MILLIONS will Go BANKRUPT! Hundreds of Banks Now at Risk of COLLAPSE

Hundreds of small and regional banks across the U.S. are feeling stressed.

More than 280 banks face the dual threat of commercial real estate loans and potential losses tied to higher interest rates.

There's no doubt in my mind there's going to be more bank failures.

Or at least dip below their minimum capital requirement.

There will be bank failures, but this is not the big banks.

Rapid interest rate hikes can mean borrowers suddenly face more expensive loan payments.

And if they can't afford to pay up, they may default on their loans.

A record $929 billion worth of loans are coming due, aka maturing, in 2024, driven by mass extensions of loans originally due in 2023.

The USA might be on the brink of a banking crisis that rivals the Great Recession of 2008.

The trend sending shockwaves through the financial world is that 2024 could be the year dozens of banks in the United States go bankrupt.

Reports currently say that about 282 banks face bankruptcy due to the dual threat of commercial real estate loans and potential losses tied to higher interest rates.

Looking back in history, the largest all-time bankruptcy in the United States as of February 2024 remained Lehman Brothers.

The New York-based investment bank had assets worth $691 billion when it filed for bankruptcy on September 15, 2008.

Since the beginning of 2000, we've already seen a marked increase in bank

failures.

The Federal Deposit Insurance Corporation, or the FDIC, has been reporting the number of banks on its failed bank list, which has been growing significantly year over year.

In 2023 alone, there were about four banks on this list.

In 2024, if even a handful of major banks were to fail, it could trigger a domino effect that could reverberate through the entire financial system, and here's how the scenario might unfold.

When news of bank failures hits the headlines, it can erode public confidence in the banking sector, leading to a wave of deposit withdrawals.

This phenomenon, known as a bank run, can quickly drain a bank's liquidity reserves, forcing it to sell assets at fire sale prices or seek emergency funding.

And since banks are deeply interconnected with complex webs of loans, derivatives, and other financial instruments tying them together, if one bank fails, it can trigger a chain reaction of defaults.

as other institutions struggle to meet their obligations.

Plus, as banks tighten their lending standards and become more risk-averse, access to credit becomes increasingly difficult for businesses and consumers alike, causing a vicious cycle of economic contraction.

The signs are there for those who know where to look.

The telltale cracks in the foundation, the hushed conversations behind closed doors, the nervous glances exchanged between bankers and regulators.

And yet, like the proverbial frog in the slowly boiling

hot, many Americans remain blissfully unaware of the danger that lurks just beneath the surface.

In this video, we will consider the different reasons why these banks are so financially stressed to the point of an imminent collapse.

We will explore the toxic cocktail of factors pushing unknowing Americans ever closer to the brink of a financial catastrophe, from the mountains of debt that have accumulated in the wake of the pandemic to the speculative bubbles that have been allowed to grow unchecked.

Firstly, the Federal Reserve's aggressive interest rate hikes in an effort to combat inflation have put immense pressure on banks.

As interest rates rise, the cost of borrowing increases, making it more difficult for businesses and individuals to service their loans.

This, in turn, leads to an uptick in loan defaults, eroding the bank's asset quality and profitability.

As of June 2024, the federal funds rate stands at a staggering 5.25%, the highest level since the early 2000s.

This sharp increase in borrowing costs

has had a cascading effect on the banking industry.

Banks' primary source of revenue is the net interest margin, or the NIM, which is the difference between the interest earned on loans and investments and the interest paid on deposits and borrowings.

As interest rates rise, banks are forced to pay higher rates on deposits to remain competitive, while the yields on their existing loan portfolios and fixed-rate investments remain unchanged.

This compression of NIM directly impacts profitability.

According to reports, the average NIM for U.S. banks declined by six basis points sequentially, compared with seven basis points in the prior quarter and six basis points in the second quarter of 2023, a significant drop that has squeezed banks' earnings.

Furthermore, higher interest rates make it more expensive for businesses and individuals to service their loans, leading to a surge in delinquencies and defaults.

This problem is particularly acute for sectors like real estate,

where adjustable rate mortgages, or ARMs, and commercial real estate loans have become much costlier.

The National Delinquency Survey, or the NDS, reports the delinquency rate for mortgage loans on one- to four-unit residential properties increased to a seasonally adjusted rate of 3.88% at the

end of the fourth quarter of 2023 alone.

This significant increase has put immense pressure on banks' balance sheets.

As many reports say, a lot of banks are sitting on large portfolios of long-term, low-interest loans, which are now liabilities as interest rates climb.

As loan defaults increase, banks are forced to set aside larger reserves to cover potential losses, further eroding their profitability.

Additionally, the value of assets like real estate and securities can decline, leading to write-downs and impairments.

In 2023, FDIC reported that almost half of all banks, or 49.0%, reported lower non-current loan balances compared with fourth quarter 2022.

Also during the fourth quarter of 2023, deposit outflows from U.S. banks increased the highest level since the 2008 financial crisis, thereby posing substantial impacts on banks' liquidity positions for the 2024 financial year.

Secondly, the real estate market

has been a significant driver of growth for many banks, particularly those with substantial exposure to commercial and residential mortgages.

However, rising interest rates have cooled the once-sizzling housing market, leading to a decline in property values and an increase in mortgage delinquencies.

According to reports by National Mortgage Professional, mortgage applications in 2024 fell 5.2% in the final week of May, as mortgage rates reached their highest level since early May.

Also, since many banks have significant investments in commercial real estate loans, which finance properties such as office buildings, shopping malls, and multi-family housing complexes, a weakening real estate market can lead to lower occupancy rates, reduced rental income, and decreased property values, making it difficult for borrowers to service their loans.

Data from the Federal Reserve Bank shows that the delinquency rate for the CRE loans held by U.S. banks reached 1.8% in Q1 2024.

Real estate investment trust or REIT isn't also left out.

Banks often hold investments in REITs which are companies that own and operate income-producing real estate assets.

A downturn in the real estate market can significantly impact the value of these investments and the dividends they generate, directly affecting banks' profitability.

We're already seeing the total market capitalization of the US REITs declining by 4.9% in January 2024.

Additionally, real estate often serves as collateral for loans, and a decline in property values can erode the value of this collateral.

If borrowers default, banks may be unable to recover the full value of their loans through the sale of the underlying properties, resulting in significant losses.

According to reports by Business Insider, home prices in the United States declined in 2023, and the median existing home price fell to $363,000 in February, a 0.2% decline from a year prior.

Therefore, as the real estate market continues to face headwinds with rising interest rates, economic uncertainty, and oversupply in certain markets, the risk of bank failures increases.

Banks with excessive exposure to real estate loans and investments may find themselves struggling to maintain profitability and capital adequacy, potentially leading to insolvency and even bankruptcy for those unable to weather the storm.

Another impending danger looming for the banking sector in the U.S. is the current implosion of the cryptocurrency

technology sectors.

Many banks have extended loans and credit lines to cryptocurrency companies, including exchanges, mining operations and other related businesses.

The collapse of major crypto firms like FTX, Celsius Network and Voyager Digital has left banks holding the bag, with billions of dollars in defaulted loans.

Several banks like JPMorgan Chase and Goldman Sachs have ventured into offering custody and trading services for cryptocurrencies, hoping to capitalize on the industry's growth.

A crypto market meltdown could leave these banks with significant losses and potential legal liabilities.

According to a report, US banks' aggregate exposure to crypto custody and trading services stood at 79% to the tune of €4.4 billion, which means a potential insolvency in any market meltdown.

Banks have also been heavily involved in lending to technology companies, from startups to established firms.

The recent downturn in the tech sector, as seen in many employee cuts, driven by factors such as rising interest rates, supply chain disruptions, and a shift in consumer spending patterns, has led to a surge in loan defaults and restructurings.

Banks that have invested in venture capital and private equity funds that are significantly exposed to the crypto and tech sectors could also face turmoil if the value of these investments plummets.

leading to substantial losses for the banks.

According to new reports, venture capital investment in crypto and blockchain companies plunged to just $9.5 billion during the year, less than a third of the previous year's total, while tech startup funding fell by 38% in 2023, indicating the severity of the downturn and the impact on bank investments.

Banks are also exposed to counterparty risk as they often engage in derivatives and other complex financial transactions with crypto and tech companies.

The failure of these firms can trigger a domino effect, leading to losses and potential defaults for the banks involved.

To make matters worse, the regulatory environment is also contributing to the stress.

With the ongoing debates in Congress about fiscal policy, bank regulations, and potential new banking laws, there's a lot of uncertainty.

Banks thrive on stability and predictability, and the current political climate is anything but that.

But what does this mean in concrete terms?

If these banks really do collapse before the end of 2024, the effects could be widespread.

For everyday customers, this could mean losing access to your accounts, delays in transactions, and a general loss of confidence in the banking system.

For businesses, it could mean reduced access to credit, higher borrowing costs, and a more challenging economic environment.

Federal Reserve Chairman Jerome Powell has acknowledged that we are likely to see more bank failures, particularly due to commercial real estate losses.

There will be bank failures, but this is not the big banks.

However, the situation is complex.

While the Federal Reserve and the FDIC have tools to provide emergency support, such as liquidity injections and deposit insurance, the scale of potential failures might overwhelm these mechanisms.

Can the government save the day?

In 2008, the federal government created the Troubled Asset Release Program, or TARP, a $700 billion government bailout designed to keep troubled banks and other companies in operation.

Fast forward to today, the federal government is already dealing with high levels of debt and budgetary constraints.

The capacity for another large-scale bailout is uncertain, especially with rising political divisions on the issue.

Plus, the political and economic landscape of 2024 presents a different set of challenges.

The United States' national debt has reached unprecedented levels, exceeding $31 trillion as of early 2024.

This massive debt burden could limit the government's ability to mount a large-scale bailout program without risking further economic turmoil.

With a divided Congress and heightened partisan tensions, reaching a consensus on a comprehensive bailout plan could prove to be a daunting task.

The bitter memories of the 2008 bailouts and the ensuing backlash could further complicate matters.

Congress has been holding hearings on banking regulations and the potential need for intervention.

However, there's significant debate on whether taxpayer money should be used to bail out banks again.

There's also the question of moral hazard.

If banks are repeatedly bailed out, do they have enough incentive to manage risk properly?

It's also important to note that not all banks are at risk.

Many small and community banks have more conservative lending practices and might be in a better position to weather the storm.

However, staying vigilant and prepared is key.

The banking sector is under significant stress, but it's not uniformly distributed.

Larger banks with significant commercial real estate exposure are more vulnerable.

The key for consumers is to stay informed and make decisions based on their individual risk tolerance and financial situation.

While this situation is precarious, it's not without hope.

The financial system has safeguards, and there are steps you can take to protect yourself.

But the potential for a wave of bank failures before the end of 2024 is real, and being

is crucial.

The warning signs are clear.

The perfect storm of rising interest rates, economic uncertainty, and mounting loan defaults has set the stage for a potential banking crisis in the coming months of 2024.

As consumers and investors, it's crucial to stay informed and vigilant, diversify your investments, monitor your exposure to potential risks, and be prepared for potential market volatility.

Remember, the decisions you make today

could have far-reaching consequences for the financial stability of your nation and the world.