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Ripple Effect

Yes, Banks Can Still Spark the Next Crisis

Loading ...Addison Wiggin

August 4, 2025 • 1 minute, 26 second read


Banksunrealized losses

Yes, Banks Can Still Spark the Next Crisis

With record retail money goosing the stock indexes higher, while insiders and hedge funds sell into the rally… we’re left wondering how long the rally can sustain itself.

In addition to the record buying of AI stocks, the speculative options market is at its highest level ever recorded.

Big Tech earnings have kept the party going on Wall Street, for the most part. The S&P 500, the Dow and the Nasdaq are all rallying today after a quick sell-off on Friday.

At times like this, you can only guess which snowflake will be the last to make the snowpack start sliding…

Here’s one hiding in plain sight: unrealized losses in the banking industry.

Turn Your Images On

Although there’s been some improvement, banks continue to operate under steep losses.

In March-May 2023, we saw 3 of the top 5 largest bank failures in US history.

The market barely noticed. Headline financial news barely discussed it. The Fed among other Wall Street actors were credited with swooping in and saving the day, just in time. Again.

The message is: Don’t worry, in a crisis, bank losses will be transferred from the banks to the taxpayers.

Easy peasy. Right?

Not so fast.

We’ve published research showing the Fed’s balance sheet has been even worse off than the regional banks since September of 2022.

And it still is.

The critical thing to remember, even amid relatively calm markets, is that there will be a next crisis. When it does happen, sectors sitting on “potential” losses will use the opportunity to “realize” those losses.

And so on.

Creating a self-reinforcing cascade of calamity. The next one could envelop the nation’s central bank at a very inopportune moment… for politicians, bankers and speculators.

~ Addison


The Ignorance of Experts

August 7, 2025 • Joel Bowman

Might it be that experts didn’t know all they claimed to know after all… that the climate is a complex phenomena largely beyond our comprehension, full of shifting dynamics, cascading interrelationships and natural feedback loops… and that maybe, just maybe, human beings are not the center of the universe we (ever so humbly) presumed we were?

A new report by the United States Department of Energy (DOE) certainly appears to suggest as much. Titled “A Critical Review of Impacts of Greenhouse Gas Emissions on the U.S. Climate,” the report was authored by a group of highly credentialed scientists, including, to the chagrin of those who seek to politicize everything up to and including the weather, the former Chief Scientific Officer of the Obama Energy Department.

The Ignorance of Experts
Confidence Games

August 7, 2025 • Addison Wiggin

So far this August, we’ve seen Powell under siege, inflation data in question, and a fresh wave of Trump tariffs — each enough to rattle investors even in isolation.

Yesterday, equities whipsawed after news broke of a 50% tariff on Indian imports, aimed at punishing Delhi’s ongoing purchases of Russian crude. By day’s end, the major indexes recovered slightly, but the tone of the market has clearly shifted.

Trump’s reciprocal tariff deadline — long advertised as a hard line — arrived at midnight last night. But not without drama.

In the final hours, Trump squeezed in one last round of changes: raising duties on India, surprising Japan with rates higher than expected, and teasing China with the possibility of similar action. Switzerland, hit hardest among U.S. allies, may cancel a major jet order in retaliation.

Confidence Games
From Two Centuries to 27 Months

August 7, 2025 • Addison Wiggin

In the past 27 months, more debt has been created in the U.S. than during the first 215 years of the Republic.

That kind of exponential move isn’t sustainable. Like tulip prices in 1637 or shares of Cisco in January 2000, it can’t last. The question isn’t whether this will collapse — it’s whether or not we get a massive market run first.

That seems to be in the cards — what Austrian Economist Ludwig von Mises called the “crack up boom.”

And it’ll be fueled by a combination of debt and the collapse of the purchasing power of the dollar. Not a company’s earnings or AI spend. That won’t be a typical bull market — it’ll be a terrifying one.

From Two Centuries to 27 Months
James Howard Kunstler: Suspicious Minds

August 6, 2025 • James Howard Kunstler

This enormous, drawn-out insurrection, composed of serial felony crimes, amounts to the greatest insult against the republic — the res publica, in Latin, the public thing — in the nation’s history. And now it is coming apart as an overwhelming majority of citizens, including now many Democrats, can’t avoid discovering what has happened in the country. Because lies are weak and the truth is sturdy and eventually truth prevails, even after an arduous struggle.

The old news media complex, the networks and the papers, are not reporting the recent disclosures by the Directors of the CIA, the FBI, and National Intel. What will it take to get their attention? Arrests and perp-walks of formerly important officials? And then, do they acknowledge and atone for their disgraceful participation in the events? Or pretend they couldn’t figure any of it out for years and years? Poor us, we didn’t know! Suddenly, it looks like many of these “legacy” news outfits are going out-of-business. They’re throwing their performers over the side like sinking ships casting off so much useless ballast.

James Howard Kunstler: Suspicious Minds