Bank failures

It is common to say “bank failures in the US happen every now and again”, as a reason to downplay recent collapses.

The below shows that’s true, but maybe not representative. Since 2014, there have been a smattering, often autocorrelated, bank failures.

The last 3, and possible a few more waiting in the wings, suggest that today is not quite representative of the past decade.

What to do?

Well, we just add it to the list of stuff that “prevents us from going materially overweight”. That is, we think, the best one can do.

Plenty of reason to think these were idiosyncratic examples of poor leadership/management, plenty of reason to think they represent (and add to!) a very tight credit environment that foreshadows further weakness.

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