Last week, Pam Martens, writing for Wall Street on Parade, reported that bank runs were happening at Silvergate Bank, a U.S. FDIC insured bank...

HNewsWire:

While the global financial system has not yet completely collapsed, bank runs that began in 2022 with the fall of FTX and the billions of dollars lost when depositors were unable to withdraw their funds continue to occur today in 2023, albeit without receiving top news attention.

Pam Martens of Wall Street on Parade revealed last week that bank runs were taking place at Silvergate Bank, an FDIC-insured bank in the United States.

Silvergate, a federally insured bank, has recently severed relations with cryptocurrency.

A depositor never likes to hear from a bank that holds his or her life savings that it is concerned about its "capacity to continue as a going concern." Regrettably, those exact lines were in a document made by Silvergate Capital with the Securities and Exchange Commission yesterday, which very much guaranteed that the ongoing run on deposits at Silvergate will continue with an increased feeling of urgency.

Silvergate Capital is the parent company of Silvergate Bank, a federally insured and taxpayer-backed bank that determined several years ago that it would be a good idea to become the go-to depository bank for crypto firms. Sam Bankman-now-defunct Fried's house of deception was one of them. According to federal prosecutors, accounts at Silvergate Bank included Bankman-crypto Fried's exchange, FTX; his hedge fund, Alameda Research, which prosecutors say looted his FTX crypto exchange customers; and North Dimension, a phony company posing as an online seller of mobile phones but actually laundering money for Sam Bankman-crypto Fried's enterprises.

When word got out about Silvergate's connections to FTX and Bankman Fried, there was a bank run.

Credit Suisse, Switzerland's second-largest bank, has seen a significant outflow of depositors as its shares continues to decline in 2023, despite the fact that bank runs began last October.

Credit Suisse plummets to new intraday lows as Wall Street's behemoths mysteriously shake off the contagion effect

Credit Suisse shares have yet to find a bottom. They fell to a new intraday low in Europe this morning, trading at the equivalent of $2.79, down more than 6% from their previous closing.

The growing anxiety that the exodus of client assets from Credit Suisse has not found a floor is fueling the continuous departure of Credit Suisse shares.

According to Reuters, the Swiss financial regulator, FINMA, is looking into comments made by Credit Suisse Group Chairman Axel Lehmann to the media in early December that implied client asset outflows had steadied.

Last week, it was announced that Blackstone had defaulted on a $562 million bond and was preventing investors from withdrawing funds from its $71 billion real estate income trust (BREIT).

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Blackstone defaults on $562 million in CMBS while continuing to obstruct investor withdrawals from a $71 billion REIT.

The destruction is coming fast and furious now that rising interest rates have broken the commercial real estate bubble.

Bloomberg reports this morning that Blackstone, Wall Street's largest commercial real estate landlord, has defaulted on a €531 million ($562 million) bond backed by a portfolio of offices and retail owned by Sponda Oy, a Finnish landlord it purchased in 2018.

While the private equity firm had sought an extension from the holders of the securitized notes to allow time to sell assets and repay the debt, the surge in market volatility caused by the Ukraine war and rising interest rates disrupted the sales process, and bondholders voted against a further extension, according to Bloomberg sources.

According to a statement issued Thursday, loan servicer Mount Street has ruled that an event of default has occurred because the security has now matured and has not been returned. The loan has now been assigned to a specific servicer.

"This debt refers to a small percentage of the Sponda portfolio," a Blackstone official stated via email. "We are unhappy that the servicer has not progressed our plan, which reflects our best efforts and, in our opinion, would provide the greatest outcome for note holders. We remain fully confident in the core Sponda portfolio and management team, whose top priority is to produce high-quality retail and office assets."

While Blackstone is understandably trying to downplay the news, the private equity firm is clearly still scrambling to stop the bleeding in its massive real estate portfolio, and on Wednesday it announced that it had blocked investors from cashing out their investments in its $71 billion real estate income trust (BREIT), as the private equity firm continues to deal with a flood of redemption requests. Read the article

Regrettably, this is likely just the tip of the iceberg in terms of bank failures and bank runs that await depositors, and I am not alone in stating so, since the United States and several European countries are already planning for bank runs.