As a result trillion of dollars in loans banks have made are under water. Their cost of funds are more then they return on the loans they have made, Fueled by the lowest cost of funds in the history of banking the fucks really fucked up big time.
Any idiot even a banker or a wallstreeter can appear to be a genius when your costs of funds is ZERO. Its hard for even bankers to lose money in real estate and stocks when you fund the projects with free money and endless or stimulus from the FED balance street.
Unfortunately every orgy does come to a end and their is a day of reckoning. And its now here for bankers and wallstreeters and real estate moguls. And half the banks in America over the next years will fail.
Now its a grab for return. Depositors were happy with no interest on their account balances in a zero rate world. All that is now changing. Money market funds, which invest in very short-term, debt, in March enjoyed their third-best month of inflows ever, according to Crane, as investors spooked by the banking turmoil poured about $345 billion into these funds. While the 25 largest U.S. commercial banks saw deposits climb $18 billion in March, smaller banks’ deposits dropped $212 billion, according to Federal Reserve data. The 100 largest taxable money funds tracked by Crane yield more than 4.6% on average, (you can make 5% in far safer US Treasury Tbills) while the average rate on savings accounts nationwide is 0.37%, according to DepositAccounts.com, a unit of LendingTree. The flood of cash into money market funds means they now have a record of more than $5.6 trillion in assets. Some banks have sought to hold on to depositors by offering higher rates amid the recent bank failures–but some of those higher rates have already evaporated. Since March of last year, money fund yields have climbed 4.13 percentage points, or 97% of the increase in the effective federal-funds rate over that period, while the average rate on banks’ three-month certificates of deposit offered to retail customers climbed just 0.32 percentage point, or 8% of the effective federal-funds rate increase, the New York Fed found. The bigger the bank, the more likely they haven’t raised yields. The banks that have a lot of deposits already don’t need to pay up to bring in more.
But their is a better deal out there in a place to put your money 1000% guaranteed to be their for you no matter what. Let me preface my recommendations with two things you must know.
FIRST: The US will not default on its debt as the ha ha ha leaders play games with the debt ceiling.
SECOND: Lock in shorter term instruments because inflation is is NOT dead and the fed is not Not NOT done raising rates.
I urge to cash in ALL retirement accounts… Do not be fooled by so called US treasury funds offered by Fidelity and the like. You put your money in US Treasuries HELD IN YOUR NAME. The best way to buy US government treasuries is through treasurydirect.gov
I recommend you buy two instruments at the present time.
GTUSD3M: Which is a 90day Tbill yielding a whopping 5.07%
or
GTUSD6M: Which is a 6 month Tbill yielding a incredible 5.02%