Ensuring Digital Signature Lawfulness for Financial Services in the United States

How to eSign a document: digital signature lawfulness for Financial Services in United States

the US banking system is hanging by a thread official data shows that half of all banks across the country are at risk of insolvency right now in other words your money may not be safe at these financial institutions anymore and we should all start looking for alternatives on how to preserve our wealth today we will give you the details about the devastating crisis that is threat threatening people's deposits and explain why we could soon be facing a meltdown worse than the 2008 subprime collapse first you've likely heard about the bank collapses of 2023 the series of failures began with the fall of the relatively obscure silvergate Bank on March 8th that was quickly followed by the downfall of the significantly larger Silicon Valley Bank or svb on March 9th and SVP had over $120 billion in uninsured deposits now deposits exceeding $250,000 each are not covered by FDIC Insurance those depositors face the risk of losing all their funds over the insured amount this could have resulted in the collapse of hundreds of startup tech companies in Silicon Valley that had their working capital deposited at svb additionally there were much larger corporations such as Cisco and at least one major cryptocurrency exchange that had billions of dollars on deposit there these companies would have suffered substantial write Downs due to the size of their uninsured deposits on March the 9th the FDIC announced that the excess deposits were indeed uninsured and depositors would receive receivership certificates with uncertain value Val and no liquidity by March the 11th the FDIC reversed its decision and declared that all deposits would be insured the Federal Reserve stepped in stating that they would accept any US Treasury Securities from member banks in exchange for par value in cash even if the bonds were worth only 80% of par as most were that Sunday night they also shut down Signature Bank a New York baseed bank with cryptocurrency connections the damage continued on March 19th the Swiss National Bank forced a merger of UBS and Credit swis One of the world's largest banks as credit swis was on the Brank of insolvency finally on May the 1st the government ordered the closure of First Republic Bank which had over $225 billion in assets and it was sold to JP Morgan it was the most extensive bailout ever but the press in question remains once every deposit has been guaranteed and every Bond financed at par value what options remain for the next Crisis what can be done that hasn't already been attempted aside from nationalizing the banks after five Bank failes in two months and a trillion doll government bailout the crisis appeared to be over however that was a misleading Comfort Financial expert and Economist James Rickard stated at the time that the crisis was not over it was merely halime today investors seem at ease because they think the banking crisis has ended that's a significant error history reveals that major financial crisis develop in stages and include a quiet period between the initial phase and the critical phase as Rickards explained in the recent article this pattern occurred in 1994 when the spring bond market Massacre seemed contained in the summer but erupted into the Mexican tequila crisis in December it also happened in 1997 to 98 when the Asian financial crisis seemed to calm down in the winter of 1998 only to flare up into the Russia ltcm crisis the following August and September during the global financial crisis the initial distress in August 2007 that appeared contained was followed by the failures of Bear Sterns Fanny May Freddy Mack Layman brothers from March to September 2008 the average length of these Financial crises is approximately 20 months indicating that much can go wrong in the coming months in fact this crisis could reach the acute stage more swiftly this is due to technology that allows a bank run to occur at the speed of light with an iPhone you could initiate a$1 billion wire transfer from a failing Bank while you're having dinner with your family or watching your favorite TV show at home there's no need to queue around the block waiting your turn essentially the second stage at the crisis could erupt in an even more dramatic manner sooner rather than later the slow motion crisis can transform into a realtime crisis very quickly Additionally the regulatory response is quicker because they've experienced this scenario before this raises the question of whether Regulators are out of options since they've already guaranteed nearly everything leaving them with a few tricks up their sleeves it's crucial to distinguish between individual bank failures and a systemic banking crisis when individual Banks fail depositors and creditors are usually protected but stockholders can be wiped out in a systemic banking crisis the contagion spreads rapidly from bank to bank requiring the entire system to be rescued through a combination of blanket deposit guarantees and unlimited quantitative easing in the worst case scenario you either have to shut down the banks as FDR did in 1933 or nationalize them which some countries have done occasionally either a single bank failure or a systemic crisis could occur at any moment the actual trigger is somewhat mysterious and primarily psychological because the fundamental problems have always been there it appears that the quiet period is over we're now entering stage two of the banking meltdown the most recent data indicates that the Federal reserves recent interest rate hikes have heightened the fragility of the US banking system to such an extent that many institutions are at risk or failing if there is a run on these banks by uninsured depositors this vulnerability stems not only from a decrease in the value of Bank assets but also from a related issue the strong impulse uninsured depositors have to withdraw their funds during a perceived crisis leading to Bank insolvencies the FDIC recently published their quarterly Report with some alarming news they have a list of problem banks that are near insolvency ing to the report many banks could be at risk of failure as unrealized losses on Securities reached 5177 billion doar in the first quarter of 2024 and that's up from 39 billion unrealized losses represents the difference between the price Banks paid for Securities and the current market value of those assets this happened over the course of one quarter not year over-year not over a decade over a span of one quarter a span of just three months additionally 40 banks with over1 billion in assets have already reported unrealized losses exceeding 50% of their Equity Capital more than 200 smaller banks with lesser assets have issued similar reports even more concerning Economist and editor of the Daily Telegraph Ambrose Evans Pritchard recently reported that almost half of America's 4,800 banks are already depleting their Capital buffers even though they may not have to mark all losses to Market under us accounting rules that does not not make them solvent someone will incur those losses it's unsettling thousands of banks are underwater said Professor amid siru a banking expert at Stanford University he continued let's not pretend that this is just about Silicon Valley Bank and First Republic much of the US banking system is potentially insolvent a Hoover institution report by professor suu and a group of Bank in experts estimates that more than 2,315 US Banks currently holding assets worth less than their liabilities the market value of their loan portfolios is $2 trillion lower than the stated Book value these lenders include major institutions one of the 10 most vulnerable Banks is a globally systemic entity with assets over1 trillion dollars three others are large Banks zeru emphasized it's not just a problem for banks under 250 billion that didn't have to pass stress tests commercial real estate and Industrial properties are entering the early stage of a severe slump where we stand today is a nearly perfect storm said Jeff fine a real estate expert at Goldman Sachs rates have risen by 400 to 500 basis points within a year here and financing markets have nearly completely shut down we estimate there's four to 5 trillion dollars of debt in the commercial property sectors of which about a trillion is maturing in the next 12 to 18 months he stated now packages of commercial property loans cmbs are typically on short maturities and must be refinanced every 2 to 3 years borrowing surged during the pandemic when the FED flooded the system with liquidity that debt matures in late 2024 so far us commercial real estate prices have dropped by an average of 25% Capital economics expects a peak to trft decline of double that amount this will further damage the loan portfolios of regional banks that account for 70% of all commercial property financing this could create a doom Loop which accelerates a real estate downturn that then feeds back into the banking system said Neil shearing the group's Chief Economist that's incredibly alarming once again mortgage back Securities are at the heart of the problem sound familiar recall the subprime mortgage crisis of 2008 yeah when everything collapsed it was over around a trillion dollar in mortgage back securities that caused the bubble to burst we just went from sustainability to half a trillion in just 3 months this is a significant issue the most worrying aspect is that we don't know which banks are in trouble it could be my bank it could be yours the list is confidential to prevent the likelihood of Bank runs finishing off these institutions so we simp simply do not know what we do know is that the FDIC has the funds to replace only 1.17% of the qualified deposits in America if your bank fails first oh you'll get your money back after some months of waiting but what if your bank is further down the line good luck you know ladies and gentlemen we saw this happen with several Banks last year when only 12 were on the brink now that number is much larger last year we also saw that the FDIC made a plan for a bailin using taxpayer money that means if a systemic banking crisis occurs we will be the ones paying for it at the end of the day the root cause of this crisis lies in the erratic behavior and perverse incentives created by the fed and the US Treasury over over very many years culminating in the aggressive reversal from Ultra easy money to ultratight money now underway they first created interest rate risk on a massive scale now they're detonating the delayed Time Bomb of their own creation Chris whand from institutional risk analyst cautioned against a false narrative that places all the blame on Reckless Banks he said the feds successive open market intervention from 2019 through 2022 was the primary cause of the failure of First Republic as well as Silicon Valley Bank Mr wher noted that US Banks and bond investors such as Pension funds and insurance companies are holding the bag on $5 trillion of implicit losses left by the final blowoff phase of the fed's QE experiment since United States Banks only have about $2 trillion in tangible Equity Capital we have a problem he said he predicts that the banking crisis will keep moving up the food chain from the original outliers to mainstream Banks until the FED backs off and slashes rates by 100 basis points however the FED has no intention of backing off in fact it plans to raise rates further it continues to shrink the US money supply at a record Pace with $95 billion of quantitative tightening each month the harsh reality is that the world's superpower Central Bank has made such a mess of Affairs that it has to choose between two poisons either it capitulates on inflation or it lets the banking crisis reach systemic proportions it has chosen a banking crisis noted Ambrose Evans Pritchard so what's the bottom line well stage two of the crisis is already upon us and the effects will be devastating to financial institutions to the stock market the economy and of course our own personal finances that means you and me