USSA Debt-ridden Fiat Currency Faces ANOTHER Downgrade As Banks Shares Crash
US bank stocks declined after Moody’s Investors Service lowered its ratings for 10 small and midsize lenders and said it may downgrade major firms including U.S. Bancorp, Bank of New York Mellon Corp., State Street Corp., and Truist Financial Corp.
Northern Trust Co. and Cullen/Frost Bankers Inc. are also under review for downgrades.
Debt insolvency, price inflation, regulatory burden and rising risks tied to commercial real estate are among strains prompting the review.
Moody’s also adopted a “negative” outlook for 11 lenders, including PNC Financial Services Group, Capital One Financial Corp., Citizens Financial Group Inc., Fifth Third Bancorp, Regions Financial Corp., Ally Financial Inc., Bank OZK and Huntington Bancshares Inc.
The S&P Regional Bank Index is down around 3% in the early market.
Despite Washington (and Wall St) going to great lengths to restore confidence, Moody’s warned that banks with substantial unrealized losses that are not captured by their regulatory capital ratios may still be susceptible to sudden losses of market or consumer confidence in a high interest rate environment.
“Rising funding costs and declining income metrics will erode profitability, the first buffer against losses,” Moody’s wrote in a separate note explaining the moves.
“Asset risk is rising, in particular for small and midsize banks with large CRE exposures.”
Finally, Moody's warns of more pain to come: “We continue to expect a mild recession in early 2024, and given the funding strains on the US banking sector, there will likely be a tightening of credit conditions and rising loan losses for US banks.”
MY COMMENT: We are already in a HORRIBLE recession. What they are not allowed to say is the word DEPRESSION, and yes, the US is heading towards another great depression!!!
https://finance.yahoo.com/news/moody-more-gloomy-view-us-000356251.html
https://www.cnbc.com/amp/2023/08/07/stock-market-today-live-updates.html
https://www.zerohedge.com/markets/bank-stocks-slide-after-moodys-cuts-ratings-triple-whammy-factors
https://www.zerohedge.com/economics/7-trends-which-indicate-economic-disaster-approaching-very-rapidly
