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"A Major Credit Crunch Has Already Begun As $1.7
Trillion Unrealized Losses Aggravate Banking Crisis"
By Epic Economist
"This is moving even faster than a lot of us thought that it would. For weeks, I have been warning my viewers about the worsening banking crisis. When banks get into trouble, they start getting really tight with their money. That means fewer mortgages, fewer commercial real estate loans, fewer auto loans and fewer credit cards being issued. So it should greatly concern all of us that U.S. banks are bleeding deposits at an absolutely staggering pace right now. During the week ending March 15th, 98.4 billion dollars was pulled out of U.S. banks. That was really bad, but we just learned that things got even worse the next week. During the week ending March 22nd, 126 billion dollars was pulled out of U.S. banks…When lots of depositors start pulling their money out, banks can be forced to sell assets in order to have enough cash.
Unfortunately, U.S. banks are sitting on a giant mountain of unrealized losses right now. And it turns out that small banks are getting particularly tight with their money… Commercial bank lending dropped nearly $105 billion in the two weeks ended March 29, the most in Federal Reserve data back to 1973. The more than $45 billion decrease in the latest week was primarily due to a a drop in loans by small banks. The pullback in total lending in the last half of March was broad and included fewer real estate loans, as well as commercial and industrial loans.
All of the bubbles have started to burst, and our entire system is beginning to tremble violently. So I would encourage you to hold on tight, because we have got a very bumpy ride ahead of us. A major credit crunch is already here, but most Americans still don’t understand that severe economic pain is dead ahead."
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