Yield Surge Will Send Banks’ Unealized Losses $140 Billion Higher To A Record $700 Billion

Despite at present’s modest pullback in charges which passed off after the 30Y briefly rose above 5% for the primary time since 2007, and was catalyzed by the worst (and most practical) ADP report since 2021, the truth is that charges have seen unprecedented strikes in current months, together with a +73.5bps rise in 10yr US yields throughout Q3, whereas 30yr yields soared +83.9bps, the biggest transfer since Q1 2009.

It is subsequently not a shock that there was a frenzy of inquiries into whether or not the spike in yields will result in one other spherical of “accidents” one thing which each Goldman and JPMorgan warned is more and more probably… and within the case of the latter even welcome, since any regional financial institution failure would imply that JPM would simply turn into even greater because it assumes (and with some luck, is paid by the FDIC to take action) the deposits of yet one more failed financial institution(s) – simply see what occurred in March when each regional financial institution failure meant JPM would simply absorb its good belongings whereas leaving the poisonous stuff to US taxpayers.

*CORRECT: DIMON: WHEN ASKED IF RATES CAN GO TO 7%, ANSWER IS YES

Translation: JPM urgently wants one other $100 billion in contemporary deposits courtesy of a regional financial institution sacrifice

— zerohedge (@zerohedge) October 2, 2023