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  • Frank Byrd, CFA

Record Failures of '23


“Every victory is only the price of admission to a more difficult problem”

― Henry Kissinger 


Markets hit new highs recently now that inflation appears to be under control. To Kissinger's point, does a more difficult problem await us? The following three images suggest that could be the case . . .

Bank Troubles

Last year was a record for bank failures -- surpassing even 2008. Somehow this bit of trivia has escaped the broad public's attention. Three of the four largest banks failures in history all happened in 2023. We fear the full ramifications are not behind us. Per the chart below, commercial loans (green line) continue to languish, especially in comparison to growing federal borrowing (red line):

Banks are struggling with deteriorating real estate loans on their balance sheet (especially those backing office buildings). Making matters worse, banks face increasingly onerous regulatory capital requirements, which make it more expensive to hold commercial loans on their balance sheets. No surprise, banks have been less willing to lend to businesses. This is a headwind for economic growth.  

Debt Doubles

Washington is on track to more than double its pre-COVID debt levels within the coming decade:

(These are Congressional Budget Office (CBO) forecasts, which we believe are optimistic.) 

Crowding Out

Finally, it's worth noting that the interest expense on federal debt will soon exceed defense spending according to the Congressional Budget Office (CBO).  

As interest expense consumes a growing portion of Washington's budget, important spending could get crowded out - not just defense, but ultimately critical social programs such as Medicare or Social Security.  Steve and I summarize how Fielder is positioning client portfolios given these crosscurrents in this short video:

Yours in the Field,    

Frank Byrd, CFA                 


IMPORTANT DISCLAIMER: This note is for educational purposes only. It is not a recommendation to invest in any particular security or strategy, since anything mentioned herein may be completely unsuitable for some investors. Speak with your financial adviser before investing. While the information presented herein is believed to be accurate, Fielder Capital Group LLC (Fielder) makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in this email or any attachments. Fielder is under no obligation to notify you of any errors discovered later or of any subsequent changes in opinions. Fielder’s employees are not attorneys or accountants and do not provide legal, tax, or accounting advice. Financial planning and investment strategies have the potential for loss. It should not be assumed that any of the securities, transactions, or holdings discussed will prove to be profitable in the future or that investment recommendations or decisions Fielder makes in the future will be profitable or will equal the investment performance of the securities discussed herein. Investing involves risk, including the potential of complete loss of principal amount invested. Fielder offers no guarantees or promises of success. Nothing herein should be construed as a recommendation to buy or sell any securities. Fielder or its employees may have an economic interest in securities mentioned herein.     



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