At the same time, some things are worth knowing.
...so far the Big 4 banks have reserved an additional $24BN in Q1 for future loses. But if the GFC is any indication of the defaults that are about to be unleashed, the real amount of losses, discharges and delinquencies will increase 3x-4x compared to the current baseline, meaning that over the next several quarters, banks will have to take another $75-$100BN in reserves on loans that go bad, wiping out years of profits, which were used not for a rainy day fund but to pay for - drumroll - buybacks....
OK; if banks are forced to write off $100 billion ++, what happens?
...Keep an eye on those charge-off updates. While they have yet to pick up, once they do it will be an avalanche of consumers refusing or unable to pay down their loans, sticking banks with the loss. The only question then is whether the banks will stick taxpayers with what is shaping up as yet another taxpayer bailout of the US financial system....Yup. Oh, there will be a few forced retirements--about 10% of what SHOULD be the case, and your grandchildren will be paying for those nice, pretty, bank buildings and company limos.
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