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So how did the Fed lose so much money?

Some of it comes from their paying Wall Street to park money at the Fed, which it does to hide inflation and because it likes handing money to Wall Street.

But the bulk of the Fed’s losses are because they printed trillions to finance Covid lockdowns, and used those trillions to buy bonds — mainly government debt. Then when they panic-hiked rates to try and choke off inflation, bond prices collapsed.

Meaning the Fed’s pile of $9 trillion worth of bonds started losing money hand over fist. In fact, estimates of unrealized losses — meaning money the Fed has lost but hasn’t yet fessed up to — could be well over a trillion dollars at this point.

There are more dormant office towers in the United States than at any point since 1979, according to a new report from Moody's Analytics, which began tracking office leasing vacancies that year.

There’s no great solution. Most cities are floating quixotic proposals to turn empty offices into apartments to “fix” the crisis, but this is often too expensive to be practical and requires navigating lots of bureaucratic red tape, like changes to zoning laws.

office loan delinquencies were up a shocking four times compared to the previous year. In under two years, commercial real estate loans totaling $1.5 trillion are due to expire, portending disaster for the economy when the bill comes due and office owners can’t pay it. According to data from the St. Louis Fed, delinquency rates on commercial real estate loans have already ticked above their Covid peak:

A leaked document by Business Insider reveals that Amazon is trying to save $1.3 billion over the next three to five years. A person familiar with the new strategy said the company plans to "let certain leases naturally expire, stop the use of some office floors, and negotiate early lease terminations for some buildings."

Amazon is one of many companies that have been shrinking its corporate footprint. Many other big tech firms have been slashing square footage as office space floods the market, pressuring tower values lower and leaving owners with a difficult decision to either refinance (if they can) or default.

When the Fed panic-hiked interest rates in the 2021 inflation, that put trillions of commercial real estate underwater even without other factors. Add to that crime, inflation, plus remote work, and you have a dangerous mix that could toppled cities as we know them.

This could mimic and elaborate upon last year’s bank crisis, where falling bond prices panicked depositors. That crisis only stopped when Treasury Secretary Janet Yellen and Fed Chairman Jerome Powell effectively bailed out every bank in America with sweetheart loans written on fictitious asset values along with unlimited taxpayer guarantees through the comically underfunded FDIC....

Without those government pre-bailouts, one paper last year by researchers at Stanford and Columbia estimated that 1,619 US banks – about a third of them – could be at risk of failure.

Bottom line: after several years of tightening, 2024 is when the liquidity floodgate reopen and not only does the Fed start to cut rates aggressively, but with QT tapering, we fully expect the next QE to be launched in the near future

Grayling813 wrote: ↑Wed Dec 27, 2023 8:03 pm

Paladin wrote: ↑Wed Dec 27, 2023 3:24 pm Banks Terminate 60,000 Workers In One Of The Bleakest Years For The Industry Since 2008

A new report from the Financial Times shows twenty of the world's largest banks slashed 61,905 jobs in 2023, a move to protect profit margins in a period of high interest rates amid a slump in dealmaking and equity and debt sales. This compared with the 140,000 lost during the GFC of 2007-08.

"There is no stability, no investment, no growth in most banks — and there are likely to be more job cuts," said Lee Thacker, owner of financial services headhunting firm Silvermine Partners.

FT noted that corporate disclosure data and its independent reporting did not include smaller regional bank cuts, indicating total job loss could be much higher.

Clear case of Bidenomics.

G.W. Bush and CONgress bailed out the financial sector in 2008, ensuring most of the guilty continued on without sacrifice or paying the consequences to bring them back to the brink of collapse today.

Is it just coincidence that CONgress is full of multi-millionaires?

A new report from the Financial Times shows twenty of the world's largest banks slashed 61,905 jobs in 2023, a move to protect profit margins in a period of high interest rates amid a slump in dealmaking and equity and debt sales. This compared with the 140,000 lost during the GFC of 2007-08.

"There is no stability, no investment, no growth in most banks — and there are likely to be more job cuts," said Lee Thacker, owner of financial services headhunting firm Silvermine Partners.

FT noted that corporate disclosure data and its independent reporting did not include smaller regional bank cuts, indicating total job loss could be much higher.

The Federal Reserve kept the target range for the federal funds rate at its 22-year high of 5.25%-5.5% for a second consecutive time in November

Unrealized Losses on Securities Increased From the Prior Quarter: Unrealized losses on securities totaled $683.9 billion in the third quarter, up $125.5 billion (22.5 percent) from the prior quarter. Unrealized losses on held-to-maturity securities totaled $390.5 billion in the third quarter, while unrealized losses on available-for-sale securities totaled $293.5 billion.