby Print! That’s what they’ve always done so it must be right. What could possibly go wrong?
Worth noting that the top 15 banks have over 10 trillion in assets.
How about a bailout?
With all good things, this crap started when PPP flushed the banks with cash to deploy and their most short term profitable measure with no concern for the future was buying mortgage backed securities. Rates go up, who do you think loses every time you pay your 3% fixed rate for 30 years? The article underestimates the banks ability to sit on their mortgages, they have for 4 years and any time someone moves, dies, divorces, etc., that’s less unrealized loss. Most banks are paying you nothing on your deposits. Look at net interest margins as a whole, they’re fine for now. People forgot after 10+ years of ZIRP that interest rates go up as well.
These losses are related to commercial real estate not housing.
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