A MarketWatch article Sept. 27 was headlined, “Global insurers overseeing $29 trillion in assets expect more cracks at banks.” For “cracks,” read bankruptcies, failures of banks. The article about an international survey of CFOs and CEOs of major insurance firms is behind a paywall, but the headline is enough. What are these bank cracks?
As soon as President Joe Biden on June 3 signed the legislation raising the U.S. Federal debt ceiling, it was evident—and EIR reported it immediately—that the avalanche of new Federal borrowing required after the Federal Reserve/Treasury $9 trillion money-printing bonanza of 2019-2022 would drive Treasury interest rates up rapidly and reignite the bank crisis. In the four months since then, each maturity of Treasury securities, from 6-month bills to 30-year bonds, has risen in yield by more than one percent; and that upward push seems only now to be gathering its real momentum.
Warnings are now being given that the bank crisis is being reignited. In a related article also on MarketWatch Sept. 27, TD Bank analysts are quoted that “a persistent selloff in bonds increases the risk of ‘breaks’ similar to those seen during the U.K.’s liability-driven investment crisis of last year [the British Gilts Crisis of December 2022—pbg] and this year’s collapse of Silicon Valley Bank.”
