By Spencer Brown | Townhall.com
AP Photo/Craig Ruttle
Following the biggest bank failure since the financial crisis of 2008, Moody's Investor Service has downgraded its rating of the U.S. banking system in the latest sign that President Biden's Monday morning attempt to assuage concerns went over like a lead balloon.
Moody's — one of three major rating entities — downgraded its outlook for the U.S. banking system from "stable" to "negative" on Tuesday morning "to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY," Moody's explained.
In addition to downgrading the entire banking system, Moody's also issued warnings for several individual banks "with substantial unrealized securities losses and with non-retail and uninsured US depositors" that "may still be more sensitive to depositor competition or ultimate flight" and end up "with adverse effects on funding, liquidity, earnings and capital."
The unrealized losses, specifically, have become substantial:
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steph pomboy @spomboy
I'm puzzling to understand how THIS isn't the only thing people are talking about today????????? Someone tell me about the rabbits. and fast!
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The specific institutions being monitored by Moody's for "potential downgrades" include INTRUST Financial, Western Alliance, Comerica, Zions Bancorp, and First Republic.
Markets, however, did not seem to move much on the news.
The recent issue with U.S. banks is one that came about, as Rep. Thomas Massie (R-KY) explained this week, through actions taken by the Federal Reserve.
The Fed took those actions in a bid to tackle inflation created by the Biden administration's tax-and-spend agenda. The Biden administration then stepped in, after banks failed amid a high interest rate environment, to bail out the failed institution, reacting to a swirling economic mess for which he's almost solely responsible. As always, Biden swooped in with an alleged "solution" to a problem he created. And it's straight out of the Big Government™ playbook.
As Dagen McDowell pointed out this week after the White House's non-bailout bailout of Silicon Valley Bank and Signature Bank, the Biden administration's latest botched response is also another refutation of his claim to stand for hardworking Americans.
