U.S. banks are reporting record-high losses on held-to-maturity assets, reflecting concealed financial distress, and delinquency rates for credit cards have surged to levels not seen since 1991, signaling growing consumer financial strain. The question now looms whether the Fed can prevent an impending recession amid these concerning economic challenges.
U.S. Bank losses on held-to-maturity assets have soared to an ALL-TIME HIGH of $400 Billion. Probably fine pic.twitter.com/sFZyNAOjIl
— Barchart (@Barchart) October 30, 2023
Seems most banks are hiding catastrophic losses right now. Once their ability to access liquidity evaporates (Fed rug pull) it's game over 👇 t.co/OG34puhkzb
— Financelot (@FinanceLancelot) October 30, 2023
Bad loans are becoming a real problem for regional banks
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Office buildings in southern California. A healthcare operator in the Northeast. A bankrupt oil-and-gas company in the Atlanta suburbs.
These were among the assets that became the source of lending problems for regional banks in the third quarter as corporate borrowers and commercial real estate began to show more signs of strain.
In recent weeks many mid-sized financial institutions across the country reported that nonperforming loans, a measure that tracks borrowers that are behind on their payments, rose during the third quarter. They also disclosed mounting costs from unpaid debts written off as losses.
Of 18 regional banks analyzed by Yahoo Finance with assets ranging from $50 billion to $250 billion, 15 reported jumps in nonperforming loans when compared to the same year-ago period. The average rise was 80% more than the third quarter of 2022, and up 8% when compared to the second quarter of this year.
Charge-offs — a measure of unpaid debts written off as losses — also rose at 15 of the 18 banks compared with the same year-ago period.”
Every generation has it‘s bubble, it’s so simple. Human nature doesn’t change, only the bubbles change. pic.twitter.com/x0WD3wmVi3
— Michael A. Arouet (@MichaelAArouet) October 29, 2023
Credit card delinquencies are now rising at their fastest pace since 1991.
Since 2022, credit card delinquency rates are up almost 60%.
To put this in perspective, even at the peak of the 2008 crisis the growth rate in delinquencies did not pass 50%.
Meanwhile, the delinquency… pic.twitter.com/5IKh4FWsNE
— The Kobeissi Letter (@KobeissiLetter) October 29, 2023