Today’s unemployment insurance (UI) data and the junk bond market sell-off are very negative macroeconomic and market signals that will adversely affect banks. Banks are lenders both to individuals and corporations, and they also invest in corporate bonds as well as in bonds called asset backed securities, which are pools of assets such as residential and commercial mortgages, credit card debt, and student loans. As individuals and corporations default on loans and bonds, banks’ profitability and capital levels will decrease substantially.