Start Of Financial Crisis? Former FDIC Chief: Banks Are Still ‘Vulnerable’ | Thomas Hoenig

Thomas Hoenig, former President of the Kansas City Fed (1991-2011), former Vice Chairman of the FDIC (2012-2018), and currently the Distinguished Senior Fellow at the Mercatus Center, says that the banking system is still "vulnerable". Two days after the filming of this interview, regulators closed Philadelphia-based Republic First Bank on April 26. Hoenig also discusses his outlook on the economy, inflation, and monetary policy.
*This video was recorded on April 24, 2024
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0:00 - Intro
1:30 - Banking sector still 'vulnerable'
12:30 - Bank run and financial collapse
14:50 - FDIC and cryptocurrency
18:05 - Inflation outlook
22:54 - Fed cuts this year?
24:10 - Why have a 2% inflation target?
28:39 - QE and inflation
29:54 - Fed policy and other central banks
31:50 - QT and asset prices
32:47 - Fed's forward guidance
36:00 - How Fed decisions are made
37:00 - Politics and the Fed
37:34 - Fed's performance in 2024
#economy #bankfailure #federalreserve

[@TheDavidLinReport]

Republic First Bank was shut down this week. Are more bank failures next? Is a systemic financial crisis in the works? Comment below and don't forget to subscribe! FOLLOW THOMAS HOENIG: Mercatus Center Discourse: www.discoursemagazine.com/ Substack: www.finregrag.com/

[@edwardk3]

Should zellinski buy it out?

[@dthorne4602]

No. Why would there be a financial crisis?

[@chrysisd]

Mr Hoenig answered all questions in so much detail. This interview was truly enlightening. Thank you 👏

[@simonfowler698]

are you serious ? With respect to him & you he shows how little they understand or that they are complicit in the alteration of the system. he says in one breath we will back stop the banks they wont fail but then say no we wont back stop crypto institutions because that would send the wrong message & promote irresponsible financial conduct. so essentially hes saying yep the banks cant go crazy with their irresponsible investments & they have little risk! He even said that 25% of collateral is guaranteed by the fed! that is why we are here now in this situation!! Then the explanation of the inflation rate LOL what a joke its just a number we came up with ??? seriously if i was this unprofessional in my job im done in 5 mins. This was really i opening & I think you can see it in Davids face too he cant believe this is the best of the best in the financial field? Please correct me if im wrong but I have very little faith in these guys

[@verypleasantguy]

They kept on telling us how horrible China is, how China's economy gonna collapse, every single day, for the past 10 years

[@jazzbeau507]

Great guest ....great host. Thanks David; Please invite Mr. Hoenig back 2 to 3 times a year. Thank you.

[@majormoolah5056]

This is the most horrifying interview I have seen in a very long time. Mr. Hoenig literally came out and said that the US banking system is insolvent and only kept afloat by a US government guarantee. He also said that the government essentially has to bail out any bank that fails or confidence in the whole system goes. I mean, this is a disaster waiting to happen. This means a never-ending series of bailouts until the end comes.

[@ivivivir]

That is the case since 2008 so do not get surprised.

[@majormoolah5056]

@@ivivivir The Silicon Valley Bank bailout has made the 2008 time bomb even bigger though

[@_m_K_.]

Most of "us" that follow contrarian or alternate financial news know and realize this. This is just an insider confirming the obvious. I give him credit, he has the dignity and self respect to say the emperor has no clothes.

[@kevinyaucheekin1319]

Until the Fat Lady sings. 😅

[@kylecollins7079]

Wow David keeps rolling out the hits

[@USGrant21st]

Wow David, how do manage getting such fantastic guests?

[@lepton31415]

it's the hair

[@larslarsheim1741]

Ok..no bailouts except for all banks

[@stephengoodwin6403]

or bail-in's

[@simonfowler698]

@@stephengoodwin6403 exactly this interview was a real eye opener! he is confirming yep banks go do your dodgey deals we got your back but crypto or any one else no way

[@laro802]

The rich get bail-outs, the poor get hand-outs, and the working class gets screwed.

[@2ferone86]

Privatize the gains and socialize the losses. Fractional reserve lending will become fictional reserve lending, so you can lie about how much gold you even have. Something like bitcoin is too risky though. Bailouts! 😂

[@pfschuyler]

Yes 100% no bailouts. Except, they had to obliterate Capitalism.

[@guinascimento4180]

This os the most honest conversation you will ever hear about bubble, debt monetiztion and the role the Federal Reserve has in it.

[@scottray9021]

Awesome guest. Finally have some truth about how the FED works and makes decisions.

[@adiintel1]

To protect retail/commerical banks at the cost of debasing the Usd thus stealing people's savings through inflation? 🤷

[@godsservant2835]

What an amazing interview. Give this guy a medal for unpacking the Fed’a position and moves moving forward. Bring him back !

[@leonlobos9718]

Your best interview to date!!!! Thank you for your work.

[@bbot21]

What valuable insight from an "insider". He chooses his words carefully but you can tell he is, for the most part, honest, logical and realistic.

[@larryseibert4102]

Excellent conversation. Please invite Tom back again soon. Great to hear from someone who has actually been in these positions and knows the mechanics.

[@bibibachmd9995]

Thank you David. One of the best interviews.

[@RobertojavierSilvaharth-ub3pz]

The Fed takes fuzzy logic to a whole new level; if they were not the Fed, they would be inmates...

[@alireza3474]

If you want to learn how to lie….your watching a professional.

[@rhysfastiggi4345]

David that was the best and most informative interview you have ever posted. Great questions. Thank you very much.

[@dorispowers9060]

Cut rates ,are you kidding me. The conversation should be about how far to RAISE the prime rate. The inflation rate is much higher the the government reports. To many things are left out of how inflation is measured. Those things like rent, house priced,health care are killing the middle class. Look, even the USPS is raising rates for a stamp in July by 7 %. This marks the 3rd time in a year the stamps have been increased. That's the government agency telling us that inflation is higher than reported. 😢

[@lesleyjohnson8488]

Yeah. The CPI is a joke

[@trevorsullivan7320]

But the rates on the debt are the other side of the equation that mean we are doomed if we do and doomed if we don't. We are in the golden age, get your yolo's out now!

[@slhug8624]

Excellent interview! Thank you!

[@bkfabs]

Nice interview, David. Excellent questions and a very informative guest.

[@edmitiu7383]

Thank you Gentlemen for the usable info.

[@mysteryman480]

This was one of the best guests so far.

[@mrlarry999]

Fantastic interview David. It’s nice to hear from a guest like Tom with his credentials, and to hear his perspective. Great questions, and I found Tom’s answers to be very straightforward and informative. 👍🏼👍🏼

[@Ali-ex4uk]

Great interview, thanks ❤

[@markf4968]

Great interview but doesn't make me feel any better about our system.

[@tenplus1025]

Nobody does it better than D Lin!

[@liamjamesburke7326]

Excellent interview. Mr. Hoenig's a legend.

[@bbustin1747]

Banks speculated taking all that risk on those extreme low rate loans….. 😂

[@993C2S]

Wonderful guest. Please bring him back often. Thank you.

[@JacquelineSkene]

Hope you have switched to the recommended Quantum Financial System XLM and XRP?

[@stephencoates4549]

A very intelligent man and call's a spade a spade. Bring him back so the public knows what's happening and can make decisions for themselves instead of being feed BS and lead down the wrong path

[@stephencoates4549]

Thank you David, I would love to hear from him on a regular basis due to his honest, knowledgeable no bull market position.

[@angelika1586]

thank you David and Mr. Hoenig such a good interview, honesty is so important for informed consent :)

[@cabragooncabulous4082]

This gentleman was great! Thank you David. He should be next pick for treasury secretary. Tell Govt congress how it is.

[@c00121314brave]

Seriously guys and gals David Lin is the gift that keeps on giving some of the questions are just excellence 👏!!

[@inflationmillionaire-df3mn]

There's a lot of cars that are being repossessed commercial real estate that is repossessed and most underwater

[@jj3682]

David has become one of my favorite interviewers on this platform. He always asks thoughtful questions in a respectful manner even if they challenge a speaker's perspective. He also lets his speakers talk without injecting his own opinions. He doesn't take over the conversation and steer it the way he wants it to go. That is becoming more difficult to find. David, you're a gem, I appreciate what you do!

[@Mr8675309ful]

What a great guest David. Both of you nailed it, you with your questions, & Tom with his insight. I love listening to these former insiders. The timing of his appearance was also perfect, with the elections looming in November. PLEASE make him a regular on your show.

[@jj3682]

Great guest! Truly enjoyed this!

[@mycameraview]

Great interview, David!

[@sbar39]

Honest man factual and unemotional 👍

[@terifong9816]

Great interview!

[@JeremyHelm]

15:56 I have no problem with speculation, as long as you're willing to take the loss

[@markperl5900]

Thanks David. Another cracking interview 🤝🏻

[@JacquelineSkene]

Hope you have switched to the recommended Quantum Financial System XLM and XRP?

[@cambriawellness3102]

Good questions!

[@commonsense6967]

Thank you, David, for having Mr. Hoenig on.

[@hanzn6784]

They all assume that recession automatically means lower inflation as if we have never had both at the same time

[@conduit242]

Banks are the speculation

[@lrww5673]

Great interview with Thomas. As others have said, get him back again in the near future. Enjoyed this!

[@peggyharris3815]

Business as usual. (We wont talk about what 'usual' means).

[@stevencrane5854]

Excellent interview.

[@RobertojavierSilvaharth-ub3pz]

The short version: Capitalism for the poor; socialism for the rich...

[@prolific1518]

Aka capitalism... Greatest trick ever pulled has been the rich tricking the population into believing in capitalism. The rich get all of the benefits and very little of the consequences. The poor get all of the consequences and very little of the benefits. The next greatest trick was parlaying capitalism into "democracy" where the poor are given the illusion of choice. Democracy breeds complacency and will always end in an oligarchy where the poor think they have genuinely chosen their leaders. Once the poor realize the truth, the house of cards crumbles. Take a guess where the US currently is in that process.

[@prolific1518]

And KZbin censored my comment without a single "bad" word in it.

[@Namegoeshere-op9hg]

Steal from the poor and illegally give to the rich. Stealing isn’t part of capitalism or socialism. The whole right-left idea is a red herring to keep stupid people busy as they f*ck us all through the dollar.

[@andrewperez7138]

Corporatism not capitalism

[@verypleasantguy]

They kept on telling us how horrible China is, how *_China's economy gonna collapse_* , every single day, for the past 10 years

[@Slide61]

All the consequences taking risk on the public. All the reward to the person/institution taking the risk.

[@ivivivir]

Good guest. Thanks David!

[@mairelordan4539]

Well the fact you didnt pass out when the Thomas Hoenig liked your questions and is happy to come back is proof of your professionalism 😊🎉

[@timothytimmerman1136]

He is such a good interviewer.

[@rossallen7667]

Excellent guest.

[@glenndallaire3449]

Very informative interview. Thank you gentlemen.

[@JacquelineSkene]

Hope you have switched to the recommended Quantum Financial System XLM and XRP?

[@randyrice8411]

Wow! I like that guy! Absolutely enjoyed listening. Thank you for your insight!

[@jsvi]

Thank you Sir. I appreciate the light of reason and wisdom in this overly confusing area. Too many fly by night commentators have created unreal expectations about investing in whatever asset is for sale. Your clarity is appreciated. Thank you Mr. Lin.

[@caseyrindal1815]

Once a fed banker always a fed banker. Never tell the truth about what a mess we're in.

[@levratalex4929]

Great content

[@gamano7905]

Good interview😀

[@jeffreydurrance5400]

I haven't watched the video, but from the intro I can see that the discussion will be about monetary policy which the FED controls, not the fiscal debt that government spending is the cause of.. the real source of the inflation. We can't afford the debt repayments at a higher interest rate, it's already more than the defense budget

[@patentexperts1675]

He talks a good game and if the FED actually followed Thomas's description of the way things operate we would never of been in this mess.

[@jonh7054]

I watched another great interview with Thomas Hoinig on Thoughtful Money with Adam Taggart. Adam like David gives great interviews and sensible advice and information as to what is happening in the economy.

[@christianmyrick7390]

Bleak. I appreciate his candor.

[@Slide61]

'Financial innovation' is what got us here.

[@crossbigdaddy]

Lagging indicator? And we trust those numbers? LOL😂😅😂 And to top it off we are listening to a dinosaur! 😅😅😅

[@vallmak]

Legend!

[@user-wj9ld9vm6y]

Very interesting!

[@cassandratq9301]

Best guest ever.

[@jcgoogle1808]

Great discussion, great questions,. Toward the end I was hoping you would ask if he gave any credibility to the Phillips curve. There has to be some relationship,.. but there are many who vehemently (as if they have skin in it not being so) claim there's no relationship.

[@user-ys5qp4bq4s]

He shows the Fed's way of thinking, i.e. keep interest rates unchanged because car insurance went up 30%, holding the print high. That means parts of the economy that are not car insurance or repair are actually facing a highe real yield.

[@Suvasley]

David Lin, a one man missionary, to expose dinosaurs.

[@ace9840]

The start of this financial crisis started in 2008 the housing collapse wasn’t the problem it was a symptom of the problem.

[@christopherdavies8839]

Last 1 minute of the conversation sums up America. Forget spending down your dept to sacrifice short term growth and payback more later on top of the limitless dept for the next generation. Brilliant. Look forward to seeing how this pans out.

[@cockyhemi-123]

Another guy that is in “the club” telling us what to expect. Thanks for being part of the problem for years pal. Any moral American who has any allegiance to the constitution would have never taken a job like that in the first place. God save this Republic, with the militia’s help of course. 🇺🇸

[@commonsense6967]

What militia?

[@okimitchell1043]

He wouldn't be saying any of this if he was still fed chair😊

[@86753091974]

He wouldnt be saying any of this is they didnt want us hearing it...​@okimitchell1043

[@user-ev9to4xx2o]

From.the.time.the.retail.stors.and.shops.started.closeing.down.that.was.the.sighn.of.the.eending.of..the.u.s.a.ecconimics.debt.desaster.in.plain.sight.that.no.recovery.ppossibly.wwhatsoever.gGood.bye.america.pie.😢😢😢

[@user-ev9to4xx2o]

Chaos.comming.in.the. u.s.a.bet.on.it.😂😂😂

[@bobiq]

He speaks like he really believes that US debt will ever be paid. It is all so sweet but I think this guy is very restrained in saying the real truth.

[@MrFonzal]

Excellent

[@hhhkf]

I wish these Federal Reserve people would tell the truth for once. The cost of everything has gone up by 200 to 300 percent since 2020.

[@helenbrooks4787]

They have to deny these facts to cover for the Democratic Party.These liberals certainly don't want any truth getting out with a major election coming up later this year. Expect them to continue trying to shove sunshine up everybody's asses until at least December.😂😂😂

[@morgankl797]

Overhere, official inflation is below 4% but our prices of cook food at hawker centre increase from $3-4 to $4-5. U r lucky to get decent food at $4, else the portions is really tiny. U r being forced to pay higher prices for decent portions.

[@_m_K_.]

I bought a brand of clothes detergent from Costco at the end of 2022/early 2023. I just bought the same item and was suprised the price was the same. When I got it home, the old container had 250oz of detergent, the new one had 200oz of fluid. 20% reduction or eg, 20% real inflation in a year on real consumer goods.

[@cassandratq9301]

He is telling the truth.

[@rajkhiani5404]

Excellent speaker would love to hear from him again

[@JacquelineSkene]

Hope you have switched to the recommended Quantum Financial System XLM and XRP?

[@cryptocatguru]

Good interview. But I guess nowadays the SEC I assume have some better prediction models

[@lorilacour7816]

He was a great guest

[@Bitcoinclips360]

Awesome experience

[@John-ou4rm]

Great discussion. Not sure I agree with data dependent rather than forward expectations given the lags in the system.

[@nationsnumber1chump]

Idc about bank failures. The whole financial system has been a failure since captain hook landed on this continent.

[@TakeOver1616]

Growth already slowing down massively!

[@Dannyshouseofcards]

But some reason we bailed out the auto industry 🤷‍♂️

[@ask_why000]

FDIC deposit insurance - to an upper limit. That should also be a line in the sand.

[@cvgguy98]

If the former KC Fed Chief believes the Fed that we are only experiencing 3% inflation, he must have someone else writing checks for his electric, insurance, internet, cable, mortgage, and grocery bills.

[@ld9044]

Have your money taken by bank failures or the devaluation by printing. This person is still a fed creature. Encouraging people to stay in a failing system.

[@Psodji]

the dollar shift price volatility to supply volatility. It is certainly a risk asset.

[@user-ow3ni2zd2x]

Keep printing

[@crazyprayingmantis5596]

Been hearing about this financial crisis for a decade now, apparently its gonna happen "soon" 😂

[@alphaomega1351]

Well, the powers that be change definitions and continue printing money 💰. They also lie about statistics. Everybody is apparently employed and making more but can't afford the basics and is heavily in debt. 😳

[@d33763]

In the Roman Empire, all serfs had a "job", but quality of living was like hell.

[@giniaa2707]

What we have is a corporate capitalistic system of banking...

[@pauldarrigo4395]

Do you think Yellen will issue more long term bonds?

[@momantube]

David, did I miss it, or did you ask the most important question ..... GOLD?

[@roybarron5777]

Looks like he’s part of the system

[@kylecollins7079]

Lol and Republic First bank just collapsed yesterday. I'm starting not to trust any banks that have the word republic or first in its name 😂

[@commonsense6967]

Alreadybeen taken over by Fulton Bank, yesterday.

[@nabzy28]

Oh, it's on already. Interest on the debt will be 1.5 trillion by next April if rates aren't cut. It's going straight up, already. Commercial real estate paper losses in the billions, just being carried over month to month to month. If the precious metals break out, just about every bank in the US will be insolvent, crushed by their leverage. Get ready.

[@ChrisWill]

Wow. His statements about “crypto banks” are very revealing.

[@JeffreyHardin-bk9ns]

To me the mortgage banking trade with underwriting any real estate would have been short 10-year treasury notes and fund loan above the rate paid on the shorted treasury notes thus creating a NIM for the bank.