Get ready for more banking turmoil

This week Treasury sec. Yellen said there will be more bank "consolidations" coming which means she knows something that we don't: more banks are about to fold. I'm not going to speculate about which ones since I don't think that really matters; the strategy of allowing small banks to fail and then carving out the valuable parts to sell for pennies on the dollar to JP Morgan/CHASE while loading all the toxic debt on to the American taxpayer will continue regardless of which names make the paper next week.
"So I think people should build into their mindset that they may have to move deposit beta more than they think and manage that. So I mean, if I was any bank or any company, I'd be saying, can you handle higher interest rates and surprise in deposits, etc?" - Jaime Dimon

By the way, "deposit beta", as Jamie calls it, for those unfamiliar is a polite way of saying bank run, which is a less polite way of saying bank failure. As for Dimon's rhetorical last question, the answer is a resounding no, or so JPM's shareholders would like because for the second time in a month, JPM hiked its Net Interest Margin forecast, this time courtesy of the bank's FDIC/taxpayer-funded gift in the form of First Republic Bank.

Our own normalcy bias keeps most of the business owners I speak with in a state of waiting; waiting for things to go back to "normal" so that they can operate withing their own comfort zones again.

I'm afraid that this time is truly different in that, although there will be a big reversion to the mean, the average we will be reverting to is way lower in terms of valuations than where we are now.  The economy has been manipulated for so long with zero interest rates that anyone in business for the last 10-15 years thinks THIS is normal.

"If you wanted to destroy the middle class, one way that you could accomplish that goal would be to flood the system with money.  Of course that is precisely what we have witnessed over the past few years.  Our leaders have pumped trillions of new dollars into the system, and the wealthy have gotten much, much wealthier.  But meanwhile, the rest of us have seen the cost of living rise much faster than our paychecks have.  As a result, we are getting poorer and the middle class is shrinking.
Over time, our capitalist economy has steadily evolved into a system where almost all of the wealth and almost all of the power are concentrated in the hands of giant institutions."
BTW, you are late to the party!

This picture sums up our current monetary policy perfectly:

We are all hard-wired to not be able to handle "the truth". The facts unfolding now all point to a major change in our whole economy and system of finance. This change isn't planned, it is the natural progression from years of abuse and the only things being "planned" right now are how to "extend and pretend" longer which is what the Debt Ceiling farce is all about and also, how to maintain control over the rubble in the aftermath.

The fact that the perpetrators of the crimes (yes crimes) committed which have brought us to this point are not only still in charge but also plan to be in charge of "fixing" the problems they themselves created is lost on most of the folks I speak with. This quote from Thomas Sowell is all I can offer:

"It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong."

Here are some links that provide valuable information:

OMG. We need ZIRP NOW!

Compared with the same period last year, the survey found 2.7 million more households were relying on credit cards to cover expenses.

It’s funny that we do this song and dance about raising the debt ceiling every couple of years. It’s about as hollow, inane and meaningless as both our monetary and fiscal policy in this country

Jamie Dimon Warns QT Will Lead To More Bank Failures

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