Banks can't handle $40M in loan repayments!!

You reap what you sow!

Everyone was just throwing credits and debits around like they were candy, pumping up this massive bubble. Well, guess what? The clock finally ran out. That whole parasitic system that sucked the life out of everyone is finally dying off and drying up.

And once again, everyone who’s been playing by the rules and staying on top of their mortgage payments is going to get absolutely screwed when those interest rates start climbing.

Not gonna happen. We’re all going to have to recapitalize them eventually once things actually hit the fan.

Then you've got another $28 billion in ripe, unpaid loans just waiting to turn into bad debt... Great. First comes the wave of moratoriums and refinancing deals, right? That’ll drag on for maybe one to three years. And then? Then comes the recapitalization phase.

Everyone seems to assume these loans were all taken out yesterday. 🙂 If we're talking about mortgages from a few years back, a good chunk of them is already paid down. Plus, most of those houses could probably be liquidated pretty quickly at, say, 50% of their value. That means the actual amount the bank would struggle to recover is much smaller than people think, ☕

? Quite the opposite, if you ask me. I’d bet two-thirds of those non-performing loans are still in their first third of repayment—meaning they’ve maybe cleared a fifth of the principal. They don't have much to liquidate because their debt levels remain essentially the same; maybe slightly lower, but certainly not enough to cover the gap.

I was just reading some articles today about those $40 billion in bad loans and debated whether to start a thread. Ultimately, I thought, why bother? Anyone with half a brain knows this is inevitable. If you don't see it coming, knowing that every other loan is delinquent won't change anything for you anyway (and by delinquent, I mean installments overdue by 90 days or more).

That’s the whole point I keep making to the "chicken hawks" out there: the banks did everything in their power to maximize short-term profits, but mid-term, this trajectory is unsustainable.
What kind of growth are we even talking about here? A massive influx of foreign capital? Please. You’re looking at 7% interest on savings accounts while practically paying 10-12% on everything else, like mortgages and auto loans. Meanwhile, property prices are sliding and unemployment is climbing.
The only way this survives is if someone invents an economic "magic trick." There is no other way.

The real question is—how do we play this? Let’s assume we have some cash on hand and zero debt. What’s the move?
I highly doubt any loans will be forgiven. We aren't in the South, so trying to short the market on that assumption isn't going to work.

Since most of these non-performing loans are held by corporations, I doubt we'll see some massive stampede of real estate hitting the market. I don't know.

neondriver5 said:? Quite the opposite, if you ask me. I’d bet two-thirds of those non-performing loans are still in their first third of repayment—meaning they’ve maybe cleared a fifth of the principal. They don't have much to liquidate because their debt levels remain essentially the same; maybe slightly lower, but certainly not enough to cover the gap.

I was just reading some articles today about those $40 billion in bad loans and debated whether to start a thread. Ultimately, I thought, why bother? Anyone with half a brain knows this is inevitable. If you don't see it coming, knowing that every other loan is delinquent won't change anything for you anyway (and by delinquent, I mean installments overdue by 90 days or more).

That’s the whole point I keep making to the "chicken hawks" out there: the banks did everything in their power to maximize short-term profits, but mid-term, this trajectory is unsustainable.
What kind of growth are we even talking about here? A massive influx of foreign capital? Please. You’re looking at 7% interest on savings accounts while practically paying 10-12% on everything else, like mortgages and auto loans. Meanwhile, property prices are sliding and unemployment is climbing.
The only way this survives is if someone invents an economic "magic trick." There is no other way.

The real question is—how do we play this? Let’s assume we have some cash on hand and zero debt. What’s the move?
I highly doubt any loans will be forgiven. We aren't in the South, so trying to short the market on that assumption isn't going to work.

Since most of these non-performing loans are held by corporations, I doubt we'll see some massive stampede of real estate hitting the market. I don't know.

I was talking about the banks. About 20% has been paid off, and since they're selling loan portfolios at 50 cents on the dollar, only about 30% is actually uncollectible.

neondriver5 said:? Quite the opposite, if you ask me. I’d bet two-thirds of those non-performing loans are still in their first third of repayment—meaning they’ve maybe cleared a fifth of the principal. They don't have much to liquidate because their debt levels remain essentially the same; maybe slightly lower, but certainly not enough to cover the gap.

I was just reading some articles today about those $40 billion in bad loans and debated whether to start a thread. Ultimately, I thought, why bother? Anyone with half a brain knows this is inevitable. If you don't see it coming, knowing that every other loan is delinquent won't change anything for you anyway (and by delinquent, I mean installments overdue by 90 days or more).

That’s the whole point I keep making to the "chicken hawks" out there: the banks did everything in their power to maximize short-term profits, but mid-term, this trajectory is unsustainable.
What kind of growth are we even talking about here? A massive influx of foreign capital? Please. You’re looking at 7% interest on savings accounts while practically paying 10-12% on everything else, like mortgages and auto loans. Meanwhile, property prices are sliding and unemployment is climbing.
The only way this survives is if someone invents an economic "magic trick." There is no other way.

The real question is—how do we play this? Let’s assume we have some cash on hand and zero debt. What’s the move?
I highly doubt any loans will be forgiven. We aren't in the South, so trying to short the market on that assumption isn't going to work.

Since most of these non-performing loans are held by corporations, I doubt we'll see some massive stampede of real estate hitting the market. I don't know.

If Linić hadn't introduced that real estate tax, buying up property right now might actually make sense.🤷

Timothy Castillo6 said:Not gonna happen. We’re all going to have to recapitalize them eventually once things actually hit the fan.

Exactly.

One for all, and all for one, right?

We need to do exactly what the Icelanders did—just let the banks go under!

Charles Ramos7 said:I was talking about the banks. About 20% has been paid off, and since they're selling loan portfolios at 50 cents on the dollar, only about 30% is actually uncollectible.

If Linić hadn't introduced that real estate tax, buying up property right now might actually make sense.🤷

Are you planning on throwing families—people with actual children—out onto the streets? Because there are thousands of them out there... just waiting for a break. And how exactly do you intend to explain that to a five-year-old? "Look, kid, your old man was just being a greedy idiot when he signed those mortgage papers, so now you have to leave your bedroom behind. Take your teddy bear if you want..." It’s just... well, it's beyond absurd.

Look, if you’re going to stand there spilling nonsense about contracts, banking regulations, profit margins, and the sheer depth of human stupidity—then honestly... just keep it to yourself.

My suitcase is practically overflowing with nothing but excuses from the banks—just endless, hollow justifications for their blatant highway robbery...

If we actually had a functional system in place, news like this would result in the banks collapsing rather than ordinary people ending up out on the street... It’s the institutions themselves—those executives sitting in high-rise offices—who bear the brunt of the blame. They hand out loans without a second thought regarding repayment, which seems to be the standard practice lately. Their entire purpose—the very reason they spent years studying at places like Wharton or Harvard—is to forecast the global economic landscape and decide whether to deploy capital or pull back. But instead, because of their sheer incompetence, arrogance, and blatant greed, it’s the everyday Americans who took out those loans who pay the price. And what’s truly infuriating? Those same bureaucrats will likely walk away with even larger bonuses, facing absolutely zero consequences for the mess they've made.

briskdrifter3 said:Are you planning on throwing families—people with actual children—out onto the streets? Because there are thousands of them out there... just waiting for a break. And how exactly do you intend to explain that to a five-year-old? "Look, kid, your old man was just being a greedy idiot when he signed those mortgage papers, so now you have to leave your bedroom behind. Take your teddy bear if you want..." It’s just... well, it's beyond absurd.

Look, if you’re going to stand there spilling nonsense about contracts, banking regulations, profit margins, and the sheer depth of human stupidity—then honestly... just keep it to yourself.

My suitcase is practically overflowing with nothing but excuses from the banks—just endless, hollow justifications for their blatant highway robbery...

Personally, I’m pretty much done with the geniuses who seem to think it’s the bank's moral obligation to provide housing for them and their kids ☕...

As if someone else should just pick up the tab for those loans....

And don't worry about the evictions—that part is easy enough to coordinate. I guess Bancin's job is just to offer the loan, yours is to actually read the fine print before signing, and then some other crew comes along to toss you and your goldfish out on the curb. Everyone just plays their part, I suppose...

briskdrifter3 said:If we actually had a functional system in place, news like this would result in the banks collapsing rather than ordinary people ending up out on the street... It’s the institutions themselves—those executives sitting in high-rise offices—who bear the brunt of the blame. They hand out loans without a second thought regarding repayment, which seems to be the standard practice lately. Their entire purpose—the very reason they spent years studying at places like Wharton or Harvard—is to forecast the global economic landscape and decide whether to deploy capital or pull back. But instead, because of their sheer incompetence, arrogance, and blatant greed, it’s the everyday Americans who took out those loans who pay the price. And what’s truly infuriating? Those same bureaucrats will likely walk away with even larger bonuses, facing absolutely zero consequences for the mess they've made.

If you'd actually taken the time to read the article instead of just skimming the headline, you'd see that most of these bad loans are tied to corporations. As far as individual citizens go, they're still doing a pretty decent job of servicing their debts to the banks
.

Mark Murphy39 said:We need to do exactly what the Icelanders did—just let the banks go under!

Remind me again—what’s the actual limit on FDIC insurance for individual savings accounts these days?

briskdrifter3 said:Are you planning on throwing families—people with actual children—out onto the streets? Because there are thousands of them out there... just waiting for a break. And how exactly do you intend to explain that to a five-year-old? "Look, kid, your old man was just being a greedy idiot when he signed those mortgage papers, so now you have to leave your bedroom behind. Take your teddy bear if you want..." It’s just... well, it's beyond absurd.

Look, if you’re going to stand there spilling nonsense about contracts, banking regulations, profit margins, and the sheer depth of human stupidity—then honestly... just keep it to yourself.

My suitcase is practically overflowing with nothing but excuses from the banks—just endless, hollow justifications for their blatant highway robbery...

I don't know why you're so worked up about the banks, but if you owe the government money, they’ll kick you to the curb just as fast. Like I said before, if the system is this rigged, then a house shouldn't be used as collateral in the first place.

Alexander Thompson said:Personally, I’m pretty much done with the geniuses who seem to think it’s the bank's moral obligation to provide housing for them and their kids ☕...

As if someone else should just pick up the tab for those loans....

And don't worry about the evictions—that part is easy enough to coordinate. I guess Bancin's job is just to offer the loan, yours is to actually read the fine print before signing, and then some other crew comes along to toss you and your goldfish out on the curb. Everyone just plays their part, I suppose...

And then there are the other geniuses—the ones who think it’s perfectly fine to slaughter the chicken just to get one golden egg. They can act surprised when, after driving thousands of citizens—and even worse, thousands of businesses—straight into bankruptcy, the banks wonder why nobody wants to take out loans anymore or why business has completely dried up.

briskdrifter3 said:And then there are the other geniuses—the ones who think it’s perfectly fine to slaughter the chicken just to get one golden egg. They can act surprised when, after driving thousands of citizens—and even worse, thousands of businesses—straight into bankruptcy, the banks wonder why nobody wants to take out loans anymore or why business has completely dried up.

Don't sweat it. There will always be people desperate enough for credit, and they'll drive themselves into bankruptcy anyway by overextending themselves way past their means.☕

Only 40 million? Dollars?
That amount is such a rounding error it’s a miracle it even made the news.

briskdrifter3 said:And then there are the other geniuses—the ones who think it’s perfectly fine to slaughter the chicken just to get one golden egg. They can act surprised when, after driving thousands of citizens—and even worse, thousands of businesses—straight into bankruptcy, the banks wonder why nobody wants to take out loans anymore or why business has completely dried up.

Let me lay it out for you again: everyone is just looking out for their own slice of the pie... You're watching what works for you, and the bank is doing exactly what works for them.... Honestly, if you aren't completely out of your mind, it should be obvious that some regulatory agency's whole job is basically to step in and declare you incapable of making a sound business decision...

I don't think I've ever heard anyone talk about killing a chicken for a single golden egg... I mean, sure, I'm all for slaughtering a cow for a few pounds of beef, or even the hen that lays the gold eggs... But you're starting to make up metaphors now, kind of like how Sijerkovic used to spin those old proverbs.😬

@ placidranger: 40,000,000,000!