...and market participants especially in US continue believing their banks accounting profits.
...the reason why these losses are unrealised is because they are not mark-to-market. The premise is that they don't have to be sold so despite being huge paper losses they don't have to recognise the loss.
...it is like if you bought a house and the price dipped -30% after you bought it, so you shrug off the paper loss because you are not going to sell it.
...but the balance sheet is impaired especially if interest rates stay high, as they have been going higher. So there may not be any recovery for some time. So you can't not recognise those losses indefinitely especially if the value continues to go south.
....well, the market does not care. What is amazing is that the market continues to bid up those bank stocks even knowing this.
Bank Crisis about to hit... US Banks have nearly a Half Trillion $ in unrealized losses. (increase of 33% from the prior quarter) No wonder Buffet has been exiting the banks
https://x.com/JoshPhilipPhair/status/1925758963569590658
