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The FOMC meeting is here and inflation is still out of control but now banks are taken hostage with rates, what do you do? – Investment Watch

by AugustusInBlood

Bank Crisis Survivors Remember How Fast Dominoes Can Fall

Steve Chiavarone doesn’t want to scare anyone, but what he remembers most from the last banking crisis was how sure most people were that it wouldn’t happen.

At his New York office in early 2008, Wall Street’s best and brightest — “strategist after strategist after strategist after strategist,” recalls Chiavarone, now senior portfolio manager at Federated Hermes — paraded through to say that even if a recession hit, it’d be shallow and short.

That’s not, of course, how things played out. A few months later, “you’d go to your office every day and something that you never thought would happen would happen,” he said.

All sorts of crises have been predicted by financial Cassandras in the aftermath of 2008. In reality, they’re exceedingly rare in markets. And yet, with three US banks down, a fourth teetering and the government-brokered acquisition of a fifth — and much larger — institution in Europe, the comparisons to that episode have become a little harder to ignore.

We Are In Uncharted Territory

Fear is in the air.  In recent days we have seen a level of panic that we have not witnessed since 2008, and in such an environment people just want to make sure that their money is safe.  But there are very few places in our financial system that are truly “safe” at this point.  The cryptocurrency industry has already experienced an absolutely disastrous crash, collapsing bond prices have blown a 620 billion dollar black hole in bank balance sheets, residential real estate prices have started to plummet, and now the largest commercial real estate crisis in the entire history of the United States is looming.  The good news is that stock prices are holding steady for now, but that can only last for so long.  Just like we witnessed in 2008, a major banking crisis will inevitably hit the stock market really hard.

I wish that it wasn’t true, but without the banks we don’t have an economy.

And right now we are “in the midst of a nationwide banking crisis not seen since The Great Recession”

The Top 3 Reasons the US Has Entered the Inflation Death Spiral


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