Bank Stocks Fall As Banking Crisis Gets Worse

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Summary

➡ Regional bank stocks are dropping as their profits decrease. This is due to higher interest rates, which means they have to pay more on deposits. Big banks like JP Morgan and Bank of America are expected to take over these smaller banks as they struggle. This could lead to less competition and more control for the big banks.

Transcript

Hey, everybody, economic ninja here. Hope you’re doing well. Let’s do this right there. We’re going to talk about the regional bank stocks. They’re falling right now. Earnings are starting to come out and it’s going to get worse and worse and worse as this year goes on. Why, the news that I’m about to read you is coming on the heels of Jerome Powell’s remarks the other day. I did a video about it.

He killed expectations of a rate cut. Now even. It’s pretty much this whole year now, I do believe that they’re going to do something small and it’s going to spell disaster because it’s going to cause inflation to run much higher than it is now. And they’re going to do an about face. I say this over and over to prepare people, because when they happen, people will know where they heard it from.

Yeah. Okay, here we go. I’m thinking about a conversation I just had with somebody because it’s not worth it. It’s out of the Wall Street Journal. Regional bank stocks fall as earnings kick off with PNC M and T. Shares of regional banks fell after some of the larger players reported double digit profit declines in the first quarter. You know the. I don’t remember which thumbnail I used, but it was probably the one with Jamie Dimon.

And it says he knows. Jamie Dimon knows better than anyone, especially all of the large banks in our country know that as these regional banks fall, they are going to get blessed with the opportunity of absorbing the best of the best assets. They’re going to absorb the banks because the plan is to have less banks in our country. I know it sounds crazy for some people, but it’s really the truth.

Banks do not want competition. The central bank of our country, which are owned by the largest banks, they know that they can push monetary policy on you, shove it down your throat even easier if there are fewer choices out there, if there are fewer banks. So banks like JP Morgan, Wells Fargo, bank of America, as more of these banks collapse, they will simply absorb the bank, strip the best assets, one of which being the actual deposits, and they will take the crap assets and either the FDIC or they will package them up and sell them off to pension funds.

Do you understand this to be truth? There are a lot of people that can’t even fathom this, but I’m going to be honest with you. I live a really crazy life ever since I started a YouTube channel and I just said, hey, I’m not going to be the fancy guy. I’m going to be the guy that tells the truth and watch how the people in the know react.

And there are crazy conversations that I have with some people in the media and people in the industry because they don’t know what to do with people like myself that tell you, hey, this is coming because of this, this and this. And I hire this all the time. Like, how do you know that? I love messing with their minds. PNC Financial said net income fell 22% from a year earlier to 1.

2 billion, or $3. 10 a share. Analyst polled by FactSet expected a three dollar share income level come in at MT bank, net income dropped by a quarter to 505 million, the bank said Monday. That amounted to a $3. 02 a share, slightly above the $3. 01 that analysts forecast. Big WHOOP, right? Banks are broadly under pressure from higher rates, which cut into profits because they have to pay more interest on deposits, especially, especially at big but not huge midsize and smaller banks.

Let me tell you something the author’s not gonna tell you. That’s only one of the aspects. Yes. The money they’re borrowing is costing them more. So they’re either having to raise their costs of lending out to you or to businesses, or they are having to shrink their margins. Okay. And if they don’t shrink their margins, they find less borrowers. Okay. They’re adding fees and all this kind of stuff to try and stay afloat, but really it’s cutting into their profits.

The flip side that you’re not being told is they’re held to maturity bond portfolios. All of these banks bought bonds, long dated bonds, because that was the thing to do until the bond market imploded and we are seeing over a 300 year high. Or it was a 300 year cycle complete and the bond market’s imploding. And it’s funny that it doesn’t hit this mainstream. They don’t want people knowing how bad it is.

Now, none of these banks are officially taking losses until they sell these bonds. But just like it’s very similar or akin to what’s happening with CalstRs, the teacher pension fund taking a $30 billion loan, please hear me. Just to patch the holes in their CMBS portfolio, they have $318 billion of debt under management right now. So they took out an additional 10%. Okay, see, they don’t read that to you in the news.

They don’t want you to really know it. I don’t think people understand how serious this is because the US dollar is in severe destruction mode right now because of our bond market. Okay. Banks say they don’t expect relief anytime soon, especially with rates expected to be higher for longer. For the full year, PNC expects net income to fall between four and 5% from 2023. M and T raised its estimates for full year interest income slightly to 6.

8 billion or more in the results Monday, compared with more than 7 billion in 2023. Both banks also set aside more money for federal deposit Insurance Corporation fees related to the failures of signature bank and Silicon Valley bank last year. So I reported on this a while ago when the FDIC actually came out and said, we’re insolvent, we’re done. It was like last July went very underreported. See, people are like, well, you’ve been saying there’s a crash forever.

I’m like, I don’t, if you don’t get it, I don’t think you ever will. The FDIC sit there and solve it. They said regional banks and big banks have to pay more in insurance fees because we have no money. It’s done. We’re over. And so then the heads of those large banks, being Citigroup, bank of America, and JP Morgan, went to Congress arguing this, like, we can’t afford the extra insurance.

And the FDIC said, there’s no way the small banks can do it. They’re done. They’re completely insolvent. And the facts are right there. Everything’s imploding. You know, it’s like somebody saying, you know, how do you know that homes are crashing? And I said, the charts show it’s already down almost 8%. Well, yeah, but how? Like, they want more proof. And I’m like, okay, you want more proof? Copy.

So on a percentage basis, homes have already fallen median and average almost, almost as much as the entire zero eight crash combined. Right. The whole thing. Thank you so much, Mike, for the coffee money. And so you think about this, and you’re like, all right, so you need more proof. Okay, do you think employment’s gonna get any better in the near to midterm? No. Okay, do you think companies are just gonna miraculously print a bunch of new money and just give everyone a raise? Well, not unless you’re in California and you’re forced to do it.

Lead to a bunch of bankruptcies and restaurants closing. See, people just want more proof. More proof. And I’m like, I’m showing them charts, and they’re just like, no, I need more proof than that. And that’s exciting. When people lose their ever loving mind, that’s when people like you and me type one. If you’re one of them getting ready for this and you see it, you go, I got this.

It’s like arguing with a liberal. It’s like, I got this. Don’t worry, I don’t even have to argue with you. I already know I’m right. It’s just the sky is blue. Prove it to me. God. Yikes. This is where we’re at. And so we are in still a massive banking failure. Jerome Powell came out the other day and said, look, we. I can’t, I can’t raise, I can’t lower rates.

Like, you don’t get it. Like the, them raising the rates in the beginning of a, you know, and I don’t got a fancy whiteboard. Let’s just be real, or actually do, but I just don’t want to use it if you can’t understand the explanation. A whiteboard, it attracts the wrong kind of person. I want somebody that’s an outside thinker. Outside thinking is the only thing that makes you rich.

You know, it’s so true. It’s the only thing that makes you stupid wealthy. Being an outside thinker, if you think like the masses, you get what the masses get. That’s how it works. But just explain it without a whiteboard. In the beginning of an inflationary crisis. This happens through all of modern history with modern banking tools. When inflation’s picking up and a central bank goes, ah, crap, we’re going to be caught.

Because the only reason inflation’s going up is because of the things we did as a central bank, right? We did it. We either lowered rates or we printed more money. And either way, actually we print more money. Because when you lower rates, people take out loans. And in a fiat system, people just go out, take out loans and poof, out of nowhere, it’s like pulling money out of Jerome Powell’s butt.

Like, check it out. Anyway, my point being, or I wouldn’t. So it’s our fault. It’s the central bank’s fault. So what we do is we’re gonna start raising rates. Well, if you don’t raise rates high enough, fast enough, quick enough, just bam, like that, right? Hold on, Mary, I’ll get to that in a second. If you don’t do it fast enough, what happens is the masses panic in and they buy more stuff.

And then you’ve got the added cost of inflation causing goods and services to go up, and then you’ve got the interest rates because they’re ticking up little by little, adding costs, and because the masses don’t see the crash going, oh, crap, this is going bad. They keep buying at a higher rate because borrowing costs are now tacked onto that and it exacerbates the problem. Right? So if Jerome Powell would have immediately came out and says, hey, we’re raising rates, sorry, it’s going to hurt.

This is going to suck. But just like, you know, his predecessor did, you know, essentially doubling the fed funds rate back in 1979 to 1980, we’re going to make this happen. He went slow and now he’s like, oh, crap, economic activity is still there and it’s hurting more because it’s costing more. Now. We’re going to just stay higher for longer. That’s the coward’s way out, okay? That’s the cowards way out.

It takes a real set of cajones to go, hey, we’re going to, we’re going to run this thing up 300 to 500 basis points right now. We got to do it and we got to slow. We got to, we got to smack everybody in the face monetarily. Stop your, stop your borrowing. Out of control spending. You guys are spending like drunken sailors. He didn’t do that. So now the whole world’s watching and what’s happening is Russia and China are watching the US destroy its dollar slowly and they’re reaping the rewards.

They’re out buying gold so fast that China’s buying it so fast they had to shut down their markets, their ETF market, because the buying frenzy is getting out of control because they’re converting dollars to gold. I wonder who saw this coming. Let me get to that comment, actually, if I can. Mary says, dear Ninja, you should have your followers check out decrypting money with Anthony Jeffries. It helps you to understand crypto.

So I don’t know who that is, to be honest with you, but if you guys want. I’m doing that. Course, I’ve never heard of that person, so I can’t, you know, say they’re good or bad. The crypto trader pro, course, it’s down below the pre filming. It should be all filming, should be wrapped up and edited and done in a week and a half, and then that price will never be there if you guys want it or you don’t have to, it’s totally good.

I hope you guys got something from this. This is a big deal that’s happening right now in the banking sector, and I’m excited to be warning people about it. It just blows me away. Still, home prices are falling and everybody just looks in their hometown. They don’t look at the bigger picture and just, you know, the billionaires look at the big picture. So do you want to start having a billionaire mindset, or are you still trying to get to the million? And I know that that probably pisses some people off because they just want to get to a million, but you’ll never get to a million till you start thinking about a billion type two.

If you agree with that, you’ll never hit the moon unless you shoot for the stars. It’s the same thing. Thank you so much for watching. The economic ninja is out. .

See more of The Economic Ninja on their Public Channel and the MPN The Economic Ninja channel.

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Bank of America acquiring smaller banks big banks gaining control consequences of bank mergers decrease in bank profits effects of bank consolidation impact of higher interest rates on banks increased deposit costs for banks JP Morgan takeover of small banks less competition in banking sector regional bank stocks dropping

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