Their loan loss reserves are supposedly way larger this time around. Time will tell. C&I and CRE are going to be bloodbaths.
There are hundreds of billions, at least, in construction loans that are in huge trouble if construction stops. The borrowers will accrue interest while half built buildings sit there with nothing happening. The banks will then be forced to foreclose and liquidate at the absolute bottom.
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They are way larger but not large enough for this, frankly hard to blame regulators for not requiring lenders to prepare for the zombie apocalypse.
I thought we would be fine when it was looking a one month shutdown; two months eh, pushing it; now it’s looking like three months and still not “normal” for long after that… fucked, completely and totally fucked.
https://twitter.com/SenWarren/status/1240030852182130695
https://twitter.com/SenWarren/status/1240030853574647811
https://twitter.com/SenWarren/status/1240030855034286089
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https://twitter.com/SenWarren/status/1240030860889505792
https://twitter.com/SenWarren/status/1240030862344892416
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Unless summer actually does some damage to this, it could be 12-18 months. The government will have to institute some freeze on rent/debt or its all over. There will be nothing left but revolution
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That’s a lot of numbers.
How about “if we bail you out it is equity.” Not preferred equity, equity. Period. And we get board seats commensurate with our level of ownership.
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Those are the best loans, at least there was a lag time built in for construction. Think about cash flow based loans (when no cash is flowing), receivable based loans (when no company or person can pay their bills), mortgage backed loans (when nobody can pay their mortgage), etc.
Yeah. In my early years I sat through a large bank training program where it was pounded into our heads that “we are cash flow lenders.”
Whoops.
In addition, think of all the loans subject to a “borrowing base” that are now in technical default. And the covenant breaches…
Yep, regulators are going to have to pretend that we entered a time machine that fast forwards past how ever long this goes on, and that defaults that happened in the interim didn’t actually happen. Otherwise the whole system insta-collapses. Suspect that is the plan and why all banks aren’t currently worthless.
Even then, it’s going to be a long haul.
Imagine telling Bernie his ideas are too radical to get passed.
Super fuckin glad that as we enter this gigantic social experiment to find out what happens when a bunch of Americans run out of money and have no relief in sight, we have Elizabeth Warren around to hold companies accountable by reciting plans that have no chance of even getting a vote.
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You might think of Michael Harriott as the guy from The Root who called Mayor Pete a “lying motherfucker”, but he is also a writer and journalist with a masters in international business.
Putting it all here, so people just don’t gloss over the words of (as he describes how people see him) the “white-people-be-tripping” guy.
https://twitter.com/michaelharriot/status/1240129472793399301
https://twitter.com/michaelharriot/status/1240129473951027201
https://twitter.com/michaelharriot/status/1240129474940805120
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https://twitter.com/michaelharriot/status/1240133810236411904
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https://twitter.com/michaelharriot/status/1240133812161589248
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Well, that’s certainly bold.
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“It’s been estimated…”
Come on, Bernie. That’s Trump-level nonsense.
Separately, bailout money can’t go through corporations! We’ve been through this! Give it DIRECTLY TO ACTUAL FUCKING PEOPLE
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Clearly Bernie is owned by the corporations.
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Bernie certainly has a healthy respect for capitalism, for a socialist. That’s a good thing.
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