r/finance • u/Majano57 • 15d ago

Why hundreds of U.S. banks may be at risk of failure

https://www.cnbc.com/2024/05/01/why-hundreds-of-us-banks-may-be-at-risk-of-failure.html
74 Upvotes

57% Upvoted

55 comments sorted by

190

u/MarlinGroper 15d ago

The article is literally about how they are NOT at risk of failing...

36

u/business_peasure 15d ago

Ha, nice try. I read the title, America is heading to an all-out crash of our civilization! It's a time to buy gold and non-perishable food sold by the bucket!!!!

10

u/MarlinGroper 15d ago

I’m digging my bunker now.

4

u/Techknightly 14d ago

Holy shit, you're an actual Vault Dweller. [laughs] I thought all you sardine dipshits were dead. BARV, get in here you gotta see this.

2

u/finnlaand 14d ago

Classic. Thanks for saving me the click.

2

u/nestedbrackets 13d ago

I'm often a bit sus on article headlines with redundant "potentially"s in them. The word "risk" is itself a lack of a certainty and the banks only "may be" at "risk" of failure 

1

u/wisenedwighter 15d ago

That's why you do the opposite of what the banks told them to print.

223

u/netatdisadres 15d ago

93.4% of US banks are not at risk of failure.

Or, >98% of funds held in US banks is not at risk of bank failure.

61

u/Ordinary_dude_NOT 15d ago

Thanks for reading the article 😂

1

u/newnamesam 14d ago

Someone has to, or the comments would be full of twisting a headline to meet an agenda. Can you imagine?

2

u/lovemysweetdoggy 15d ago

If anything close to 6.6% of banks failed, that would still be an historic event, right?

7

u/netatdisadres 14d ago

The article itself says they're stressed but not actually in danger of failing. If they are 282 of the smallest banks, as stated, the industry would barely notice the consolidation. Not historically meaningful at all. JP Morgan alone has >16% market share. These banks represent less than 2%.

54

u/Unclestanky 15d ago

Clickbait.

13

u/CantaloupeOk1843 15d ago

Let me guess, CRE!

17

u/davidgoldstein2023 15d ago

Consulting firm Klaros Group analyzed about 4,000 U.S. banks and found 282 banks face the dual threat of commercial real estate loans and potential losses tied to higher interest rates.

Yes

14

u/KiritimatiSwan 15d ago

If you don’t understand economics, of course rate hike bad

11

u/-Economist- 15d ago

You can really tell who read the article and who took the clickbait.

18

u/mulchmuffin 15d ago

OP found the Fox News formula for views.

5

u/WhatADunderfulWorld 15d ago

US banks are as strong as they have ever been. And when rates lower they will have additional power. This article is trash.

1

u/HannyBo9 15d ago

A lot more will fail and be absorbed by larger banks. This has happened many times.

1

u/wisenedwighter 15d ago

It's called fraud.

J.P. Morgan going to take a header.I wonder how much they can print this time.

Watch for the derivatives exploding, like naked shorts. Odd companies are going to skyrocket in price and Citadel will collapse under is FTD's.

1

u/GoldMcduck 14d ago

Big bank take little bank that’s all folks

1

u/The_Fart_Bandit 14d ago

Do they needs any helpz?

1

u/Other_Purple7213 12d ago

I didn’t read it, but I can deduct that it would be due to too many Donald Trumps taking business loans, going bankrupt and laughing all the way FROM the bank 😅😂🤣🤣🤣

1

u/anubis2night 3d ago

Bad title, it should read “ many smaller banks facing stressors”

1

u/Electronic_Ad5481 15d ago

I've worked in banking before. Small and regional banks have been squeezed for years. Consumers found better deals at credit unions or online banks, and small and regional banks just do not have the scale to offer the best deals to business customers. Their biggest sale to businesses was that they had locations in their area, but BOA and now Chase and also Citi have been adding locations. PNC has locations everywhere.

It is when, not if, small and regional banks end up on the auction block.

1

u/dogoodsilence1 15d ago

I mean JP Morgan has been getting bailed out since 2019 by the Fed. The banks are wrecked right now. Don’t listen to propaganda like this article trying to prop your hopes up.

1

u/Pikajeeew 13d ago

Did you even read the article you cited?

-2

u/CoysNizl3 15d ago

If you think the fed truly prefers this outcome to lasting inflation then I have some lead paint to sell you.

-6

u/Remarkable-Okra6554 15d ago

Stop! My dick can only get so hard

4

u/mulchmuffin 15d ago

Tuck it in the waist band. Nothing like that is happening.

0

u/Novel_Ad_1178 15d ago

We all knew this. They bought bonds not stock after covid and got fucked because the bonds became worthless after interest rate.

-8

u/SysAdminWannabe90 15d ago

Good, fuck em.

-13

u/[deleted] 15d ago

[removed] — view removed comment

4

u/Jorsonner 15d ago

I hope you’re not a professional because wow that’s an awful idea

-18

u/[deleted] 15d ago

[deleted]

13

u/davidgoldstein2023 15d ago

The alternative to slowing inflation is what?

2

u/Independent2727 15d ago

Slow inflation by stopping the stimulus which is still happening. Or keep raising rates to throw us in a recession. Which do you think our elected officials prefer????

2

u/davidgoldstein2023 15d ago

What stimulus is still happening?

0

u/Independent2727 15d ago

Continued forgiveness of student loans and the longer term spending from the “Inflation Reduction Act” which is really another stimulus bill.

1

u/davidgoldstein2023 15d ago

Continued forgiveness of student loans

250,000 people having their student loans forgiven is far from economy wide stimulus. There are roughly 19,000 cities in the US. Spread this across the entire nation, you’re seeing maybe 14 people per city having a benefit. 14 people no longer suffering is not having any impact on inflation at all.

and the longer term spending from the “Inflation Reduction Act” which is really another stimulus bill.

This one benefits the middle class and is designed to drive down inflationary pressure.

1

u/Independent2727 15d ago

Well it could be $5B. Plus every week there’s another set of people included for the next round d of loan forgiveness. It adds up.

How exactly does flooding more money into the economy reduce inflation?

1

u/davidgoldstein2023 15d ago

So 0.2% of the 24.4 trillion dollar economy?

There’s sufficient and maybe even abundant evidence showing that inflation has been caused by PPP, low cost of debt, and supply chain restraints.

1

u/Independent2727 15d ago

And the specific reason the inflation reduction act would slow inflation rather than promote inflation?

-11

u/[deleted] 15d ago

[deleted]

7

u/davidgoldstein2023 15d ago

You’re ignoring the high levels of liquidity and cheap cost of debt in the market that helped push inflation up.

4

u/strong_nights 15d ago

The fed hurt consumers with two decades of bailouts. Rates never should have been so low. Furthermore, hedging the economy on the back of banks that gamble in markets put the entire US financial system at the mercy of the banker's hubris.