The following report is by The Daily Hodl:
Moody’s Investor Service downgraded JPMorgan Chase, Wells Fargo and Bank of America to negative ratings after previously classifying them as stable, MarketWatch reports.
Analyst Peter E. Nerby of Moody’s said that the worsening outlook on bank debt was due to “the potentially weaker capacity of the government of the United States of America (Aaa negative) to support the U.S.’s systemically important banks.”
In particular, JPMorgan’s downgrade was partially because the bank runs a “complex” capital markets business that may post “substantial” risks to its creditors.
A potential upgrade for JPMorgan “would depend on sustaining strong and stable performance and capital levels” above its competitors, Moody’s says.
Despite the downgrade from Moody’s, all three banks’ stock prices are in the green for November, so far.
The agency also said that the downgrade of the banks’ ratings was in line with a previous downgrade of U.S. sovereign credit rating, which was also bumped down from stable to negative.
SEE: Moody’s Drops US AAA Credit Rating To ‘Negative,’ Treasury Disagrees
In a research note released last quarter, Moody’s said that US banks were facing “significant risk” of deposit flight due to interest rate and asset-liability management (ALM) risks.
Moody’s, which controls 80% of the global ratings industry along with Standard & Poors (S&P), is forecasting a recession for the US economy early next year.
We continue to expect a mild recession in early 2024, and given the funding strains on the US banking sector, there will likely be a tightening of credit conditions and rising loan losses for US banks.
AUTHOR COMMENTARY
In the house of the righteous is much treasure: but in the revenues of the wicked is trouble.
Proverbs 15:6
Indeed, there is grave trouble with the banks, as I have been warning about now for a while as longtime WinePress readers know; and this is another canary in the coalmine that showcases the economy is collapsing. The media and government can try and whitewash this all they want, but it is becoming far too difficult to keep painting this rosy picture.
There is a colossal banking bust that looms of epic proportions; and when these banks finally start to collapse in rapid succession – mega, large, medium small – in 2024, the gravity of that will suck the rest of the economy into this blackhole that can be saved from obscurity. The collapse will be tremendous, and will make 2008 look like a cake walk.
Treasurer Janet Yellen in March, in the wake of the fallout from Silicon Valley Bank, had indicated in advance that the government (meaning you and me) would bail out these larger institutions because they are the “too-big-to-fails,” but also insinuated that your small local bank can go eat dirt. That’s what coming next year and after. Count on it, as the Federal Reserve throttles back interest rates.
[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).
The WinePress needs your support! If God has laid it on your heart to want to contribute, please prayerfully consider donating to this ministry. If you cannot gift a monetary donation, then please donate your fervent prayers to keep this ministry going! Thank you and may God bless you.
All these banks have been involved in stealing from their depositors. All three, I have heard, are 51% owned by the Jesuit order.