Are The USA Banks / Banking System Solvent?

[enjoythemusic]

Instead of taking space in the stock Trading 2.0 thread and others, my hopes are we centralize the banking situation / financing here.

The question is fairly simple, and with this weekend's two bank closures and open-ended limitless bailout financing with possibly more to come, I think the question of solvency is valid. Jim Cramer last night said there was a list of questionable banks, does anyone have that list (please post).

Is the banking system solvent?

Or granularly, which bank isn't solvent and which one is?

[Blansky]

Growing up in Canada, the 5 or 6 banks were all chartered banks at the time. No fly by nighters.

I think in the 2008 banking crisis Canadian banks fared far better than the American ones.

Of course as a business person in the 70s it was impossible to borrow money unless you had that amount in your savings account.

[enjoythemusic]

Good points Blansky. In 2008 Iceland took what some feel was appropriate action and recovered faster than other countries. But now in 2023, it seems the situation is very different and stems from other problems.

BTW people on TV today keep saying "uninsured deposits". If the system was sound why would you need costly insurance?

Does anyone know how many Dollars in US Treasury / Debt is 'underwater' sans leverage... and the actual quantity with leverage factored in? How much are we really talking about here?

[m j b]

First of all, it's a general recognized fact that Jim Cramer is an idiot.

OK, not really, he's a smart guy, but remember, he's there for entertainment, not for true financial advice. He says so at the top of each show. Disclaimer. Don't sue me. LOL

Anyway... we are talking about the USA banks, right? Because internationally, I don't know much. But here in the good 'ole USofA, our banks, generally speaking, are monitored and audited by the FDIC and I would presume most are in very good shape. The unfortunate experience with SVB was due to a confluence of poor management, poor decisions of said management, a very "connected" clientele who quickly acted on a perceived weakness, and a very unique, geographically and economically connected customer base. Compare a small regional bank like that to a country-wide diversified bank like BoA, JPM or W-F. Not the same kind of risk, not at all.

This is nothing like the financial crisis of 2008, which in addition to being an international crisis, was largely caused by a systemic ignorance of what they were buying and selling. Much of that kind of behavior is now prohibited.

So, no. I don't see any risks here of insolvency. As I stated in the other thread, I'm buying bank stocks right now.

[Chester01]

I mean define solvent? If one is comfortable with enough risk, then no, thing is really solvent. No one really paid the price from what went down in 2007/2008 and so there is no incentive to play things safely.

[MrGoat]

I’d wager none are fully solvent.

Greed.


Sent from my Apple privacy invasion product

[EEpro]

Fractional reserve banking. Def not solvent.

[Sephiroth]

You lose all credibility the moment you mention Cramer.

[enjoythemusic]

Originally Posted by Sephiroth

You lose all credibility the moment you mention Cramer.

Totally agee IF you thought I 'value' that a__clown. Back in 2008 I sent the SEC a note about Jim's market manipulation... Nothing came from it if course.

Buuuuut last night he did mention a list of banks, my guess is they followed the same scheme and they're at great risk. So yeah, show us the list Jim

Anyone here have it?

[enjoythemusic]

Originally Posted by m j b

First of all, it's a general recognized fact that Jim Cramer is an idiot....

Understood and agreed.

As I stated in the other thread, I'm buying bank stocks right now.

When do you think Quantitative Easing will begin?

[huncho]

Originally Posted by enjoythemusic

Understood and agreed.



When do you think Quantitative Easing will begin?

nomura thinks we get a 25bps cut this month and an end to QT. not sure i think that'll happen, i imagine just a pause is likely. cpi tomorrow will give a better idea of chances

[Easy E]

Originally Posted by EEpro

Fractional reserve banking. Def not solvent.

This, 100%. Our banks are absolutely insolvent. In other news so is the FDIC.

[enjoythemusic]

Let's talk about the positives of all this too. There is some parasitic fee savings.

The great news is that there's no need to pay for insurance for deposits over $250k. Large companies can now cancel SIPC insurance as the Fed is now guaranteeing it all.

Nice win-win

[brandrea]

Originally Posted by Blansky

Growing up in Canada, the 5 or 6 banks were all chartered banks at the time. No fly by nighters.

I think in the 2008 banking crisis Canadian banks fared far better than the American ones.

Of course as a business person in the 70s it was impossible to borrow money unless you had that amount in your savings account.

There still are and folks love to hate our oligopoly banking system (not you specifically just in general).

Love them or hate them, they are very well capitalized have been wonderful to own over the long term. If you graph them over 30+ years, the charts looks absolutely beautiful … straight up and to the right

They’ve also never cut their dividends … ever.

[RyanJ]

The funny part is how big of a story this is when banks fail more than people realize. I am thinking this is a small percentage of overall US banking.

Don't believe me, here is a list (all 48 pages):

https://www.fdic.gov/resources/resol...led-bank-list/

[scarlet knight]

Cramer recommended buying stock in Silicon Valley Bank in February. My financial hero is Jed Clampett, who walked into his bank and asked Mr. Drysdale to show him his money.

[Calatrava r]

Who knows. Hopefully, they are.

[Krash]

I think it’s overblown. Way overblown. I’m thinking this is a buying opportunity. Time to put more money in bank stocks very soon.

Even back in 2007-2008, when the situation was significantly worse, only a tiny handful of banks were technically insolvent. The overwhelming majority were not insolvent.


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[Wcdhtwn]

Depends on the Fed and how fast and high they drive rates up. They know full well about the investments many banks have made in medium term treasuries and the effect on their value as they raise rates. If we get two or three more .50 rate hikes in the next few months, we’ll see much more of this.

[Krash]

Originally Posted by Blansky

Growing up in Canada, the 5 or 6 banks were all chartered banks at the time. No fly by nighters.

I think in the 2008 banking crisis Canadian banks fared far better than the American ones.

Of course as a business person in the 70s it was impossible to borrow money unless you had that amount in your savings account.

Nothing wrong with redundancy. The more banks, the better, no doubt.

Plus, the Canadian population is 38 million and is highly concentrated in a smaller geographic area. USA population is 330 million (8x more) and much more spread out.

You just can't compare the 2.

[enjoythemusic]

From Bloomberg about an hour ago. Would be great to see a full list of all those with exposure. Anyone here have a Bloomberg terminal that can screen capture for us?

bloomberg.jpg

[pickettt]

Originally Posted by EEpro

Fractional reserve banking. Def not solvent.

Damn near the definition of insolvency.

[superdog]

Originally Posted by enjoythemusic

From Bloomberg about an hour ago. Would be great to see a full list of all those with exposure. Anyone here have a Bloomberg terminal that can screen capture for us?

Attachment 1354348

This scares me.

I spoke to my FA earlier today. He’s from ML. He says he has zero concerns. It’s very different from 2008.

But we are still moving all cash to 6 month T Bills. Keeping a couple of bucks liquid for potential opportunities. Fully fdic insured, of course. I’d rather be late catching the the bull, than late seeing that bear.

But I’m getting even that much more defensive.

[Polyesterpig]

Cramers prediction 30 days ago LOL. Start video at 1.00 minutes

https://www.youtube.com/watch?v=vw9IZ7_8XCw

[Chewbacca]

US banks are sinking! So I put my last $826,174,811.01 into Starbucks Points, McDonald’s gift cards, Rolexeses (duh) and Sr Frogs Group International.

[superdog]

Originally Posted by Chewbacca

US banks are sinking! So I put my last $826,174,811.01 into Starbucks Points, McDonald’s gift cards, Rolexeses (duh) and Sr Frogs Group International.

Calling my FA back tomorrow.

Will be following you. Obviously

[huncho]

[Chewbacca]

Originally Posted by huncho

Oh no.

[enjoythemusic]

Originally Posted by Chewbacca

US banks are sinking! So I put my last $826,174,811.01 into Starbucks Points, McDonald’s gift cards, Rolexeses (duh) and Sr Frogs Group International.

Good Wookie

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Agree that in the end it'll all work out, Dollars are unlimited. The trick is how to best benefit from this. Never let a good crisis go to waste, just ask Jamie Diamond.
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PS: Someone elsewhere brought this up... Did the USA *effectively* just nationalize the banking system?

[Chewbacca]

We should have known this was coming a while back when this bank went under but we were distracted with Basel, Anna’s hips and Jocke’s photoshopping.