US banking turmoil is now bigger than the 2008 financial crisis – but the real storm hasn’t hit yet: economist Peter St-Onge

Economist Peter St-Onge says the current banking crisis is already bigger than the turmoil of some 15 years ago – and it’s not over yet.

In a new video, St Onge says the fallout in the banking sector has now surpassed the 2008 global financial crisis in terms of assets wiped out.

St Onge says investors should prepare for more crashes even though the Fed says otherwise.

Just hours after Federal Reserve Chairman Jerome Powell told America that “the US banking system is healthy and resilient,” he fell off a cliff as major regional lender BaQuest collapsed with more than 50% in aftermarket.

So, combined with the collapse of First Republic this past weekend, by assets, the bank crash in 2023 has officially surpassed the crash in 2008 and there seems to be a lot more to come from our “very healthy and resilient” banking system.

The economist believes the collapse of the First Republic and others is likely to be just the tip of the iceberg. Using the banking turmoil of 2008 as a reference, St Onge predicts that hundreds of banks will collapse in the next 12 months as the economy grapples with aggressive rate hikes by the Federal Reserve over the past year.

“The scary thing here is that, by 2008, premature crashes are only the beginning, the screaming prelude to an extinction-level execution of banks creeping to death.

In terms of raw numbers, the 25 US banks that collapsed in 2008 were followed by a drumbeat of 440 total banks in the following four years. That’s 110 (bank) a year, compared to two a year before the crisis. So we haven’t even begun to see what’s to come.

It usually takes 12-18 months for rate hikes to really hit the economy, and we’re barely six months away. So lining up against the 2008 crisis means the real storm won’t strike until another year. These are the first breezes of an incoming hurricane.”

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