Speaking of Financial Crises

The technical term for this is screwed It appears that bad loans in the commercial real estate market are exceeding bank reserves.

The 2008 financial crisis is only 14 years ago, and it appears to be roaring back: 

Bad commercial real estate loans have overtaken loss reserves at the biggest US banks after a sharp increase in late payments linked to offices, shopping centres and other properties.

The average reserves at JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, Goldman Sachs and Morgan Stanley have fallen from $1.60 to 90 cents for every dollar of commercial real estate debt on which a borrower is at least 30 days late, according to filings to the Federal Deposit Insurance Corporation.

The sharp deterioration took place in the last year after delinquent commercial property debt for the six big banks nearly tripled to $9.3bn.

We are f%$#ed, and the taxpayers are going to be on the hook for another bailout bigger than the total spending on WWII.

………

Bill Moreland of BankRegData, which collects and analyses lender data, said that across the industry there was little doubt that “allowances for these loan losses have to come way up”.

“There are banks that may have looked fine six months ago, that are going to look not so good next quarter,” Moreland said.

Earlier this month New York Community Bank shed more than 50 per cent of its market value after reporting hundreds of millions in previously undisclosed potential losses in its commercial property loan book.

The question is not if a major banking institution is going to implode, but when.

………

Bank of America’s chief executive Brian Moynihan said in December that the bank had identified just $5bn in commercial property debt tied to buildings in sectors of the property market in which prices had dropped, a figure he said was tiny for a bank that earned nearly $30bn last year and has more than $3.2tn in assets.

“It’s such a small part of the table,” Moynihan said. “We feel good.”

Of course you feel good, you benighted blithering banal bloated buffoon, you get your bloody bonus until the collapse hits, and you probably still get your bloody bonuses after that.

You will make out like a raped ape while the rest of us pay you.

Bugger that. It's complete bollocks.