Jesus Tap-dancing Christ
Bank Failures Visualized
141–150 of 424 posts
Re: Bank Failures Visualized
#142Earlier quoted context omitted.
I have faith that we can top S&L. We have the technology. We have the talent. There are six banks with over a trillion in assets in the US. I have faith that one of them has been doing some wild book cooking. I'd place a bet on Citibank, followed by Wells Fargo. There's an old saying in Tennessee — I know it's in Texas, probably in Tennessee — that says, fool me once, shame on… shame on you. Fool me… you can't get fo…
JP Morgan is the biggest one. It can do ANYTHING it wants and get away with it. It can make 10 billion USD spoofing gold prices for a decade and get away with a 1 billion USD fine (and keep doing it) for example. The CEO can go on trips with Jeffrey Epstein, be friends with him and do business with him and get away with it. It made tons of money off of the Madoff ponzi by providing Madoff with a bank account and not…
There was a hedge fund manager / college professor from Irvine CA who figured out Madoff's scam in the 90s, and nobody paid attention to him whatsoever.
Re: Bank Failures Visualized
#143Earlier quoted context omitted.
> we have been repeatedly told that banks are good and they learned a lesson in 08 This is a wholly different lesson. In 2008, banks were making bad investments. In 2023, the changing interest rate environment caused good investments to become worth less than their original value. If held to term, things would be fine, but liquidity issues put stress on the system. These are not the same, and we have better means of…
What lesson are they going to learn? Go big or go home? I don't foresee any kind of legislature becoming law over this, especially with our divided government.
That banks need better capital planning and regulations around it need to be tighter.
Re: Bank Failures Visualized
#144Jesus Tap-dancing Christ
I’m stealing this excellent phrase.
Re: Bank Failures Visualized
#145Would be slightly more insightful if it was inflation adjusted. The circles on the right should be ~30% smaller.
It's also leaving out non-FDIC bank failures like Lehman, Bear Stearns et. al. which would make the '08 crisis much (MUCH) larger. Basically post-2008 the class of "investment banks" basically disappeared. But none of that is shown in this chart.
They didn't hold deposits. So it's kind of reasonable. They are called "bank" but they aren't the same kind of institution.
Re: Bank Failures Visualized
#146Earlier quoted context omitted.
And if the circles’ areas, not their radii, were the failed assets. As it is, a circle’s apparent size (we judge 2D shapes by their area, not any one linear dimension — although this is difficult to do in practice, and linear marks are generally superior) is the failure size squared , which distorts the data a boatload. Here is a, er, more faithful representation of the data. The recent failures don't look quite so c…
The circles' areas are showing the failed assets. Observable Plot defaults to using a square root scale when encoding a quantity with the radius of a circle. https://observablehq.com/plot/marks/dot#dot-options
You'd think that radius meant radius, but that'd be too simple.
Re: Bank Failures Visualized
#147Weird part about this whole thing is, we have been repeatedly told that banks are good and they learned a lesson in 08. Now both tech and banking are in trouble again.
> we have been repeatedly told that banks are good and they learned a lesson in 08 This is a wholly different lesson. In 2008, banks were making bad investments. In 2023, the changing interest rate environment caused good investments to become worth less than their original value. If held to term, things would be fine, but liquidity issues put stress on the system. These are not the same, and we have better means of…
I strongly disagree, the current mess is largely caused because some banks didn’t anticipate interest rates going up from historic lows. That’s profoundly bad risk management. A child could have done better.
Re: Bank Failures Visualized
#148It makes perfect sense to focus on events defined in a uniform way across the dataset (in this instance US FDIC insured bank failures). Otherwise what you are depicting is an arbitrary collation of events that may have very different causes.
What I derive from the visualization (btw Bostock is a genious) are a couple of simple yet still tentative observations:
* A new cluster of failures might be forming. The pattern of correlated failure is not new and it may point to similar business models and/or exposure to the same factors. Measurable correlation may also imply some level of contagion. This is defined as one event increasing the chances of another (after conditioning on common factors). But it is anybody's case what the fully developed phenomenon will look like. Three events is still small number statistics. Dont run an AI model on this.
* There is at this point a remarkable absence of small bank failures. If this persist it hints that it is actually not the vanilla banking model (and poor risk management) that underlies what is happening, but more idiosyncratic factors that are specific to a few actors. In some sense that would be good news.
One thing is for sure. The crisis will be properly visualized.
Re: Bank Failures Visualized
#149That needs to go back to the 80s to capture the SnL crisis. It dwarfs 08 in bank failures. It better indicates the conglomeration of the many banks into the few we have today.
I wrote a post about this. The frequency of failures was much higher but the individual failures were smaller:
https://yarn.pranshum.com/banks2
Re: Bank Failures Visualized
#150Earlier quoted context omitted.
Are you sure about that $7.3 billion? Last I checked, SBF was counting illiquid nonsense like Serum and MAPS tokens in that number.
SBF is not involved, its the new management and the bankruptcy court https://www.reuters.com/technology/bankrupt-crypto-exchange-...
I’d like to see a list of those assets because this one consisted of a bunch of garbage tokens largely worth nothing.
https://cryptoslate.com/breakdown-of-current-ftx-assets-show...
The top token in that list, Serum, listed as worth $1.9 billion, had a trading volume of only $2 million yesterday on Binance. -2% depth is $60,000 lol.