Bank Closures: Sign of coming Resession?

[canadyjd]

Last Friday (3-10-23) a bank in California revealed it can’t cover investors costs. Two days later, a bank in New York was seized by the state.

This is, as I understand it, the direct result of huge amounts of money through congressional bills being passed causing inflation… higher interest rates by the fed to lower inflation…. and speculation on the part of the banks lending money to risky start up companies.

Please make a prediction of where this county’s economy will be by the end of summer (late September)

 

[JonC]

I wouldn't say either bank closed because of recession indicators. Instead both look like they had bad (and risky) strategies.

 

[canadyjd]

I wouldn't say either bank closed because of recession indicators. Instead both look like they had bad (and risky) strategies.

Thanks for the comment.

Do you think the pouring of huge amounts of cash into the economy contributed to the reckless speculation?

I think much of the cash was specifically designated to green energy and equity projects.

peace to you

 

[JonC]

Thanks for the comment.

Do you think the pouring of huge amounts of cash into the economy contributed to the reckless speculation?

I think much of the cash was specifically designated to green energy and equity projects.

peace to you

Dunno.

 

[canadyjd]

Dunno.

I guess we will find out in the coming months…. I hope.

The banks put investor money in long term treasury bonds when interest rates were very low.

They loaned money for high risk projects in “green” energy and equity (whatever that means).

The investors can’t make payroll because no one is buying their products, they needed to borrow more money. The banks had to sell their treasury notes at a loss (because of higher rates) to cover the loan requests.

If the companies can’t make payroll, they lay off employees or go into bankruptcy protection.

I really do fear this is the beginning of the reckoning for our 32 Trillion debt.

peace to you