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What Are the Biggest Bank Failures in U.S. History?

Bank failures aren’t as uncommon as you might think. 564 banks have collapsed since 2001, although the majority occurred during the Financial Crisis…

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Two out of the three biggest bank failures in U.S. history happened in 2023.

FDIC

Bank failures aren’t as uncommon as you might think.

564 banks have collapsed since 2001, although the majority occurred during the Financial Crisis of 2007–2008 and resultant Great Recession, when 325 banks failed. 157 banks toppled in 2010 alone.

Back then, the culprit was toxic subprime mortgage debt, which affected nearly every aspect of American life. Millions of U.S. homeowners—many victims of unscrupulous predatory lending practices—did not understand the mechanisms behind their low-cost housing loans, and so when interest rates rose, they found themselves unable to make their monthly payments and defaulted as a result.

Banks had collateralized these mortgages into securities that could be easily traded, called collateralized mortgage obligations (CMOs). These debts were divided into tranches and categorized by risk level. Naturally, the riskiest tranches offered the juiciest yields. But as the underlying mortgages grew insolvent, the CMOs became worthless, unleashing a tidal wave of destruction throughout the entire financial system.

Mortgage lenders declared bankruptcy, and global investment banks like Lehman Brothers collapsed—even government-sponsored enterprises like Fannie Mae and Freddie Mac threatened to go under. In September 2008, the stock market crashed as the Dow Jones Industrial Average fell nearly 500 points, marking the beginning of an 18-month recession that was rivaled in magnitude only by the Great Depression.

Biggest Bank Failure of the Financial Crisis: Washington Mutual, Henderson, Nevada
Failure Date: September, 2008
Assets: $309 billion

Speaking of the Great Depression, the 1930s were an even more perilous time for banks: Nearly 9,000 banks failed, erasing $7 billion in depositor’s assets. Back then, there was no such thing as deposit insurance, which meant millions of Americans lost everything they had, forever.

Later, New Deal reforms such as the 1933 Banking Act—also known as the Glass-Steagall Act—exerted much-needed regulation over the country’s financial institutions and would lead to the formation of the Federal Deposit Insurance Corporation.

Biggest Bank Failure of the Great Depression: Bank of the United States, New York, New York
Failure Date: December, 1931
Assets: $200 million 

In the 1980s, another form of high-yield debt, this time known as junk bonds, would spur on a banking crisis with community banks. The Savings & Loan Crisis stemmed from the implosion of these risky securities issued by companies who need to raise cash fast.

Smaller banks had invested heavily to shore up their own balance sheets stemming from losses accrued through the era’s extraordinary inflationary pressures. As interest rates skyrocketed, S&Ls simply could not generate enough capital from their depositors to offset their liabilities.

When the smoke cleared, 1,043 savings & loan associations had failed, amounting more than half of the country’s total. Michael Milken, considered the be a poster child for securities fraud, went to prison for 2 years and was ordered to pay a $600 million fine.

Biggest Bank Failure of the S&L Crisis: American Savings & Loan Association, Stockton, California
Failure Date: September 7, 1988
Assets $30.2 billion

Surprisingly, during the COVID-19 pandemic between November, 2020 and March, 2023, there was not a single bank failure in the United States. How could that be? While lawmakers point to that as evidence of the banking sector’s strength and proof of the viability of the “stress tests” put into place through reforms such as Dodd-Frank Act, which were passed in the aftermath of the Financial Crisis of 2007-2008, the Minneapolis Federal Reserve Bank believes otherwise.

“Banks avoided large losses from the COVID-19 financial shock because of the fiscal support the government provided,” First Vice President Ron J. Feldman and Senior Financial Economist Jason Schmidt concluded. They believed the resiliency of the banking sector was due to the helicopter money provided by the CARES Act and its stimulus checks, which enabled businesses to stay afloat and consumers to continue to pay their loans during the crisis.

What Are the Top 3 Biggest U.S. Bank Failures in History?

When a big bank fails, it isn’t pretty. Here are the largest to topple, in order of assets:

1. Washington Mutual (WaMu), Henderson, NV ($309 Billion Assets)

WaMu, the country’s largest savings & loan association, engaged in so much subprime lending, it grew to be known as the “Walmart of Banking” because it catered to the lower- and middle-class customers that other banks avoided. More than half of its assets were connected to the housing industry.

While other banks were leaving the subprime sphere as the Federal Reserve began to hike interest rates, WaMu only expanded further: Its high-risk loan originations grew from 19% of its total assets in 2003 to an astounding 55% just three years later in 2006.

This dicey move would lead to the bank’s undoing as it incurred record rates of defaults and credit downgrades on its securitizations. On September 25, 2008, frantic depositors sparked a bank run, withdrawing $16.7 billion in deposits. WaMu declared bankruptcy and was placed into receivership by the FDIC. It was eventually acquired by JPMorgan Chase.

2. First Republic Bank, San Francisco, CA ($229 Billion Assets)

Eleven of the country’s biggest banks pooled funds for First Republic Bank, but not even a $30 billion lifeline could save it. The beleaguered regional bank catered to tech startups, such as student loan app developers. It had a niche and wealthy clientele, many of whom kept large deposits on hand that exceeded the FDIC’s $250,000 insurance limit.

By the time the bank declared insolvency on May 1, 2023, its ratio of loans had exceeded its deposits. On the heels of the failures at Silicon Valley Bank and Signature Bank, two credit ratings agencies, Fitch and S&P Global, downgraded the bank in March 2023. Rattled and lacking confidence, First Republic’s customers withdrew more than $100 billion, nearly half its total assets.

First Republic was acquired by JPMorgan Chase on May 1, 2023.

3. Silicon Valley Bank, Santa Clara, CA ($209 Billion Assets)

The first bank to fall during the banking crisis of 2023, SVB counted Airbnb, Pinterest, and Cisco among its customers. During the COVID-19 pandemic, demand skyrocketed for the tech products it funded, and the company enjoyed a boom in its deposit base between 2019 and 2022—its assets tripled to $211 billion.

But things turned sour in 2023, when SVB announced a $1.8 billion quarterly loss and credit downgrade, suffering from interest-rate risk on its long-term reserves, which lost value when the Federal Reserve raised interest rates in 2022 and 2023. A bank run by SVB depositors resulted in a loss of $42 billion in a single day.

The bank was overtaken by the California Department of Financial Protection and Innovation and placed under receivership by the FDIC on March 10, 2023, and was later acquired by First Citizens Bank.

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Crypto traders shift focus to these 4 altcoins as Bitcoin price flatlines

Bitcoin’s tight range trading points to a potential range expansion and that could trigger a trending move in LINK, MKR, ARB, and THETA.

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Bitcoin’s tight range trading points to a potential range expansion and that could trigger a trending move in LINK, MKR, ARB, and THETA.

Bitcoin (BTC) has been trading in a tight range for the past three days even as the S&P 500 fell for the last four days of the week. This is a positive sign as it shows that cryptocurrency traders are not panicking and rushing to the exit. 

Bitcoin’s supply seems to be gradually shifting to stronger hands. Analyst CryptoCon said citing Glassnode data that Bitcoin’s short-term holders (STHs), investors who have held their coins for 155 days or less, hold the least amount of Bitcoin supply in more than a decade.

Crypto market data daily view. Source: Coin360

In the short term, the uncertainty regarding Bitcoin’s next directional move may have kept traders at bay. That could be one of the reasons for the subdued price action in several large altcoins. But it is not all negative across the board. Several altcoins are showing signs of a recovery in the near term.

Could Bitcoin shake out its slumber and start a bullish move in the near term? Can that act as a catalyst for an altcoin rally? Let’s study the charts of the top-five cryptocurrencies that may lead the charge higher.

Bitcoin price analysis

The bulls have managed to sustain the price above the 20-day exponential moving average ($26,523) but they have failed to start a strong rebound. This indicates a lack of demand at higher levels.

BTC/USDT daily chart. Source: TradingView

The flattish 20-day EMA and the relative strength index (RSI) near the midpoint show a status of equilibrium between the buyers and sellers. A break below the 20-day EMA will tilt the advantage in favor of the bears. The BTC/USDT pair could then descend to the formidable support at $24,800.

Alternatively, if the price rises from the current level and climbs above the 50-day simple moving average ($26,948), it will signal that buyers are back in the driver's seat. The pair may then attempt a rally to the overhead resistance at $28,143.

BTC/USDT 4-hour chart. Source: TradingView

BTC has been trading below the moving averages on the 4-hour chart but the bears have failed to start a downward move. This suggests that selling dries up at lower levels. The bulls will try to propel Bitcoin price above the moving averages. If they manage to do that, the pair could rally to $27,400 and subsequently to $28,143.

If bears want to seize control, they will have to sink and sustain BTC price below $26,200. That could first yank it down to $25,750 and then to the $24,800-support.

Chainlink price analysis

Chainlink (LINK) surged above the downtrend line on Sep. 22, indicating a potential trend change in the near term.

LINK/USDT daily chart. Source: TradingView

The moving averages have completed a bullish crossover and the RSI is in positive territory, indicating that the buyers have the upper hand. On any correction, the bulls are likely to buy the dips to the 20-day EMA ($6.55). A strong rebound off this level will suggest a change in sentiment from selling on rallies to buying on dips.

The bulls will then try to extend the up-move to $8 and eventually to $8.50. If bears want to prevent the up-move, they will have to sink and sustain the LINK/USDT pair below the 20-day EMA.

LINK/USDT 4-hour chart. Source: TradingView

Both moving averages are sloping up on the 4-hour chart and the RSI is in the positive zone. The bulls have been buying the dips to the 20-EMA indicating a positive sentiment. If LINK price rebounds off the 20-EMA, $7.60 will then be the upside target to watch.

Contrary to this assumption, if Chainlink's price continues lower and skids below the 20-EMA, it will signal profit-booking by the bulls. LINK may then retest the breakout level from the downtrend line. The bears will have to sink it below $6.60 to be back in control.

Maker price analysis

Maker (MKR) turned down from the overhead resistance at $1,370 on Sep. 21, indicating that the bears are trying to defend the level.

MKR/USDT daily chart. Source: TradingView

The 20-day EMA ($1,226) is the support to watch for on the downside. If the price rebounds off this level, it will suggest that lower levels continue to attract buyers. The bulls will then make one more attempt to drive MK price above the overhead resistance. If they can pull it off, the MKR/USDT pair could accelerate toward $1,759.

Conversely, if the bears sink the price below the 20-day EMA, it will suggest that the bullish momentum has weakened. That could keep the pair range-bound between $980 and $1,370 for a few days.

MKR/USDT 4-hour chart. Source: TradingView

The moving averages on the 4-hour chart have flattened out and the RSI is just below the midpoint, indicating a balance between supply and demand. If buyers shove the price above $1,306, MKR pric could sprint toward $1,370.

Instead, if the price turns down and breaks below $1,264, it will suggest that the selling pressure is increasing. That could clear the path for a further decline to $1,225. A slide below this support may tilt the short-term advantage in favor of the bears.

Arbitrum price analysis

Arbitrum (ARB) is in a downtrend. The bears are selling on rallies to the 20-day EMA ($0.85) but a positive sign is that the bulls have not ceded much ground. This suggests that the bulls are trying to hold on to their positions as they anticipate a move higher.

ARB/USDT daily chart. Source: TradingView

The RSI has risen above 40, indicating that the momentum is gradually turning positive. If buyers kick the price above the 20-day EMA, it will suggest the start of a sustained recovery. The ARB/USDT pair could first rally to the 50-day SMA ($0.95) and thereafter to $1.04.

The support on the downside is $0.80 and then $0.78. Sellers will have to drag ARB price below this zone to make room for a retest of the support near $0.74. A break below this level will indicate the resumption of the downtrend.

ARB/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows that the bears are selling the rallies to the downtrend line. The bears pulled the price below the moving averages but could not sink ARB pric below the immediate support at $0.81. This suggests that the bulls are trying to form a higher low.

Buyers will again try to propel the price above the downtrend line. If they succeed, Arbitrum price is likely to start a strong recovery toward the psychological level of $1. Contrarily, a break below $0.81 can tug ARB price to $0.78 and subsequently to $0.74.

Theta Network price analysis

Theta Network (THETA) soared above the 20-day EMA ($0.61) on Sep. 23, indicating that the bulls have absorbed the supply and are attempting a comeback.

THETA/USDT daily chart. Source: TradingView

The bears have pulled the price back below the 50-day SMA ($0.64) but the bulls are expected to defend the 20-day EMA. If THETA price turns up from the current level and climbs above the 50-day SMA, it will enhance the prospects of a retest of $0.70.

This is an important level to keep an eye on because if it is scaled, the THETA/USDT pair may reach $0.76. This positive view will invalidate in the near term if the price turns down and plunges below the 20-day EMA. That opens the door for a potential retest of $0.57.

THETA/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows that the bears are protecting the overhead resistance at $0.65. If buyers want to sustain the bullish momentum, they will have to drive THETA price above $0.65. If they do that, the pair is likely to start a new up-move toward $0.70.

The 20-day EMA is the important support to watch for on the downside. If bears sink the price below this support, it will indicate that the bulls are closing their positions. The pair may then descend toward the support at $0.58.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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Mortgage rates get close to the yearly high of 7.49%

Mortgage rates started the week at 7.28%, got as high as 7.47%, and ended at 7.39%. That’s close to the yearly high of 7.49%.

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Mortgage rates shot up last week after a hawkish Federal Reserve meeting, even though they didn’t raise rates. In addition, jobless claims data had another solid print, showing that the labor market hasn’t broken yet, which led to more selling of the 10-year yield. Mortgage rates did find some relief on Friday as bond yields headed lower. 

On housing inventory, new listings data saw a small decline last week, but active listings grew at a healthy clip. Purchase application data had another positive week, pulling off back-to-back positive prints.

Mortgage rates and the bond market

Last week was wild for the 10-year yield, as the key support line that I have been talking about for weeks broke after the Fed meeting, sending the 10-year yield to highs last seen in 2007. The 10-year yield fell on Friday, bringing some relief, but we got very close to yearly highs for mortgage rates. Mortgage rates started the week at 7.28%, got as high as 7.47%, and ended at 7.39%. The yearly high is 7.49%.

I have noticed for weeks now that the spreads between the 10-year yield and mortgage rates are better, so rates didn’t hit new highs last week, even with the 10-year yield breaking to new yearly highs.



The Fed sounded hawkish in their talk on Wednesday, but their rate hike cycle is over now, with the possibility of only one more rate hike if they think it’s warranted. The labor market isn’t as tight anymore, but jobless claims had another solid print and are near monthly lows. The four-week moving average for jobless claims is 217,000 — far from the key level of 323,000 level that I think would trigger a Fed pivot.

Weekly housing inventory data

Whenever mortgage rates rise, I fear that the weekly new listings data will decline more aggressively because homebuyers simply throw in the towel on listing their homes to sell because higher rates make it less attractive to sell and buy another home

Last week on CNBC, I talked about how I still believe that we will see some flat to positive year-over-year data because we have had to deal with higher rates for longer and we haven’t see new listings data take a meaningful fall lower. A lot of this has to do with this data line trending at the lowest levels ever. I explained my premise here in this interview on CNBC.

We have had some volatile weekly numbers in the new listings data recently, but even with the mortgage rate spike, the decline was orderly, as it has been all year. So, I am not worried about another leg lower in the data.

  • Sept. 15: 61,852
  • Sept. 23: 59,107



There is some positive news: weekly active listings grew 9,312. This is not at the levels that I think we should see with mortgage rates this high, which would be between 11,000-17,000 weekly, but it’s good enough, considering that we are almost done with September. I am a very pro-supply person because more supply brings balance. It’s been hard to grow the housing supply this year as home sales are stable compared to last year’s massive collapse in demand.

According to Altos Research:

  • Weekly inventory change (Sept. 15–22): Inventory rose from  518,626 to 527,938
  • Same week last year (Sept. 16-23): Inventory rose from 552,042 to 556,865
  • The inventory bottom for 2022 was 240,194
  • The inventory peak for 2023 so far is 527,938
  • For context, active listings for this week in 2015 were 1,198,033

Historically, one-third of all homes have price cuts every year. Last week’s price cuts were lower than last year at the same time by 4%. This is happening with rates over 7%, too, and part of the reason is that housing inventory has been negative year over year since mid-June. Last year, inventory grew fast as the mortgage rate shock toward 7% created faster and higher price-cut data.

The housing market still has major affordability issues, and we are seeing a higher number of price cuts than in 2015-2017. Back then, we ran at 33%; in 2018 and 2019, it was 36%.

  • 2021 28%
  • 2022 41%
  • 2023  37%

Purchase application data

Purchase application data was 2% higher last week, making the year-to-date count 17 positive prints, 18 negative prints, and one flat week. If we start from Nov. 9, 2022, it’s been 24 positive prints versus 18 negative prints and one flat week. The week-to-week data has gotten softer since mortgage rates have been trending above 7%. However, it’s not crashing like it was last year.

The week ahead: Housing and inflation data

We have another week of housing data ahead with new home sales, pending home sales, the S&P CoreLogic Case-Shiller home price index and the FHFA home price index. The pending home sales data should come in soft with the recent spike in mortgage rates. Also, we have the PCE inflation report, the main inflation data that the Federal Reserve tracks. As always, the Thursday jobless claims data is the key for this cycle and mortgage rates. 

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I Say We’re Setting Up For A Major Bottom

It’s almost impossible to call market tops and market bottoms using basic technical analysis tools like price and volume. Don’t get me wrong, that combination…

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It's almost impossible to call market tops and market bottoms using basic technical analysis tools like price and volume. Don't get me wrong, that combination is my favorite during trend-following periods. But trying to spot bearish reversals is difficult when price action keeps riding higher and higher. The same is true in trying to spot bullish reversals when prices keep moving lower and lower. Maybe that seems unconventional to hard-core technicians, but I believe it's the reality. Too many folks say "when this line crosses that line, then this will happen". To me, that's following technical analysis and wearing blinders. Just my two cents.

I use technical price action to confirm what other signals are suggesting. We get plenty of signals on a regular basis - some short-term in nature, others long-term - if we're only willing to listen. While I've been bullish since June 2022, I do recognize short-term warning signals that tell us that risks of remaining long have increased substantially. In mid-July, I turned very cautious short-term and discussed those signals in a "Your Daily 5" episode that aired on July 19th. Let me pull up an S&P 500 chart, so you can see where U.S. equities stood when I fired this warning shot:

There were several reasons for the stock market bulls to hit quicksand. Tesla (TSLA), a Wall Street darling and a favorite stock of mine, suggested a possible 20% drop. That call aired the day of TSLA's top and TSLA fell closer to 30% in less than one month. These signals work and help us to manage risk! As I always say, they do NOT guarantee future price action, but they make us aware of increasing risk and that's how you invest more successfully. Since that July top, I've encouraged our EB members to tread very cautiously, whatever that means to each individual member. To some, it's being in cash. To others, it might simply mean to avoid leverage on the long side. But this cautious period is coming to an end.

If you want to see what was discussed on July 19th and why I felt the stock market was in short-term trouble, check out the Your Daily 5 recording on YouTube!

I absolutely LOVE when my signals take the opposite view of the masses. And now that everyone believes we're resuming the prior bear market, my signals are saying HOGWASH. Could we continue to proceed lower? Sure. There are never any guarantees with the stock market. But I see signs that suggest shorting is a VERY HIGH RISK strategy, with those risks growing every day. I'm discussing one major reason why in our FREE EB Digest newsletter that will be published early Monday morning, before the stock market opens. If you're not already an EB Digest subscriber, it's 100% free with no credit card required. Simply CLICK HERE and enter your name and email address. I'll discuss Reason #1 to turn bullish tomorrow morning. And I'll also focus on other reasons to be thinking bullish thoughts when I publish the EB Digest on Wednesday and Friday. Don't wait until it's too late. Check them out NOW!

Happy trading!

Tom

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