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Ripple Effect

Data So Bad, The Fed Buried It

Loading ...Addison Wiggin

July 28, 2025 • 1 minute, 28 second read


banking systemFedunrealized losses

Data So Bad, The Fed Buried It

The Federal Reserve is sitting on a time bomb…

It has over $468 billion in unrealized losses.

That reflects assets on the balance sheet that are trading for much lower than what the bank paid for them.

Yes, that’s the Fed’s the job as “lender of last resort.” They buy stressed assets, swap them out with higher-quality ones, and then either absorb the loss or wait for prices to improve.

But here’s trouble. The Fed isn’t alone in holding unrealized losses.

The commercial banking system also saw its unrealized losses soar as the Fed started hiking interest rates in 2022. Three of the largest bank failures in US history occurred between March and May 2023.

It got so bad, so quickly, the Fed discontinued the data partway through the year:

Turn Your Images On

America’s banks were in trouble before the Fed finished hiking interest rates – so much so that
the central bank discontinued reporting the data.

Silicon Valley Bank (SVB) – the second-largest bank failure in U.S. history in 2023 – grabbed the most headlines.

SVB had total losses of $16.1 billion alone—nearly 25% of the losses reported in 2022 a year earlier.

Today, with interest rates still relatively high, commercial banks continue to sit on massive losses.

The Fed’s existence is a paradox…

On paper, it’s supposed to smooth out economic cycles.

In reality, it tends to exacerbate them. Each crisis that brews is larger and more far-reaching than the last.

Since the 1987 crash, each crisis—which should be a time to clear out bad debts and start fresh—has been covered up with more and more freshly printed money.

Only this time is different.

The Fed became insolvent for the first time in its history in September 2022.

The crisis is coming to a head.

~ Addison


The Hindenburg Five

February 24, 2026 • Addison Wiggin

The stock market “rebalancing” is a polite way to put it. Energy and health care are getting a healthy boost. But tech hardware and software makers are still getting dressed down and have been asked to report to the principal’s office.

The great rotation underway has triggered a series of “Hindenburg Omens.” Five have occurred in recent weeks.

The Hindenburg Five
Piercing The Veil

February 23, 2026 • Addison Wiggin

The S&P 500 has traded in a 3.7% range over the past two months — less than half the 20-year median of 8.6%. One of the tightest ranges in modern history.

In trader parlance, the indexes are “flat,” a setup that often materializes before a sell-off at the top after a multi-year bull market.

Goldman Sachs told its own traders to be aware that institutional trading activity resembles a VIX reading near 35. Rather than a reading of 20, where the VIX has been trading over that same 2-month period.

The U.S. software ETF, IGV, tested its April 2025 lows last week and trades roughly 35% below its peak. The “SaaS-pocalypse” in software companies reflects the fear of Citrini’s 2028 scenario happening in real time.   That divergence now exceeds the spread seen at the peak of the Great Financial Crisis.

Under the surface, the “great rotation” we wrote about last week is threatening to widen.

Piercing The Veil
Oh. Canada

February 23, 2026 • Addison Wiggin

Despite its overly-educated 40-million-plus population, on a GDP per capita basis Canada is null. Collectively, the Great White North would rank as America’s second-lowest state, coming in above Mississippi, but below Alabama.

Oh. Canada
Matt Milner: SpaceX + xAI: What It Means for You

February 20, 2026 • Addison Wiggin

SpaceX is the most valuable private startup in history — and if its success continues, it might become the most valuable public company in history.

After all, as Musk famously said in 2023, “I have never lost money for those who invest in me and I am not starting now.”

For investors, SpaceX has been a wild, joyful ride — and now the journey continues!

Matt Milner: SpaceX + xAI: What It Means for You