Half of America’s banks could be insolvent – this is how a credit crunch begins

[anigbrowl]

Potentially worrying (and I'm a longtime financial doomer), but I'd like a less ideological messenger than Ambrose Evans-Pritchard, who I regard as weathervane rather than a serious commentator.

[jc_811]

https://web.archive.org/web/20230502224039/https://www.teleg...

[throwawayreci]

Everytime i acted rationally i found myself on the loosing side.

I decided to act irrationally. I think we are living in a different financial system that govs would do anything to protect it inorder to avoid recession.

Acting like an idiot increases the winning chances.

[nadermx]

You can't win the lottery without buying a ticket

[donedeals]

Inflows from weaker banks will cause larger banks to increase lending activity as they accumulate dry powder. Banks are in the business of lending and having deposits burns a hole in their pants.

[toomuchtodo]

Who would you lend to in this macro?

[throwawayadvsec]

Ignorant european here: if that's the case, is it a bad idea to keep a lot of money on S&P500 right now?

[arcbyte]

"Now" is almost certainly a fantastic time to buy the S&P500. It's on sale. But don't expect to see that money for ~5 years.

[crumpusBaggins]

Ignorant American here:

No one really knows what is going to happen in the short term...

[DLA]

Paywall. Super bold claim. I’d love to see the hard data backing this assessment.

[jc_811]

There’s a non-paywalled link in a comment above now. The meat of it though is this paragraph:

“A Hoover Institution report[1] by Prof Seru and a group of banking experts calculates that more than 2,315 US banks are currently sitting on assets worth less than their liabilities. The market value of their loan portfolios is $2 trillion lower than the stated book value.”

[1] https://www.gsb.stanford.edu/faculty-research/working-papers...