Post by
deisman03 on Nov 08, 2023 11:35am
Fear in the markets
Yes, there is a lot of fear in the markets right now.
Especially with the banks in North America.
Things have changed a lot over the last couple of years and many weren't paying attention to bank revenue streams.
Many banks are tied into long term treasury bonds at very low rates, which was profitable when interest rates were low on loans.
That's all changed right now and they're in a state of transition.
It's costing them more to pay interest on the deposits in the savings accounts than they're making on their investements.
That doesn't mean they're going broke but it does mean they aren't in a great position to be profitable or as profitable as they were.
It's going to take some time to turn this around.
The above is especially true for US banks and Canadian banks with a lot of US exposure.
Not quite as bad in Canada, but still a lot of thorns in the mix.
It's going to get worse from here and go sideways for a while IMHO. I can't figure out a timeline before the turnaround starts.
That's another reason BK has such a high cash position, neithr can they.
I don't know how low this is going and I'm not willing to speculate. Momentum can be two edged sword.
One more run on a few small banks and we could easily see waterfall charts overnight.
Office Real Estate is a biggie. People still aren't returning to the office and continue to work at home.
I don't see any light at the end of the tunnel yet.
Of course, this is just IMHO.
GLTA the good folks here.