To: Maple MAGA who wrote (1461451 ) 6/8/2024 6:16:25 PM From: FJB 2 RecommendationsRecommended By
Respond to It's The Fed That's A Risk To Financial Stability Central bankers whistle ‘Dixie’ as mark-to-market losses dramatically shrink the banking system’s economic capital... Mr. Barr reported that banking “capital ratios increased throughout 2023.” He failed, though, to discuss the mark-to-market losses that have dramatically shrunk the banking system’s economic capital and capital ratios. $1 trillion mark-to-market loss resulting from the move to normalized interest rates.Since that loss is equal to half of the banks’ approximately $2 trillion in book value of tangible equity, their aggregate real capital has dropped by about 50 percent. This is just in time for them to be confronted with large potential losses from that classic source of banking busts, commercial real estate, as the prices of many buildings are falling vertiginously. proclaimed that the Fed would “give such stability to the banking business that extreme fluctuations in interest rates and available credits… will be destroyed permanently.”
