Banking troubles loom large

Here we go again

From Tuomas Malinen’s Forecasting Newsletter.

I have enabled a 7-day free trial to all my posts. This changes the structure of my entries somewhat. From now on more of the analysis will be behind a paywall. This is a change I’ve been pondering for a while, because the “free bee” analysis is kind of a marketing piece, and bit of a drag for me. I just like to jump straight into the issue, and I am going to do more of that from now on.

So, in the future, only the Issues discussed summary-section is always free, all or almost all of the analysis will be behind a paywall. I will naturally publish occasional free pieces.

Moreover, I will start to publish a new section, entitled: Expected short-run developments. In this section I will forecast economic and/or geopolitical developments that I expect to occur during the coming weeks or the next few months. The aim of these short-term forecasts is to give a more concrete view of what can be expected to both subscribers of mine and that of GnS Economics Newsletter, and to challenge us further (to improve). I hope that our subscribers track and comment them.

So, without further delay, let’s dive in to the topic of the week. Please check our warning on a re-surfacing of the banking crisis, as it directly relates to the topic.

Issues discussed:

• The ‘arbitrage element’ of the Bank Term Funding Program of the Federal Reserve.

• U.S. regional banks have continued to provide vast amounts of commercial real estate (CRE) loans exposing themselves to catastrophic losses.

• U.S. banks have seen some improvements in their financial situation, but CRE losses weigh heavily.

• European banks, however, are the first ones to feel the ‘sting’ of CRE in this third wave of the global financial crisis.

The silent bank run that wasn’t?