muses of the moment

May 22, 2012

US Banks

GG is getting a little nervous about US banking.

Her reasons:

  • Europe still not fixed, very unstable. The European exposure of the Big Five Banks is significant. And their derivatives exposure is pretty massive. The new IDSA rules may pose a problem for them to hide real losses. GG is watching the IDSA closely.
  • Banks have a lot of loans coming to maturity this year. Click here. Can they roll-over, yes, gg presumes, but how does this effect balance sheets, profit, credit rating, and cashflow near and long-term?
  • JPM has a cash flow problem among other recent issues. Click here.
  • The US banking system is BANKRUPT, the only thing holding it together is confidence. When confidence is gone, the Fed has a major problem. The items listed above effect confidence and brings more banking insolvency issues to the light of day.

Fed can handle the US or European impact on the US Banking system, not both at the same time. Plus, we have Japan and Britain looming storm clouds as well.

Remember, this is about a controlled implosion, not the avoidance of an implosion. So far, the crises are occurring in a systemic manner where the Fed can focus on one thing at a time, but that will not last forever. It is anybody’s guess as to when it breaks down.

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2 Comments »

  1. Gg,

    Just transferred our accounts from Chase to a local bank rated B+ by Weiss ratings. No need to continue to reward incompetance.

    -David

    Comment by Lemming — May 22, 2012 @ 10:16 am

  2. Excellent!

    gg

    Comment by totallygroovygirlfriday — May 22, 2012 @ 12:25 pm


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