This video builds on and extends the explosive (but largely overlooked AFAIK) analysis done by Chris Whalen, “Is JPMorgan Chase Insolvent?” While Whalen is imo the best independent bank analyst in the business, he doesn’t have a crystal ball. (At least I couldn’t find one when I ransacked his home many moons ago.) He put out that post, which is nominally about Dimon’s bank but covers the entire banking industry, on Monday, November 28, 2022. He thus didn’t have access to the F.D.I.C.’s Quarterly Banking Profile for the 3rd quarter of 2022, which came out three days later. Whalen’s analysis focused on the dubious valuations of bank assets, which is certainly germane as far as they go and are discussed in greater detail in this video.

The real action in the third quarter QBP, though, is on the liability side of the industry’s balance sheet. There we find evidence that aside from being broke, the banks know they’re tapioca and are panicking about it. 

But here’s the real kicker: the Fed isn’t helping the banks this go-round. It’s a new ballgame, and it goes by the name ALL. BAD.

You can find more detailed written treatments of this video and others I’ve done at John’s substack: