John Rubino is a former Wall Street financial analyst and author or co-author of five books, including The Money Bubble: What to Do Before It Pops and Clean Money: Picking Winners in the Green-Tech Boom. He founded the popular financial website DollarCollapse.com in 2004, sold it in 2022, and now publishes John Rubino’s Substack newsletter.
Once again, the regional banks are in trouble. This time, the crisis began with several commercial/industrial loan defaults and is progressing into yet another multi-billion-dollar bailout via the repo market. Here’s a concise X post with the details:
While Everyone’s Distracted… Most people have no idea what just happened.
On October 16th, 2025, the Federal Reserve Bank of New York quietly injected $8.35 BILLION into the financial system through something called a Repo Operation, and that’s just what they admitted publicly. Nearly 80% of that was backed by mortgage-backed securities, not Treasuries.
Translation: the banks are running out of cash, and they’re now pawning off their riskiest assets just to get short-term liquidity.
Let me break it down: The Repo Market is basically a virtual pawn shop for banks. They bring their “valuables” government bonds or mortgage-backed securities and the Fed gives them a quick cash loan overnight. The next day, they “repurchase” their collateral. That’s why it’s called a repurchase (repo) agreement. Now here’s the problem
When banks start pawning mortgage-backed securities instead of safe Treasuries, it means they’re desperate for cash. It’s like someone pawning their TV, their car, and then finally their wedding ring. And the Fed knows it. That’s why they quietly announced a $491.65 BILLION Standing Repo Facility for later that same day — nearly half a trillion dollars in emergency overnight liquidity. They don’t prep half a trillion unless something behind the curtain is breaking. Meanwhile, what’s trending right now?
Protests.
Political drama.
Manufactured headlines designed to divide and distract.
While the world argues, the monetary system is quietly unraveling in real time. This isn’t a conspiracy. It’s public data straight from the Fed’s own website. We’ve passed the point of no return. You can’t print your way out of a debt-based system forever. You can’t keep pretending it’s fine when the repo window is catching fire again.
Accident Waiting to Happen
Regional banks own a lot of commercial and residential real estate loans, and — with office buildings and car mortgages leading the way — much of that paper is going bad.
When one borrower defaults, everyone starts wondering who’s next. And they find plenty of likely suspects, which triggers an exodus of capital from the riskiest banks, in turn leading to a government bailout.
This shifts the pressure from banks to the currency, sending capital out of financial assets and into real things. Hence, the gold bull market.
And this is just the start. Keep stacking.
STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio
delivered to your inbox for FREE! Sign up here for the HoweStreet.com Weekly Recap.
