Problem? the fed chairman, jerome powell, the president, jamie dimon says we re done. this problem is over. look at the asset comparison. 2008, 25 banks went down. we re already passed that with this with three banks, charlie. by the way, that doesn t count all the banks in 2008, just so you know, that they bailed out. they bailed out citi group, which is a trillion dollars in deposits. it s apples and oranges. what you re saying is right. we have a real problem. after jerome powell said all is fine and kevin bacon in animal house before he got run over, bank stocks just chanced. nobody believes him. that s the problem. nobody believes joe biden and nobody believes yellen. this is a real problem. you know, i m going to be working late on sunday because there may be another bank failure. martha: yeah. i ll be curious to know where that story goes with whether or
Rates you earn on that stuff lag the market. the market is about 4 to 5%. you see what i m saying? 4% versus 5%. it s more safe. so they have a real problem. it stems back to fiscal policy. if you re going to print as much money as the fed did and screw around with incentives. people will give out mortgages and invest in see-through buildings. that s what happens. on top of that, the way capital is raised and structured at banks, it s based on treasury bonds which have lost value now because of the highest interest rates. we re in a pickle. hopefully we can grind through. martha: they flooded the market with so much money and pushed interest rates up and up and up. and the banks don t are irresponsible in the way they handle that in terms of how they shift their position or not. i want to put this full screen up. people say oh also, why is everybody saying it s not a
The other is the capital that they keep as assets. they bought it at the height of the market before the first tightened interest rates. this is a problem. how do you get out of it? it s difficult. more banks will fail. i don t know if pacific west will fail. but it s now a penny stock. it s at $3. this time last year, i believe pac west was trading at $40 a share, this is a really bad problem. there s not a lot of confidence in the banking system right now. people are pulling their money out of banks. some of the solutions i hear coming out of the white house probably won t work too well. one solution is to guarantee all deposits. that could happen. so instead of the $250,000 limit on the fdic, you do everybody is covered. if your money is in a bank, if it fails, it s safe. guess what? people will still pull their money out. bank deposits, the interest
Safe and sound. martha: charlie gasparino joins us now. hi, charlie. unravel this for us. how should we read what is going on today with these banks? we re in deep do do, i m afraid, this is a bad martha: is that a technical measure? that s an economic term for something i can t say on air. martha: a technical analysis. we have three banks. each that failed were considered one-offs. there s no such thing as one-offs. no such thing as three-offs. the same risk taking that these three banks took is duplicated throughout the banking system, particularly in the mid size banks, the regional banking system. what my sources are saying, about two dozen banks have similar balance sheets. that means that they have assets that are under water. some of those are loans, some of them are commercial loans. commercial real estate isn t doing too well.
American banking association. intervention was necessary to protect the broader u. s banking system. and similar actions could be warranted if smaller institutions suffered deposit runs that posed the risk of contagion. she s basically saying there, senator smaller mid size banks. if you fail to we ve got you. above the $250,000 fbi. see insurance threshold is that necessary? well if she is projecting absolute confidence, because what we had was a classic run on a bank. we had silicon valley have billions of dollars, withdrawn within a few hours, driven by kind of internet communication and the situation with silicon is very different than most banks. they had a huge investment in bonds, which meant they were incredibly vulnerable to a rise in interest rates. but now we have people saying well,