Two weeks ago, at the start of earnings season, we warned readers that while giant money-center megabanks like JPMorgan were ok (in fact, they were more than ok, as they had become deposit monopolists and explicit beneficiaries of small bank failures, see the taxpayer funded gift of First Republic to JPMorgan), small banks were a ticking timebomb, for many reasons but primarily because the delinquency rate among small banks had soared to the highest on record, which with the Commercial Real Estate ticking timebomb set to go off again at any moment, guarantees more bank failures (and more Fed bailouts).
As a reminder, the big banks are fine (and getting bigger). It's the small banks that have big problems. #1? Record delinquency rates pic.twitter.com/K8KdLV4mTS
— zerohedge (@zerohedge) October 13, 2023
But it's not just the smaller banks that are getting sold: now that even Jamie Dimon has joined in the fray with his first sale of JPM stock, there is no bank that is safe and indeed after sliding 29% this year, lagging the S&P's 10% gain by the most on record, the KBW Bank Index has tumbled another 2% on Friday, putting the sector on pace for the lowest closing level since September 2020, weakening past levels reached earlier this year in the wake of regional bank collapses.
