The Blubber

Per Business Insider

The Bank for International Settlements (BIR) is talking about a potential banking crisis that could happen with uncontrolled inflation. This was despite the bullish stock market as of press time.

The BIS published an annual report which highlighted how possible the banking system could experience 2008-like losses should the Federal Reserve fail to control inflation. The report also mentioned the bank failures of 2023, including the Silicon Valley Bank collapse in early March.

Austin Carstens, BIS general manager, warned of the possible 2008 financial crisis scenario. He stressed the importance of taming inflation.

Carstens: "The global economy is at a critical juncture... The key challenge is fully taming inflation, and the last mile is typically the hardest,"

In Canada, the Bank of Montreal, a Canadian multinational investment bank, expects a recession next year. The bank says the "likelihood of a recession is 99.9% in 2024.

BOM's Earl Davis said that despite this possibly being a policy mistake, the playbook suggests a recession could be next.

In January, Citigroup dropped its 2023 worldwide recession probability to 30% from 50%. This changed their previous 50-50 estimations of a worldwide recession happening in 2023.

This comes despite a WSJ report finding 61% of economists thought a recession is possible in the US in the next 12 months.

See flow at unusualwhales.com/flow.

Other News:

• Bank of Montreal Says 'Likelihood of a Recession is 99.9%' in 2024
• Citigroup Drops 2023 Worldwide Recession Probability to 30%, Down from 50%

Resources:

Business Insider