Important Takeaways:
- Long Bonds’ Historic 46% Meltdown Rivals Burst of Dot-Com Bubble
- Losses on longer-dated Treasuries are beginning to rival some of the most notorious market meltdowns in US history.
- Bonds maturing in 10 years or more have slumped 46% since peaking in March 2020, according to data compiled by Bloomberg. That’s just shy of the 49% plunge in US stocks in the aftermath of the dot-com bust at the turn of the century. The rout in 30-year bonds has been even worse, tumbling 53%, nearing the 57% slump in equities during the depths of the financial crisis.
- [In short the last time the yield on 10 year bonds rose to this level was “just before the 2008 financial crisis”]
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Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”
Important Takeaways:
- Ominous Omen From ‘Oracle of Omaha’? Buffett Unloads Billions in US Stocks, Warns of AI ‘Atom Bomb’
- The 92-year-old financier has a penchant for sniffing out financial trouble, and has made it his hedge fund’s business to seek out opportunity in times of hardship. With US markets on edge over the prospect of more bank failures and Congress arguing about the debt ceiling, Buffett has issued fresh warnings about America’s possible economic future.
- Buffett said he was not surprised that the US has been facing a string of bank failures recently, given how complex the banking sector has become, and the “dumb” decisions made by some bankers.
- “The American public doesn’t understand their banking system – and some people in Congress don’t understand it anymore than I understand it,” the tycoon, whose company began a selloff of US bank stock from 2020 onward, but is holding on to a 13 percent share of Bank of America and a 2.8 percent share in Citigroup, said.
- Buffett also warned that bank runs are becoming easier in the modern world thanks to technology, with the speed at which information travels and the opportunity to withdraw deposits virtually meaning that nowadays, “you could have a run in a few seconds.”
- Buffett also offered a grim warning about the rise of artificial intelligence capable of replacing human beings in many roles, comparing the technology to the atomic bomb and saying it cannot be “un-invented.”
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Revelations 18:9-11 “The kings of the earth who committed fornication and lived luxuriously with her will weep and lament for her, when they see the smoke of her burning, 10 standing at a distance for fear of her torment, saying, ‘Alas, alas, that great city Babylon, that mighty city! For in one hour your judgment has come.’ 11 “And the merchants of the earth will weep and mourn over her, for no one buys their merchandise anymore
Important Takeaways:
- US Banking Crisis Worsens With Half Of America’s Banks On the Verge Of Failure
- The recent sharp decline in shares of major U.S. regional banks has sparked fears of another banking crisis. The collapse of First Republic Bank, the largest U.S. bank failure since 2008, has sent shockwaves through the financial sector, prompting experts to warn that a “confidence crisis” could happen to any bank in the country.
- Investors have reacted quickly to the news, with shares of PacWest Bancorp, Western Alliance Bank, and KeyCorp plummeting by as much as 30%, 21%, and 10%, respectively. The KBW Regional Banking Index has also taken a hit, falling by 5.2% and its lowest since December 2020.
- Mario Nawfal, a renowned financial expert, has expressed concern over the recent plummeting of bank shares in major U.S. regional banks, signaling a deepening banking crisis in the country.
- Nawfal warns that if a confidence crisis can happen to the First Republic, it can happen to any bank in the country. He attributes the current state of the US banking industry to “insatiable greed and reckless” money printing, which have had dire consequences. The collapse of First Republic Bank is just the tip of the iceberg, and things could get much worse if the Federal Reserve doesn’t pivot, Nawfal claimed
- Furthermore, according to The Telegraph, The US Federal Reserve has begun a two-day meeting to determine whether it should raise its benchmark lending rate for the tenth time.
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The chief executive of Barclays is out after allegations that he was involved with a scheme to manipulate interbank lending rates. Although the government could not produce evidence that Bob Diamond was personally involved with the scheme, Diamond was encouraged to resign to keep from “damaging the franchise.”
The resignation comes a week after Barclays bank was fined over $455 million for attempting to manipulate the rates that banks lend money to each other. Shares for the bank fell over 15% following the announcement of the attempted manipulation. Continue reading →
Moody’s marked down several major banks including Citigroup and Bank of America in the United States and Royal Bank of Scotland, Barclays and HSBC in the United Kingdom. Lloyds of London also had their ratings cut.
In addition to Citigroup and Bank of America, Morgan Stanley, JP Morgan Chase and Goldman Sachs were issued downgrades. Continue reading →
Moody’s cut the credit ratings of Belgian and Dutch banks, attributing the cuts to the current euro zone crisis.
“Dutch banks will face difficult operating conditions throughout 2012 and possibly beyond,” Moody’s told the BBC.
Long-term ratings were cut at least one level with most getting cut two levels. Continue reading →
Optimism about Spain’s banking bailout is fading fast after reports that Spain’s borrowing costs have risen to the highest point since the creation of the euro.
The benchmark 10-year bond yield peaked at 6.81%. The news created some ripples throughout the European Union as Italy’s 10-year bond yield hit 6.28%, the highest rate since January. Continue reading →
Despite Spain’s insistence that a bailout was not imminent, a Dutch official leaked out word that emergency bailout talks could take out place this weekend.
Dutch finance minister Jan Kees de Jager told the BBC the situation in Spain was “urgent” and alluded to emergency talks. EU officials have officially stated that Spain would not be asking for emergency funds as early as Saturday. Continue reading →
Another member of the euro zone is on the verge of needing an EU bailout.
Cyprus has directly impacted the debt load in Greece due to loans taken from it’s banking system.
“The possibility of addressing financial stability mechanisms to support the banking system, due to the problems created by excessive exposure of banks to Greece, is a serious responsibility,” Cyprus spokesman Christos Christofides told a press conference. Continue reading →
Amid concerns about looming bank failures in Spain, the European Commission is proposing providing bailout funds to banks directly rather than going through individual governments.
Commission head Jose Manuel Barroso cited the need for flexibility and speed in sending the funds directlyto banks. Also being placed on the table is a debate about creating a “banking union” similar to the Euro Zone.
Continue reading →
