Bank Stability Discussion

 First, I'd recommend the three video-reports to view:

https://www.cnbcafrica.com/2025/why-some-of-americas-banks-are-at-risk-of-failing-cnbc-marathon/

https://finance.yahoo.com/news/list-failed-banks-2009-2023-170005906.html

https://www.americanbanker.com/list/4-banks-that-will-be-in-regulators-hot-seat-in-2025

Second, one of the better podcast folks who daily does a piece, and discusses banking problems...is Dan over at:

https://www.youtube.com/@IAllegedly/videos

Third, the commercial property issue (malls, stores, restaurants)...where no one seems willing to take them on (or buy from the banks)....STILL exists.  Banks hold the keys to the properties since owners gave up on leasing them out or selling (even if the pricing was half of the normal value).

Fourth, I noticed in the last day or two....Canadian banks are randomingly coming up and just telling folks....your account is to be closed.   No mention of reasoning.  Maybe there's too much debt?  Unknown.

Fifth, first bank failure of 2025....little discussed....but it was Pulaski Savings  Bank of Illinois.  FDIC says they had to pay out around $28-million to cover individual accounts.  Buyer for the bank?  No problem.....after FDIC covered the accounts.

Sixth, what barely got mentioned in the news....FDIC is taking around 17 executives of the Silicon Valley Bank (remember the first BIG failure).....to court.  They say the folks were fairly incompetent, and want to seizure funds that the folks have in their accounts.  Wishing them luck, but I suspect all will claim they were being deceived by 'someone'.  

Seventh, about a month ago....Franklin Street CEO Andrew Wright....did a talk and basically said....the big banks 'have no more runway to extend and delay the massive amount of real estate loan maturities'.  He didn't say a month or quarter....but that bank real estate crisis has to come and be dealt with.

Eight, I noticed two weeks ago....ALL-TIME high level of people paying just-minimum level on credit-card debt.  People are carrying around an enormous burden (car loans, credit card, insurance, home loan, student-loans, etc).   

Ninth, I'll point this out....the 4th largest bank in the US in 2008...was Lehmen Brothers.  At some point, the Bush folks made a decision that some banks could be saved....and Lehmens was too far gone to save.

I see this attitude likely to repeat....with at least one or two big banks (with connections in a large way to commercial real estate on their books)....being sliced up and sold to lesser banks.  The commercial property situation?  Wouldn't shock me if the US gov't takes possession and offers some public sale.

You might see mall with a 2020 value of $30-million....going to half-a-million.  Course....you'd be stupid to buy something with huge property tax issues, and limited ways to lease out the property or maintain it.

In the end, my general advice to 'survive' this mess?  Two things, remember the FDIC insurance is limited to $250,000 per bank. If you are exceeding that amount....go to some credit union, and move the excess to some savings or CD account.  

Second thing...for  the most part....credit unions seem relatively safe.  

Finally, if your knowledge over the 1929 crash is marginal....one book I recommend is 'The Great Crash' by Selwyn Parker.....written in 2008.  Prices at $2.99 on Kindle Amazon.  

There's also a excellent book that talks over the Florida  'land-boom'  of the 1920s....that led up to  the banking collapse....entitled: Florida Land-Boom of the 1920s, by Gregg Turner.  It is pricey on Kindle (around $20).  If you weren't aware....a lot of individuals went out and speculated....OVER and OVER.....getting hyped up during the build-up. 

The Thing About Bank-Runs

 I spent a fair amount of time in 2019/2020....reading various books over the 1920s, the Wall Street collapse in Oct 1929, the bank-run, and the depression-era of the 1930s.

What I had zero knowledge  over....was the bank-runs.  It made no sense.

So after reviewing a fair amount of data....I came to three observations.

1.  Banks up to this point (say 1929) had  zero oversight, So if the bank books said $400,000 existed in the vault.....they assumed the books were correct.

Over the years (decades)....various people (from the clerks to the bank Presidents)....took liberties to 'grab'  a twenty, or perhaps even a thousand....to pay a personal debt, or engage in the land speculation business of the early 1920s.

So you might have a bank with only 80-percent of the book amount existing.  Some banks were exceptionally bad.....some were marginally bad.  

Once the 'wave' started in 1929....banks saw the bank-run business as a problem....they couldn't square things up with both private members and business members.

2.  So we come to the limit business.

Banks figured that if you  told them new rules....folks would feel happy that you denied them their  life savings (say $2,000)....if you agreed they could take out $40 a month.  

The problem is....if you were a bicycle manufacturing plant, or a brewery....you needed to meet your payroll once a month....say in the range of $5,000.

It only took one or two months....for the banks to realize that no one was bringing fresh new cash flow into the bank.  It was strictly out-going.

3.  The Fed coming to save the banks?  No.   There are various reasons given to why the Fed was marginally helpful....but in the end, they were assuming that the banks weren't in that bad of shape.  

The bank-run laying out the path to the entire 1930s?  Once you established the fact that the banks could not be trusted....you prioritized things to acquire a safe for your company/business, and cash-flow to banks dwindled.  

Why I say all of this?  Well....at some point this year....you will see a bank-run in Russia.  Trust will dissolve over a couple of weeks, and people will put themselves into a cash-only situation....refusing to deposit any cash-flow.  You being a Russian company and trying to pay workers?  Things will rapidly dissolve into a mess.

Putin's value to commerce or working-class people?  If a grocery store won't accept anything but cash...trust will dissolve pretty quick.

The Intellectual Deficient Comment

 Is intellectually deficient....the same thing as retarded?

I sat and listened to a Trump Q-and-A, and  he said the intellectually deficient comment....avoiding 'retard'.

Typically, intellectually deficient means you have a serious learning issue, lack of problem solving ability and marginal ability to conduct judgement.

Based off all my years in school, and my military period....I can readily say that if you are intellectually deficient....it's not fixable or curable. If you are lucky....people around you will help along the way, and sometimes guide you make better judgement calls, or improve your results on problem solving.

Your identifiable IQ?  Typically LESS than 80.  

My general issues in terms of dealing  with such people?  It's hard to get these types into a focused vision.  They also make for the worst planners....always waiting till the damage is severe....before stepping in to resolve and plan your way out of a mess.

Putting such people into a job where decision-making is important?  No....you have to draw the line and just say that we need you....but we don't need you to be a manager or 'boss'.

It's just funny....after four years of President Biden....this topic now comes up.

Humble Views

 1.  I spent about 90 minutes yesterday....trying to watch MSNBC, CNN, Fox, and an assortment of news coverage over Elon and the Democrats shaking in fear.

It feels like some National Lampoon comedy movie.  

At the end of this Elon-adventure....I expect two things to occur. First, a bunch of lobbyists will begin telling Senators and House members....that the campaign-bucket is empty for 2026.....Elon 'swiped' the cash-flow.  Second, a bunch of people will appear on CNN and admit they were duped....some  kind of  attempt to say while they were robbing the gov't.....someone was robbing them.

2.  Google came out yesterday and offered up an 'exit-bonus'....for those who aren't committed.  

In a nice way....they are saying if you just showing up and marginally contributing....you might want to take the bonus and find real work.

The question is....are you smart enough to  grasp that for the past three years while you worked at Google....there's less than 100 man-hours that you really put into honest-work?

Then the last question is....once you take the bonus, and actually exit....then what?

3. Finally, you remember the TV show.....'Buffy, The Vampire Slayer' (1997-2001, 140-odd episodes)? 

Well....there's talk....it'll be coming  back.  

Somewhere out there.....there's probably even plans to bring Gunsmoke and Rockford Files back.

Three Obervations

 1.  I watch a number of podcast folks who cover the Russian economy.  One brought up the state of Russian banks....which have been a lot in the news since late 2024.

It appears that  for at least a year....Russian banks have been 'forced' to loan out money to munition-dealers and military-hardware companies.  These loans carried a 20-percentage rate.   

Well....as you might expect...the companies aren't being readily paid by the Russian gov't for their assets provided.

So....2025 is a dwindling situation.....the bank vaults are getting closer to a point where they would fail, and a 'bank-run' would occur.  How the gov't might act then?  I would assume they'd  print Rubles like hell....with the inflation jumping week-by-week.

A financial disaster?  It'd normally turn into a mess, and the World Bank would walk in and give them 'free-money' to rebuild their stability.  But I kinda doubt that Trump and associates would agree to that.

How long did this banking expert give the Russian banks?  He figured late-summer....the collapse would be obvious, and  printing/inflation would follow by the end of 2025.

What happens in 2026?  I'd say that financially....they will rate below Albania.

2.  This idea of shipping certain US prison 'members' off to El Salvador?  

I'm rather shocked that it's openly discussed now.  But I can't see them shipping more than 300.....just to test the 'waters'.

3.  I looked at CNN numbers this AM.....even worse since Christmas.  Some folks say another round of terminations have to occur.

I think they are trying to cheapen the situation enough....that you end up with a sell-off.

Just Pondering

 This week, I probably watched twenty-different video-reports....where stores, cafes, and restaurants were non-operational....because the illegal employees had gone to 'hide-out'.

I pondered over this.

If the guy/gal was illegal (meaning no paperwork)....that meant they should not have had a social security number...yet by the images, the store/restaurant is telling me they hired in a illegal fashion, and thus weren't  paying state taxes, fed taxes,  or social security.

If true?  Well...the managers need a month or two of jail.

So I'm waiting....has to be more to the story.

Observations

 1.  For roughly a decade, there's been a decline in the NBA audience....attributed to a dozen-odd things (high scores is one of them).

So I read this week....the NBA is discussing the idea of  running a 10-minute quarter...rather than 12-minutes.  Their belief....8 less minutes would mean some less scores (I would assume 8 to 15 points less for each team).

2.  There's not a single day that passes....where I don't see the term 'Nazi' uttered.   Oddly, even though they are socialists.....the term is applied to right-wing radical bad socialists (at least that's the pretend-game I'm watching).

3.  I watched Hillbilly Elegy this week (basic story of JD Vance, VP).  I'll just say....'Grandma' is the only reason why the kid succeeded in life.

4.  At some point shortly, I expect  the LGB-community to have a meeting, and escort the T/Q folks out...telling them to start their own 'club'.

5.  H.R. 899 is on the draft-board of the House of Representatives...reads: one sentence bill to TERMINATE the federal department of education.  Will pass the House....Senate, I'm not sure about.