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Bank Failures Visualized

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Re: Bank Failures Visualized

#181

Post by SamReidHughes »

coliveira wrote: post #65
photochemsyn wrote: post #54

Earlier quoted context omitted.

This is a rather skewed perspective that ignores the fact that if you have FDIC insurance for depositors then that can be gamed unless you have strict regulation of the banks: > "The roots of the S&L crisis lay in excessive lending, speculation, and risk-taking driven by the moral hazard created by deregulation and taxpayer bailout guarantees." https://www.investopedia.com/terms/s/sl-crisis.asp This is why a lot of p…

They're just the tip of the iceberg. Pretty much all medium size banks have lots of underperforming assets, and they're just one minor mistake from going under, like these 3 banks. Also notice that there are still many shoes to drop: comercial real estate (a disaster waiting to happen), car loan defaults, etc.

Keep in mind that car loans get paid down pretty fast. For example, Capital One's <620 FICO customer segment has already paid off about half the auto loan principal from 2021. Their delinquency rate has flattened, quarter over quarter, as well.

Re: Bank Failures Visualized

#182

Post by nologic01 »

theteapot wrote: post #154
nologic01 wrote: post #148

It 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…

> There is at this point a remarkable absence of small bank failures. Not sure it's that remarkable? 1. not adjusted for inflation as others have commented. 2. There are less banks in the US, maybe up to 1/2 as many as in 2008 ( https://www.statista.com/statistics/184536/number-of-fdic-in... ). 3. You may only be seeing the leading edge of something similar to 2008-2010 range - too early to tell.

For a qualitative discussion of what might be happening inflation is a just a nuisance factor. There are other similar factors (e.g the size of the economy is not constant either) that we can ignore for this purpose.

The bank size distribution is more relevant but 50% of a large number is still a large number. You'd expect this to somehow show up in the statistics.

Timing is indeed a key aspect. The actors involved have quite a bit of discretion and options and it takes time for all these to play out. But if it does transpire that small banks are not as seriously affected as in the last crisis and its more of a "middle class" bank disease this would be a strange new thing.

Re: Bank Failures Visualized

#183

Post by NoboruWataya »

ajross wrote: post #132
kypro wrote: post #79

Would 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.

I can understand why these banks were omitted but it completely changes the picture. Lehmans and Bear Stearns were the bank failures of 2008.

Re: Bank Failures Visualized

#185

Post by theteapot »

nologic01 wrote: post #182
theteapot wrote: post #154

Earlier quoted context omitted.

> There is at this point a remarkable absence of small bank failures. Not sure it's that remarkable? 1. not adjusted for inflation as others have commented. 2. There are less banks in the US, maybe up to 1/2 as many as in 2008 ( https://www.statista.com/statistics/184536/number-of-fdic-in... ). 3. You may only be seeing the leading edge of something similar to 2008-2010 range - too early to tell.

For a qualitative discussion of what might be happening inflation is a just a nuisance factor. There are other similar factors (e.g the size of the economy is not constant either) that we can ignore for this purpose. The bank size distribution is more relevant but 50% of a large number is still a large number. You'd expect this to somehow show up in the statistics. Timing is indeed a key aspect. The actors involved h…

> a strange new thing.

Indeed. ZIRP was a new thing [1]. My laymen understanding is these big banks got caught out making really stupid (in hindsight anyway) bets interest rate would stay near zero and ran into liquidity issues.

Is there a reason small banks wouldn't also make stupid bets like this? Maybe they have less money slushing around that isn't in loans or something.

[1]: https://time.com/4180698/nouriel-roubini-global-economy/

Re: Bank Failures Visualized

#186

Post by blowfish721 »

johnvanommen wrote: post #142
bboygravity wrote: post #42

Earlier quoted context omitted.

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.

There’s a good podcast (American Scandals) covering that. https://podcasts.apple.com/se/podcast/american-scandal/id143...

Re: Bank Failures Visualized

#187

Post by yieldcrv »

themagician wrote: post #177
yieldcrv wrote: post #20

Earlier quoted context omitted.

If you like absurdity, FTX has recovered 7.3 billion out of the 8.6 billion hole and plans on relaunching the exchange to make the last billions back in fees Most noteworthy is that this quick 8 month turnaround is partially thanks to the blockchain, and under no new laws being passed

It's not about the money, it's about the message. It's about running a global financial institution on Quickbooks. It's about not having a bank account. It's about not having stop losses. It's about wiping out losses by making your own money. It's about TOM BRADY. It's about the Larry David ad that ends, "Ehhhhh, I don't think so. And I'm never wrong about this stuff. Never." FTX really elevated fraud to an art. I'm…

for me its more about how much this mismanaged business shook confidence in "crypto", instead of just this mismanaged business - the way we would judge any other sector. while the crypto aspect is helping resolve this far faster than other insolvent schemes of similar size and magnitude.

and Sam Bankman Fried is not involved in that.

yes, Sam did that elaborate thing, the people recovering and the bankruptcy court are not Sam.

Re: Bank Failures Visualized

#188

Post by themagician »

yieldcrv wrote: post #187
themagician wrote: post #177

Earlier quoted context omitted.

It's not about the money, it's about the message. It's about running a global financial institution on Quickbooks. It's about not having a bank account. It's about not having stop losses. It's about wiping out losses by making your own money. It's about TOM BRADY. It's about the Larry David ad that ends, "Ehhhhh, I don't think so. And I'm never wrong about this stuff. Never." FTX really elevated fraud to an art. I'm…

for me its more about how much this mismanaged business shook confidence in "crypto", instead of just this mismanaged business - the way we would judge any other sector. while the crypto aspect is helping resolve this far faster than other insolvent schemes of similar size and magnitude. and Sam Bankman Fried is not involved in that. yes, Sam did that elaborate thing, the people recovering and the bankruptcy court ar…

It really didn’t though. Crypto is the never ending, infinite ponzi. It’s unshakable, unsinkable. The hype is real.

What Sam did was elevate things. Anyone can run a crypto scam. Literal kids do it. But to create art is something else. Something more human. Something timeless. SBF is perhaps the ultimate use case for crypto.

I had about $100 in FTX. Worth it. Totally worth it.

I’m stoked for the Coinbase collapse. My body is ready. Jesus, take the wheel!

Re: Bank Failures Visualized

#189

Post by ricardobeat »

yieldcrv wrote: post #176
RC_ITR wrote: post #170

Earlier quoted context omitted.

What does that have to do with decentralized consensus? You know, the core differentiating feature of cryptocurrency.

it doesn’t and that wasn't the premise of why we can acknowledge that using that payment network saved everyone time in the clawbacks, despite the shaken confidence that the exact same event caused into that payment network the main distinction involved here is that not knowing who to subpeona for records slows down everything, whereas with the blockchains used most of the participants consolidate funds into KYC’d ex…

In other words, blockchains make it easier to track what we are doing with our money, without the justice system being involved, and that’s somehow good.
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