For a while, I was ignoring some of these reports because I thought they were isolated issues.  But when you step back and take a bigger picture view of things, it really does appear that we have a major problem with the banks.

According to CNN, on Friday many of our largest banks “were hit by deposit delays”…

Multiple US banks were hit by deposit delays on Friday caused by an error at a payment processing network, according to the Federal Reserve.

The Clearing House, which operates the Automated Clearing House system, which allows banks to send electronic payments to each other, experienced a processing error with a batch of bank transactions. Banks send everything from direct deposit paychecks to customer bill payments for mortgages and utility bills through the ACH system.

This caused a tremendous amount of distress, because paychecks were not showing up in the accounts of a lot of people. And considering the fact that more than 60 percent of the country is currently living paycheck to paycheck, that is a big deal.

Incredibly, some banks are still trying to fix the problem.  The following is a message that PNC Bank posted on Twitter on Sunday…

Good morning, Amy. Due to an industry-wide delay with Federal ACH transactions, some ACH credits and debits, including some Direct Deposits, haven’t been processed. We recommend that you contact your employer or ACH originator for more information. Thank you.

There have been so many bank “glitches” this year.

So why is this happening? Could this latest incident have been caused by a cyberattack?

I wish that I had answers to those questions.

Meanwhile, banks all over the U.S. are suddenly shutting down thousands of accounts without any warning whatsoever…

The reasons vary, but the scene that plays out is almost always the same.

Bank customers get a letter in the mail saying their institution is closing all of their checking and savings accounts. Their debit and credit cards are shuttered, too. The explanation, if there is one, usually lacks any useful detail.

Can you imagine how you would feel if your cards suddenly did not work and you did not have access to your money?

Right now, we are seeing a tsunami of “de-risking” by banks that is unlike anything we have ever seen before…

Or maybe the customers don’t see the letter, or never get one at all. Instead, they discover that their accounts no longer work while they’re at the grocery store, rental car counter or A.T.M. When they call their bank, frantic, representatives show concern at first. “Oh, no, so sorry,” they say. “We’ll do whatever we can to fix this.”

But then comes the telltale pause and shift in tone. “Per your account agreement, we can close your account for any reason at any time,” the script often goes.

These situations are what banks refer to as “exiting” or “de-risking.”

To me, this is one of the most alarming financial trends that I have seen in a long time.

On top of everything else, Citizens Bank in Iowa has become the sixth U.S. bank this year to go belly up.  The following comes from a press release issued by the FDIC…

Citizens Bank, Sac City, Iowa, was closed today by the Iowa Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect depositors, the FDIC entered into a Purchase and Assumption Agreement with Iowa Trust & Savings Bank, Emmetsburg, Iowa, to assume all of the deposits of Citizens Bank.

The two branches of Citizens Bank will reopen as branches of Iowa Trust & Savings Bank on Monday during normal business hours. This evening and over the weekend, depositors of Citizens Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

Depositors of Citizens Bank will become depositors of Iowa Trust & Savings Bank, so customers do not need to change their banking relationship in order to retain their deposit insurance coverage. Customers of Citizens Bank should continue to use their existing branch until they receive notice from Iowa Trust & Savings Bank that it has completed systems changes to allow its branch offices to process their accounts as well.

As of September 30, 2023, Citizens Bank had approximately $66 million in total assets and $59 million in total deposits. In addition to assuming all of the deposits, Iowa Trust & Savings Bank agreed to purchase essentially all of the failed bank’s assets.

U.S. banks are sitting on an absolutely colossal mountain of unrealized losses.

So it is just a matter of time before more fail.

And other types of financial institutions are also on shaky ground.

In fact, the biggest publicly traded brokerage firm in the country has started giving large numbers of workers the axe…

Charles Schwab on Monday began laying off employees across the company.

Schwab, the largest publicly traded US brokerage, didn’t disclose how many employees were affected in an internal message seen by The Wall Street Journal. Some remaining employees will have new jobs or managers, according to the message.

Of course layoffs are starting to pick up speed from coast to coast.

According to Zero Hedge, the number of employed Americans went down by 348,000 last month…

Yes, payrolls may still be positive but the actual change in monthly employment isn’t. In fact, in October the number of employer Americans collapsed by 348K (per the Household Survey). This was the second negative print this year, and the 7th negative employment month since the covid crash. Ironically, since then, we have seen just one negative payrolls months which makes sense, since the nonfarm payrolls number is far less accurate and much more gamed due to its market-moving abilities. The plunge in employment coupled with the jump in unemployed workers (by 146K) is also the reason why the unemployment rate unexpectedly went up.

Economic turmoil is erupting all around us, and much more chaos is on the way.

So I hope that you have prepared for very harsh economic times, because the pace of change is only going to get quicker from here.

Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.

Silicon Valley Bank and Signature Bank collapsed in March to start the crisis, marking two of the largest bank failures in U.S. history. Since then, America’s biggest bank JPMorgan Chase’s stock has risen in value, and the institution notched record earnings after acquiring First Republic Bank in May, the biggest bank that failed in the 2023 crisis, and the second-largest collapse ever.

Moreover, regional bank stocks, including PacWest Bancorp, Western Alliance Bancorporation, Zions Bancorporation and Comerica Incorporated have all significantly declined since March, losing between 25% and 70% of their value. While many of the largest banks’ stocks have also declined, they have not fallen as dramatically.

“I continue to be concerned about the banking sector, and regional banks in particular,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the Daily Caller News Foundation. “Thus far we have not seen any significant improvements in the balance sheets of those regional banks, nor any indication that current market trends will reverse.”

Federal Reserve Chair Jerome Powell raised the possibility of more interest rate hikes due to high inflation in an August speech at the Jackson Hole Economic Symposium. The Fed has raised interest rates 11 times since March 2022 to fight inflation, bringing the federal funds rate within a range of 5.25% and 5.50%, the highest since January 2001.

“The only regionals that have a hope of making it through the current storm are those who prudently hedged against interest rate risk – but they seem few and far between,” Antoni told the DCNF.

“There’s no question the [global systemically important banks, G-SIB] won and the middle-sized banks — let’s call that banks with between $50 billion and $250 billion in assets — were the losers,” Cumberland Advisors Chief Investment Officer David Kotok told CNN Business.

However, JPMorgan Chase and other large institutions helped prevent the contagion from spreading, Kotok told the DCNF.

“The United States was facing a banking system contagion. Money was flying out of  banks,” Kotok told the DCNF. The money went to “fortress banks like JPMorgan Chase, and the other [biggest banks] … the JPMorgan fortress institutions played a critical role because they could take the incoming deposits because they were viewed as fortress safe.”

“We didn’t have a contagion meltdown, and we sure as hell don’t want one,” Kotok added.

JPMorgan Chase did not immediately respond to the DCNF’s request for comment.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

We don’t take the weekends off.

This Friday’s episode of “Bury the Bombshell” features the collapse of another bank. Heartland Tri-State Bank in Kansas has officially gone under and is being gobbled up in a deal brokered by the FDIC.

According to their press release:

Heartland Tri-State Bank of Elkhart, Kansas, was closed today by the Kansas Office of the State Bank Commissioner, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect depositors, the FDIC entered into a purchase and assumption agreement with Dream First Bank, National Association, of Syracuse, Kansas, to assume all of the deposits of Heartland Tri-State Bank.

The four branches of Heartland Tri-State Bank will reopen as branches of Dream First Bank, National Association, on Monday, July 31, under normal business hours. This evening and over the weekend, depositors of Heartland Tri-State Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

Depositors of Heartland Tri-State Bank will become depositors of Dream First Bank, National Association, so customers do not need to change their banking relationship in order to retain their deposit insurance coverage. Customers of Heartland Tri-State Bank should continue to use their existing branch until they receive notice from Dream First Bank, National Association, that it has completed systems changes to allow its branch offices to process their accounts as well.

As of March 31, 2023, Heartland Tri-State Bank had approximately $139 million in total assets and $130 million in total deposits. In addition to assuming all of the deposits, Dream First Bank, National Association, agreed to purchase essentially all of the failed bank’s assets.

The FDIC and Dream First Bank, National Association, are also entering into a commercial shared-loss agreement on the loans it purchased of the former Heartland Tri-State Bank. The FDIC as receiver and Dream First Bank, National Association, will share in the losses and potential recoveries on the loans covered by the shared-loss agreement, which is projected to maximize recoveries on the assets by keeping them in the private sector. The agreement is also expected to minimize disruptions for loan customers.

Customers with questions about the transaction should call the FDIC toll-free at 1-866-431-1725. The phone number will be operational this evening until 9:00 p.m. Central Time (CT); on Saturday from 9:00 a.m. to 6:00 p.m. CT; on Sunday from noon to 6:00 p.m. CT; on Monday from 8:00 a.m. to 8:00 p.m. CT; and thereafter from 9:00 a.m. to 5:00 p.m. CT. Interested parties also can visit the FDIC’s website.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $54.2 million. Compared to other alternatives, Dream First Bank, National Association’s, acquisition was the least costly resolution for the DIF, an insurance fund created by Congress in 1933 and managed by the FDIC to protect the deposits at the nation’s banks.

Alarm Bells

The alarming part about this news is NOT that another bank has collapsed. As we’ve said since the banking system collapse started earlier this year, there will continue to be a sprinkling of small banks collapsing and being gobbled up by bigger banks until it turns into a full-blown system collapse, government bailout, and more importantly the dreaded “bank bail-in” through which banks can hold YOUR money.

The real alarm here is that the collapse was kept under wraps until the solution was ready to present. It’s as if the FDIC is mobilized to handle these situations so rapidly, the failing banks are sold before anyone even knows they’re failing.

That does not bode well for the system as a whole because it means they know more collapses are coming and they’re prepared to rapidly patch the holes until all of a sudden they cannot. This is probably a good time to link to our sponsored article, “3 Reasons Why Plain Old Gold and Silver Rounds and Bars Are the Best Protection If the American Economy Collapses.”

Heartland Tri-State Bank will not be the last to fall. It behooves every American to start solidifying their personal financial infrastructure outside of the banking system.

After the collapse of banks like Silicon Valley Bank and Signature Bank, many regional banks are trying to sell off their commercial real estate (CRE) loans, even if they have to do it at a loss, in hopes of avoiding a similar fate.

Wells Fargo is one such bank. It announced it would be downsizing its CRE portfolio and taking losses, while PacWest sold $2.6 billion in construction loans at a loss last month. Citizens Bank has put $1.8 billion worth of CRE loans for sale in recent months, while Customers Bancorp has placed $16 million of its current CRE portfolio for sale.

The stress seen in the commercial real estate sector right now is weighing heavily on banks and regulators alike, and it’s regional banks that are the most vulnerable. A Bank of America report shows that 68 percent of commercial real estate loans are currently held by regional banks. Moreover, estimates by JPMorgan Chase indicate that these types of loans account for an average of 28.7 percent of regional and smaller banks’ assets and that 21 percent of commercial real estate loans are likely to default, which could cost banks roughly $38 billion in losses, according to a report by Natural News. 

Commercial mortgages are currently facing multiple threats. Rising interest rates are making it costlier for borrowers to refinance while dwindling demand for office space as more people work remotely is causing credit concerns for landlords.

Additionally, the commercial real estate loans that originated ten years ago and are now coming due could put borrowers in a very unfavorable position. The average mortgage rates when these loans originated were 4.58 percent; they are now around 6.5 percent.

Delinquencies on commercial mortgage loans are already rising, with missed payments on commercial mortgage-backed securities jumping half a percent in May over April to hit 3.62 percent. The problem was particularly pronounced in offices.

A new crisis appears to be unfolding right now as the ruling class prepares by making manmade laws that control the use of money.

• The Endgame: Central Bank Digital Currency

Article cross-posted from SHTF Plan.

Elisabeth Kübler-Ross described five stages of grief: denial, anger, bargaining, depression, and acceptance. ‎On Twitter, describing the typical timeline for a banking crisis, Real Vision’s Raoul Pal posted:

It’s one bad apple,

Well maybe it’s just a few

“Banks remain strong”

It’s the evil short sellers (we are considering a ban)

Ok, now we are banning shorts

Oh, seems that didn’t work

Cut rates

That didn’t work

Panic

Change . . .

Kübler-Ross’s denial stage would include Pal’s “one bad apple,” “just a few,” and “Banks remain strong.” The anger stage would be “evil short sellers,” “banning shorts,” and it “seems that didn’t work.” The bargaining stage would be “Cut rates” and “That didn’t work.” Depression would be “Panic,” with “Change” being the acceptance stage.

We clearly appear to be only in the anger stage. Kimberly Adams writes for Marketplace:

The American Bankers Association is laying some of the blame for that at the feet of short sellers trying to scare people into thinking banks are about to go under so that the stock price falls and they can profit. On Thursday, the ABA sent a letter to the Securities and Exchange Commission asking the agency to look into the issue. . . .

“We’ve been in constant communication with our members, and they’ve shared with us their concerns, including engagement that they’ve seen on social media,” said Naomi Camper, chief policy officer at the ABA. “And many believe that their shares have been manipulated by short sellers. They’re seeing trading in their shares that defy the underlying fundamentals, and they’re worried about it.”

During the Q and A at Berkshire Hathaway’s annual meeting televised by CNBC, Warren Buffett mentioned a bank stock short-selling ban. Reuters reports that Wachtell, Lipton, Rosen & Katz, a law firm that has represented large companies, said in a letter to clients that “the Securities and Exchange Commission (SEC) should regulate what it defined as ‘coordinated short attacks’ by imposing a 15-trading day prohibition on short sales of financial institutions.”

Taking the other side of the argument is longtime bank analyst Dick Bove. Bloomberg reports: “‘The funds and others who are shorting bank stocks are doing the American public a meaningful service,’ analyst Bove said in a note. ‘They are winnowing the banking industry and forcing these companies to stabilize their financial statements.’”

Bove is right. The average depositor can’t make heads or tails of their bank’s financial statements. At least short sellers give John and Jane Q. Public a heads-up about their banks. Bank regulators are like the fire department, the hook and ladder doesn’t arrive until a house is fully inflamed.

If it plays out the way Mr. Pal believes, a couple more banks will fail, the Securities and Exchange Commission will impose a short-selling ban, and then a few more banks will fail. Then, it will be time for a Federal Reserve rate cut.

Reuters reports that the Fed futures market is factoring in a more than 70 percent chance of a rate cut at the Fed’s September meeting.

This summer may be an interesting one.

About the Author

Douglas French is President Emeritus of the Mises Institute, author of Early Speculative Bubbles & Increases in the Money Supply, and author of Walk Away: The Rise and Fall of the Home-Ownership Myth. He received his master’s degree in economics from UNLV, studying under both Professor Murray Rothbard and Professor Hans-Hermann Hoppe.

Article cross-posted from Mises.

At about 1 a.m. Monday, hours after the Federal Deposit Insurance Corporation had been expected to announce a buyer for the troubled regional lender, government officials informed JPMorgan executives that they had won the right to take over First Republic and the accounts of its well-heeled customers, most of them in wealthy coastal cities and suburbs.

But the resolution of First Republic has also brought to the fore long-running debates about whether some banks have become too big to fail partly because regulators have allowed or even encouraged them to acquire smaller financial institutions, especially during crises.

‘Regulators view them as adults and business partners,’ said Tyler Gellasch, president of Healthy Markets Association, a Washington-based group that advocates greater transparency in the financial system, referring to big banks like JPMorgan. ‘They are too big to fail and they are afforded the privilege of being so.’

He added that JPMorgan was likely to make a lot of money from the acquisition. JPMorgan said on Monday that it expected the deal to raise its profits this year by $500 million.

JPMorgan will pay the F.D.I.C. $10.6 billion to acquire First Republic. The government agency expects to cover a loss of about $13 billion on First Republic’s assets.

Normally a bank cannot acquire another bank if doing so would allow it to control more than 10 percent of the nation’s bank deposits — a threshold JPMorgan had already reached before buying First Republic. But the law includes an exception for the acquisition of a failing bank.”

Why should we care about this? Isn’t the massive graft of crony capitalism an everyday event? We should care because this takeover is just the tip of the iceberg. Our whole banking system might be insolvent. Manuel Garcia Gojon points out, “The taming of monetary policy necessary to slow price inflation has triggered a corrective trend in the valuation of financial instruments. Many big banks in the United States have substantially increased their use of an accounting technique that allows them to avoid marking certain assets at their current market value, instead using the face value in their balance sheet calculations. This accounting technique consists of announcing that they intend to hold such assets to maturity.

As of the end of 2022, the bank with the largest amount of assets marked as ‘held to maturity’ relative to capital was Charles Schwab. Apart from being structured as a bank, Charles Schwab is a prominent stockbroker and owns TD Ameritrade, another prominent stockbroker. Charles Schwab had over $173 billion in assets marked as ‘held to maturity.’ Its capital (assets minus liabilities) stood at under $37 billion. At that time, the difference between the market value and face value of assets held to maturity was over $14 billion.

If the accounting technique had not been used the capital would have stood at around $23 billion. This amount is under half the $56 billion Charles Schwab had in capital at the end of 2021. This is also under 15 percent of the amount of assets held to maturity, under 10 percent of securities, and under 5 percent of total assets. An asset ten years from maturity is reduced in present value by 15 percent with a 3 percent increase in the interest rate. An asset twenty years from maturity is reduced in present value by 15 percent with a 1.5 percent increase in the interest rate.

The interest rates for long-term financial instruments have remained relatively stable throughout the first quarter of 2023, but this may be subject to change as many of the long-term assets of recently failed Silicon Valley Bank and Signature Bank must be sold off for the Federal Deposit Insurance Corporation to replenish its liquidity. The long-term interest rate is also heavily dependent on inflation expectations, as with higher inflation a higher nominal rate is necessary to obtain the same real rate. It is also important to remember that the US Congress has persisted in not raising the debt ceiling for the government, which is currently projected to not be able to meet all its obligations by August. This could impact the value of treasuries held by the banks.

Other banks that may be close to an effective insolvency include the Bank of Hawaii and the Banco Popular de Puerto Rico (BPPR). The Bank of Hawaii’s hypothetical shortfall as of the end of 2022 already exceeded 60 percent of its capital. The BPPR has over double its capital in assets held to maturity. All three banks—Bank of Hawaii, BPPR, and Charles Schwab—have lost between one-third and one-half of their market capitalization over the last month.

It is difficult to say with certainty whether they are indeed secretly close to insolvency as they may have some form of insurance that could absorb some of the impact from a loss of value in their assets, but if this were the case it is not clear why they would need to employ this questionable accounting technique so heavily. The risk of insolvency is currently the highest it’s been in over a decade.

Central banks can solve liquidity problems while continuing to raise interest rates and fight price inflation, but they cannot solve solvency problems without pivoting monetary policy or through blatant bailouts, which could increase inflation expectations, exacerbating the problem of decreasing valuations of long-term assets. In the end, the Federal Reserve might find that the most effective way to preserve the entire system is to let the weakest fail.”

What is the answer to continued bank failures and insolvency? We need radical reform of the banking system, and the great Murray Rothbard has just what we need. “But in what sense is a bank ‘sound’ when one whisper of doom, one faltering of public confidence, should quickly bring the bank down? In what other industry does a mere rumor or hint of doubt swiftly bring down a mighty and seemingly solid firm? What is there about banking that public confidence should play such a decisive and overwhelmingly important role?

The answer lies in the nature of our banking system, in the fact that both commercial banks and thrift banks (mutual-savings and savings-and-loan) have been systematically engaging in fractional-reserve banking: that is, they have far less cash on hand than there are demand claims to cash outstanding. For commercial banks, the reserve fraction is now about 10 percent; for the thrifts it is far less.

This means that the depositor who thinks he has $10,000 in a bank is misled; in a proportionate sense, there is only, say, $1,000 or less there. And yet, both the checking depositor and the savings depositor think that they can withdraw their money at any time on demand. Obviously, such a system, which is considered fraud when practiced by other businesses, rests on a confidence trick: that is, it can only work so long as the bulk of depositors do not catch on to the scare and try to get their money out. The confidence is essential, and also misguided. That is why once the public catches on, and bank runs begin, they are irresistible and cannot be stopped.

We now see why private enterprise works so badly in the deposit insurance business. For private enterprise only works in a business that is legitimate and useful, where needs are being fulfilled. It is impossible to ‘insure’ a firm, even less so an industry, that is inherently insolvent. Fractional reserve banks, being inherently insolvent, are uninsurable.

What, then, is the magic potion of the federal government? Why does everyone trust the FDIC and FSLIC even though their reserve ratios are lower than private agencies, and though they too have only a very small fraction of total insured deposits in cash to stem any bank run? The answer is really quite simple: because everyone realizes, and realizes correctly, that only the federal government – and not the states or private firms – can print legal tender dollars. Everyone knows that, in case of a bank run, the U.S. Treasury would simply order the Fed to print enough cash to bail out any depositors who want it. The Fed has the unlimited power to print dollars, and it is this unlimited power to inflate that stands behind the current fractional reserve banking system.

Yes, the FDIC and FSLIC ‘work,’ but only because the unlimited monopoly power to print money can ‘work’ to bail out any firm or person on earth. For it was precisely bank runs, as severe as they were that, before 1933, kept the banking system under check, and prevented any substantial amount of inflation.

But now bank runs – at least for the overwhelming majority of banks under federal deposit insurance – are over, and we have been paying and will continue to pay the horrendous price of saving the banks: chronic and unlimited inflation.

Putting an end to inflation requires not only the abolition of the Fed but also the abolition of the FDIC and FSLIC. At long last, banks would be treated like any firm in any other industry. In short, if they can’t meet their contractual obligations they will be required to go under and liquidate. It would be instructive to see how many banks would survive if the massive governmental props were finally taken away.”

We must do everything we can to end our corrupt monetary system, which threatens to bring down our economy through runaway inflation and bank insolvency. We need to restore the gold standard and end the Fed.

About the Author

Llewellyn H. Rockwell, Jr. [send him mail], former editorial assistant to Ludwig von Mises and congressional chief of staff to Ron Paul, is founder and chairman of the Mises Institute, executor for the estate of Murray N. Rothbard, and editor of LewRockwell.com. He is the author of Against the State and . Follow him on Facebook and Twitter.

Article cross-posted from Lew’s Blog.

When the FDIC bailed out Silicon Valley Bank (SVB) and Signature Bank in March due to a systemic risk exception, depositors moved their money to the biggest banks in the country. “Larger banks mean larger bailouts,” Dr. Thomas Hogan, senior research faculty at the American Institute for Economic Research and former chief economist for the Senate Committee on Banking, Housing and Urban Affairs, told the DCNF.

“For example, JPMorgan Chase, the nation’s largest bank, just got a sweetheart deal from the FDIC to acquire failing First Republic Bank,” he said.

These developments and future ones will cause more consolidation in the sector. “Increasing the concentration in the banking industry simply increases the systemic risk,” E.J. Antoni, research fellow for Regional Economics at the Heritage Foundation’s Center for Data Analysis, told the DCNF.

“There were already concerns about concentrations of deposits in the banking industry, both because a few firms already held such a large portion of the deposits and because the number of banks in the country has been declining for years,” he said. “These concentrations spawned the ‘too-big-too-fail’ mentality.”

The largest 25 banks in the U.S. gained $120 billion in deposits while smaller banks lost $108 billion immediately following the SVB and Signature rescues, according to The Wall Street Journal.

Regional bank stocks have rapidly fallen since then. PacWest Bancorp, Western Alliance Bancorporation, Zions Bancorporation, Comerica Incorporated, and KeyCorp have all plummeted since March when the crisis began.

The biggest banks also expanded after the 2008 financial crisis because they were deemed too valuable for the economy to collapse, according to the WSJ. Their immense profitability enabled them to survive and prosper during the current regional bank turmoil.

Antoni added that the government will likely enact additional regulations following this crisis, thwarting competition.

“Regulation imposes costs on businesses, including banks, and those costs have to be paid for by the banks’ customers. Large banks are able to spread those costs out among more customers and so the per-customer cost of compliance is low relative to small and mid-sized banks,” he said. “Large banks are also more influential in the crafting of regulation, and are better positioned to steer any regulation in a direction that helps them while hurting their competitors.”

More regulations are not the solution and were one reason banks failed recently, Hogan told the DCNF.

“The banks that failed were mostly holding assets that the regulators deemed very safe,” he added. “The problem is that they were highly subject to interest rate risk, which the regulators ignored. … Bank regulators were asleep at the wheel, and their regulations have made bank failures worse, not better.”

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

Robert F. Kennedy Jr., who launched his presidential campaign last month, issued several warnings this week about the state of the U.S. economy, the banking crisis, and President Joe Biden’s cryptocurrency mining tax proposal. He is a nephew of President John F. Kennedy and a son of U.S. attorney general Robert F. Kennedy.

According to a report by Bitcoin News, Kennedy “Job openings plummeted for the third month in a row. Core factory orders dropped for the second consecutive month. Inflation is destroying the middle and working class. We need to turn our attention to rebuilding our nation,” his tweet further details.

Commenting on President Joe Biden assuring Americans on Monday that the banking system is “safe and sound,” Kennedy pointed out in another tweet that “bank stocks are crashing.” He stressed: “The American people deserve more than glib assurances and perception management.”

He added: “Bailouts create perverse incentives for banks to make reckless swings for the fences with depositors’ money, knowing they will pocket vast windfalls when they connect and that the taxpayer will bail them out when they miss.”

I understand the rationale for the rescue of First Republic Bank. The problem isn't this specific bailout. It's a system of too-big-to-fail institutions that requires bailouts in the first place. #Kennedy24

— Robert F. Kennedy Jr (@RobertKennedyJr) May 1, 2023

Ultimately the problem stems from an over-financialized economy. Finance is supposed to serve production, not replace it. We need to reinvest in the productive base: infrastructure, labor, health, social, and natural capital. #Kennedy24

— Robert F. Kennedy Jr (@RobertKennedyJr) May 1, 2023

“I understand the rationale for the rescue of First Republic Bank,” he posted. “The problem isn’t this specific bailout. It’s a system of too-big-to-fail institutions that requires bailouts in the first place.”

Regulators seized First Republic Bank on Monday and sold most of its assets to JPMorgan Chase.

President Biden assured us Monday that the banking system is “safe and sound.” Today, bank stocks are crashing. The American people deserve more than glib assurances and perception management. #Kennedy24

— Robert F. Kennedy Jr (@RobertKennedyJr) May 2, 2023

On Wednesday, Kennedy also slammed the proposed Digital Asset Mining Energy (DAME) excise tax. “Biden’s proposed 30% tax on cryptocurrency mining is a bad idea,” he tweeted, elaborating:

“Some advocate tight control of cryptocurrencies to prevent their use by criminals. But it isn’t just criminals who want privacy. So do dissidents and ordinary citizens,” he emphasized. “Governments harass their enemies and crush dissent by controlling bank accounts and payment platforms. Until we restore trust in government (a distant prospect) we need cash and crypto to ensure freedom.”

He means to be a good master, but he still wants to be our master. Government is slavery and there will be no freedom until there is no government.

Article cross-posted from SHTF Plan.

In the near term, a damaging combination of fast-rising interest rates, major changes in work patterns, and the potential of a recession could prompt a credit crunch not seen since the 2008 financial crisis. Even though Federal Reserve chair Jay Powell raised interest rates, he also said yesterday that the U.S. banking system is “sound and resilient.”

But it’s become glaringly obvious to anyone paying attention that the banking system in the United States is barely hanging on. The New York Times also says

Just in the past few months, Silicon Valley Bank, Signature Bank, and First Republic Bank have failed. Their combined assets surpassed those held by the 25 banks (when adjusted for inflation) that collapsed at the height of the financial crisis. While some experts and policymakers believe that the resolution of First Republic Bank on Monday indicates the turbulence in the industry is coming to an end, I believe this may be premature. On Thursday, shares of PacWest and Western Alliance are falling as investors’ fears spread. Adverse conditions have significantly weakened the ability of many banks to withstand another credit shock — and it’s clear that a big one may already be on its way. –New York Times

Regional bank shares have been plummeting in the past few days too. First Horizon shares took a 37% dive at today’s open, bringing its market cap down to around $5 billion, according to a report by Axios. 

• First Horizon Shares Crash After TD Bank Deal “Terminated”

Some are warning that this banking crisis is not only going to get worse, but it’s going to be the worst economic calamity human beings have ever seen.

• Gregory Mannarino: “Prepare For The Greatest Depression”

Pay attention and prepare. This entire economic system is on the verge of a total collapse, so the ruling class can bring in the fully controlled central bank digital currency that will permanently enslave all those who choose to participate in the new draconian system.

Article cross-posted from SHTF Plan.

By now, most of you already know about what has been happening to PacWest, Western Alliance, First Horizon and countless other regional bank stocks.  In all my years, I have never seen banking stocks fall so quickly.  If this avalanche continues to pick up momentum, pretty soon we will have to stop talking about a “banking industry crisis” and start talking about a “banking industry apocalypse”.

Ironically, I think that CNN has actually summarized the current state of affairs better than anyone else…

A summary of where things stand in the banking crisis:

The Fed: “Banks are fine.”

The Treasury: “Banks are fine.”

The banks: “We’re fine.”

Wall Street: “Everybody sell, the banks are on fire!”

On Thursday, PacWest released a carefully worded statement that was supposed to calm investors down…

Our message remains consistent with what was conveyed last week with earnings. As previously announced, the Company has explored strategic asset sales, including moving the $2.7 billion Lender Finance loan portfolio to held for sale in 1Q23. This planned sale remains on track and upon completion will accelerate our CET1 capital ratio to 10%+ (from 9.21% at 1Q23). Additionally, in accordance with normal practices the Company and its Board of Directors continuously review strategic options. Recently, the Company has been approached by several potential partners and investors – discussions are ongoing. The company will continue to evaluate all options to maximize shareholder value.

But instead this statement sparked a massive wave of panic and the stock dropped more than 50 percent…

The rout in regional banks picked up steam again on Thursday morning, with several stocks suffering sizeable losses.

PacWest sank 50.6% was halted for volatility multiple times. The slide began on Wednesday evening following news that the Los Angeles-based bank was exploring strategic options, including a potential sale.

Western Alliance was down 38 percent even though it pushed back very hard against a report by the Financial Times that indicated that a sale of the bank was being explored…

Western Alliance is exploring strategic options including a potential sale of all or part of its business, the Financial Times reported on Thursday citing two people briefed on the matter.

The Arizona-based bank has hired advisers to explore its options, the report added, saying the bank’s deliberations were at an early stage and might not come to anything.

And shares of First Horizon fell 37 percent when the market opened after their merger with Toronto-Dominion Bank fell through…

First Horizon Corp. shares plunged 37% at the cash open in New York, the most significant decline since September 2008.

Bloomberg reported First Horizon held a conference call earlier today, seeking to calm investors after the merger agreement with Toronto-Dominion Bank was “terminated.” The regional bank said it has ‘stable funding’ and adequate capital.

Those are the three big names that are dominating the headlines right now, but there are many more institutions that are teetering on the brink of insolvency.

In fact, one recent study determined that “186 more banks are at risk of failure”…

After the demise of Silicon Valley Bank and Signature Bank in March, a study on the fragility of the U.S. banking system found that 186 more banks are at risk of failure even if only half of their uninsured depositors (uninsured depositors stand to lose a part of their deposits if the bank fails, potentially giving them incentives to run) decide to withdraw their funds.

So what is the bottom line?

The bottom line is that things are bad, and now that the Fed has decided to raise interest rates again they will soon get even worse.

At this stage, very few banks are truly safe.  Depositors continue to pull money out of the system, bonds that are held by these banks continue to lose value, and more loans are going bad with each passing day.

This banking crisis is far from over.

In fact, it is just beginning.

Yesterday, Bill Ackman warned that our entire regional banking system “is at risk”…

The regional banking system is at risk. SVB’s depositors’ bad weekend woke up uninsured depositors everywhere. The rapid rise in rates impaired assets and drained deposits. Zeroing out shareholders and bondholders massively increased the banks’ cost of capital. CRE losses loom. Meanwhile, higher-yield, more user- friendly alternatives beckon @Apple.

The @FDICgov failure to update and expand its insurance regime has hammered more nails in the coffin. FRB would not have failed if the FDIC temporarily guaranteed deposits while a new guarantee regime were created. Instead, we watch the dominoes fall at great systemic and economic cost.

Banking is a confidence game. At this rate, no regional bank can survive bad news or bad data as a stock price plunge inevitably follows, insured and uninsured deposits are withdrawn and ‘pursuing strategic alternatives’ means an FDIC shutdown over the coming weekend.

He is mostly correct.

But I will quibble with him on one point.

Even if all deposits in the system are fully guaranteed, a lot of people will still be pulling their money out.

As Zero Hedge has aptly noted, many wealthy individuals are transferring funds from checking accounts that yield next to nothing to money market funds that pay around five percent…

People are not moving their money because of deposit loss fears: everyone already knows unlimited insurance is guaranteed, especially in blue states; they are moving because it takes 30 seconds to transfer from a 0.01% yielding checking account to a 5.1% money market.

The Federal Reserve could help the banks by cutting interest rates.

But that isn’t going to happen any time soon.

So brace yourselves for more bank failures.

Prior to the collapse of First Republic, Gallup conducted a survey that asked Americans if they are concerned about the money that they have in the banking system.

These are the results…

Amid turbulence in the U.S. banking system, nearly half of Americans are anxious about the safety of the money they have in accounts at banks or other financial institutions. A total of 48% of U.S. adults say they are concerned about their money, including 19% who are “very” and 29% who are “moderately” worried. At the same time, 30% are “not too worried” and 20% are “not worried at all.”

These findings are from a Gallup poll conducted April 3-25, the month after Silicon Valley Bank and Signature Bank collapsed. News about the failure of a third bank — First Republic — came after the poll was completed.

Needless to say, the events of the past couple of weeks are not going to help people feel any better.

Our banking system is in a tremendous amount of trouble, and this is just one element of the broader societal meltdown that we are currently witnessing.

I am extremely concerned about the rest of 2023.

And I am even more concerned about what 2024 will bring.

Events are starting to move very rapidly now, and very dark days are ahead.

Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.

Article cross-posted from The Economic Collapse Blog.