The banking sector continues to come under fire and shows continually increasing signs of serious turmoil, as the some of the banking giants and investors are dumping large amounts of their stocks, if not even all of them in some cases. This comes at time when banks are subtly shuttering customer’s accounts, as Americans continue to sink deeper into debt and penury.
The first story concerning the pall on bank stocks comes courtesy of The Trends Journal, which is as follows:
Wall Street’s Top Bankers Are Bailing Out Of Bank Accounts
James Gorman, Morgan Stanley’s CEO for the past 12 years, has sold $48 million worth of his hoard of Morgan stock so far this year, bringing the total he has cashed in to $78 million. Ted Pick, who will take over for Gorman in January, has sold $30 million worth of his shares, according to the Financial Times.
Morgan top executives Andy Saperstein and Dan Simkowitz have sold $19 million and $25 million, respectively.
At Goldman Sachs, CEO David Solomon has dumped about $22 million of his shares since 2006. John Waldrom, the bank’s second-ranking leader, has offloaded $20 million worth over the same period.
At JPMorgan Chase, Mary Erdoes, chief of asset and wealth management, has sold $63 million in shares over the past 17 years. Daniel Pinto, chief investment banker, has turned $53 million worth of shares into cash over that time.
Now James Dimon, who has been JPMorgan’s CEO since 2006 and has not sold a single share of his JPMorgan stock during that time, will sell about $140 million worth next year, the bank has announced.
Dimon will be breaking the “blood oath” that Sandy Weill, Dimon’s predecessor at the top job, required of his executives that no one would sell a share of their company stock until they left the bank’s employ.
Dimon’s sale will still leave him with about a billion dollars’ worth of shares and he accumulates tens of millions of dollars in additional shares with each year’s annual bonus.
The CEOs of the six largest U.S. banks have been awarded more than $400 million in restricted stock since 2020, figures from data service ISS show.
Restricted stock cannot be sold until certain conditions take place, such as profit targets being met.
The itch to sell stock grows as stock options overwhelm the cash portion of executive pay, an unnamed Wall Street executive told the FT.
If you get paid $25 million, 50 percent goes to taxes and 80 percent is paid in stock. Everyone can live on that but you’re not accumulating liquid net worth.
The person said.
TRENDPOST: Banks’ C-suite residents are hinting that now is a good time to trade bank stocks for something better.
Bankers are selling shares as bank stocks listed in the Standard & Poor’s 500 index have crashed to an all-time low compared to the S&P average as a whole, according to the Financial Times.
Last spring’s three bank failures only underscored the industry’s weakness:
● holding $400 million or more in unsellable low-yield bonds;
● being forced to pay higher interest rates on deposits to keep accounts;
● holding billions of dollars in commercial real estate loans that could go bad over the next few years;
● seeing income from mortgage sales and investment banking plunge;
● feeling pressure from regulators to stockpile more cash to offset loans that turn sour.
Also, “banks have failed to recover ground lost following the 2008 financial crisis when waves of new regulation hit returns already squeezed by super-loose monetary policy,” the FT noted.
The industry is also facing more new rules that Dimon in September warned risked making bank stocks “uninvestable.”
TREND FORECAST: We continue to see more bank failures ahead as a result of the Office Building Bust and dramatic declines in many commercial real estate sectors. The pressures on banks will drive a number of small and regional banks to the brink of insolvency. Some will fall off the edge and fail outright. Most will be bought by larger rivals, reducing the number of locally-oriented banks and leaving customers to deal with larger bureaucracies and fewer branches.
SEE: Collapse: Another US Bank Quietly Shutters, As Bank Runs Persist And Deposits Decrease
At the same time banks are increasingly shuttering accounts, many of which are by surprise and with no real explanation. The WinePress had noted that banks were becoming increasingly weaponized against clients and customers across the U.S. and U.K., noted in a September article.
This issue has persisted, and on November 5th The New York Times ran a headline that says, “Why Banks Are Suddenly Closing Down Customer Accounts.” The paper lists a number of different reasons from alleged odd cash deposits and withdrawals, connections to marijuana use, customer history, community lending pools, and more. Part of the article reads:
The reasons vary, but the scene that plays out is almost always the same.
Bank customers get a letter in the mail saying their institution is closing all of their checking and savings accounts. Their debit and credit cards are shuttered, too. The explanation, if there is one, usually lacks any useful detail.
Or maybe the customers don’t see the letter, or never get one at all. Instead, they discover that their accounts no longer work while they’re at the grocery store, rental car counter or A.T.M. When they call their bank, frantic, representatives show concern at first. “Oh, no, so sorry,” they say. “We’ll do whatever we can to fix this.”
But then comes the telltale pause and shift in tone. “Per your account agreement, we can close your account for any reason at any time,” the script often goes.
These situations are what banks refer to as “exiting” or “de-risking.” This isn’t your standard boot for people who have bounced too many checks. Instead, a vast security apparatus has kicked into gear, starting with regulators in Washington and trickling down to bank security managers and branch staff eyeballing customers. The goal is to crack down on fraud, terrorism, money laundering, human trafficking and other crimes.
In the process, banks are evicting what appear to be an increasing number of individuals, families and small-business owners. Often, they don’t have the faintest idea why their banks turned against them.
But there are almost always red flags — transactions that appear out of character, for example — that lead to the eviction. The algorithmically generated alerts are reviewed every day by human employees.
Banks generally won’t say how often they are closing accounts this way, and they’re not tracking how often they get it wrong. But federal data offer clues.
Epic Economist puts this into context of all the other economic problems facing the U.S. and the world at the moment, and why the banking sector is in serious trouble, and why a lot of this is going to come to a head in 2024.
AUTHOR COMMENTARY
While I do not have the ability at the moment to cover the economy in detail on a routine basis, I try to give the salient points and critical reminders when necessary. I continue to encourage readers to do their own research into this very important subject that will effect us all.
The banks are collapsing and the writing is on the wall. When the banking sector tumbles, and it will, the whole system will come down with it because the banks, mega, large, medium, and small – are practically all insolvent and underwater with bad loans, worthless bonds and notes, and running out of credit. With consumers being deeply indebted and broke, coupled with a collapsing housing market, an auto loan apocalypse that’s starting to take place, and commercial real estate that is falling apart – the banks will fall as will the whole economy.
In all likelihood interest rates are going to be cut in the lead-up the Presidential Election, which will force inflation to rocket back up higher again, higher than it already is now (not the bogus numbers the government gives), on top of the insane money printing that’ll be going on next years as well.
Brace for impact.
A prudent man foreseeth the evil, and hideth himself; but the simple pass on, and are punished.
Proverbs 27:12
[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).
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16) Moreover he said unto me, Son of man, behold, I will break the staff of bread in Jerusalem: and they shall eat bread by weight, and with care; and they shall drink water by measure, and with astonishment:
Ezekiel 4:16
The staff of bread represents the economy, I believe. The U.S. economy is falling like a lead brick, it’s in free fall.
All the years that Americans celebrated Thanksgiving which has been degenerated into a holiday of football, the Macy’s parade, getting drunk, and glorifying gluttony, is hypocritically followed by Black Friday, where heathen Americans bust the store doors off the hinges and literally maim and kill others just so they can get a TV, a PlayStation, or a Tickle-Me Elmo at 65 percent off…soon across America, it’ll be Americans fighting over the last dozen eggs or the last pack of ground beef.