***OFFICIAL*** Bank Failure/Crisis Thread (3 Viewers)

[Sand]

Companies don't pay taxes. Those all eventually filter through to the taxpayer/consumer.

This is baloney. Like saying individuals don't pay taxes, they just withhold that money from restaurants and Amazon and grocery stores, etc., who actually pay them.

I respectfully, but completely, disagree GB.

Oh, and FAIRTAX!

 

[Dinsy Ejotuz]

WSJ News Exclusive | Signature Bank Insiders Sold $100 Million in Stock During Crypto Surge

The sales went largely unnoticed by investors due to securities rules and filing method.

www.wsj.com

Anyone with a WSJ sub willing to clip the key pieces here?

 

[Nathan R. Jessep]

WSJ News Exclusive | Signature Bank Insiders Sold $100 Million in Stock During Crypto Surge

The sales went largely unnoticed by investors due to securities rules and filing method.

www.wsj.com

Anyone with a WSJ sub willing to clip the key pieces here?

https://archive.md/qvZjg

 

[Dinsy Ejotuz]

Turns out I know someone senior at Signature.

 

[The Z Machine]

Turns out I know someone senior at Signature.

They get paid out before losses were socialized to the investors and the public writ large?

 

[Sand]

Turns out I know someone senior at Signature.

They get paid out before losses were socialized to the investors and the public writ large?

Does a bear...

 

[Poke_4_Life]

Bumping this thread as First Republic stock was down 49% yesterday.

 

[McBokonon]

Bumping this thread as First Republic stock was down 49% yesterday.

Was down an additional 30% yesterday and is down a bit premarket this morning, too. Seems like only a matter of time.

 

[Poke_4_Life]

Bumping this thread as First Republic stock was down 49% yesterday.

Was down an additional 30% yesterday and is down a bit premarket this morning, too. Seems like only a matter of time.

Regulators and the market seem to be in a stalemate. Does seem to be a matter of time. Traditionally banks are closed on Fridays, so maybe tomorrow?

 

[McBokonon]

Bumping this thread as First Republic stock was down 49% yesterday.

Was down an additional 30% yesterday and is down a bit premarket this morning, too. Seems like only a matter of time.

Regulators and the market seem to be in a stalemate. Does seem to be a matter of time. Traditionally banks are closed on Fridays, so maybe tomorrow?

Yep - happening now. (no links, just seeing from the reliable sources in my financial twitter feed.)

 

[Desert_Power]

Another one bites the dust

 

[Don't Toews Me]

Subscribe to read | Financial Times

News, analysis and comment from the Financial Times, the worldʼs leading global business publication

www.ft.com

The US government has asked JPMorgan, PNC and several other financial groups, including a handful of non-bank investment firms, to bid for all or part of First Republic, as US regulators try to determine how much it would cost taxpayers to take over the embattled California lender.

Over the past 24 hours, it has become clear to both First Republic and the government that stabilising the bank will almost certainly require the Federal Deposit Insurance Corporation to take it over, four people briefed on the situation said.

On Wednesday, the FDIC asked roughly a dozen banks to tell them what they would be willing to pay for First Republic’s deposits and assets, and what level of losses the FDIC would have to absorb to get the deal done, according to people familiar with the discussions.

On Friday, the regulator went back to JPMorgan, PNC and several other lenders and offered to give them access to more detailed information about First Republic. The potential bidders have been given digital access to a data room with extensive information on First Republic’s loans and other assets, according to two sources familiar with the process. A number of investment firms have also been given access to the data and encouraged to provide bids.

Banks and others have been told that bids are welcomed that would include First Republic being taken into receivership, and that a winning bid is likely to include some assistance from the FDIC’s insurance fund. The bidders have been given until Sunday to submit binding bids.

Guggenheim is advising the FDIC on the process, according to people familiar with the matter.

 

[Don't Toews Me]

Regulators Prepare to Seize and Sell First Republic

JPMorgan and PNC, two of the country’s largest banks, are said to be interested in acquiring the troubled lender after it is seized by the Federal Deposit Insurance Corporation.

www.nytimes.com

It’s possible that an agreement won’t be reached, in which case the F.D.I.C. would need to decide if it would seize First Republic anyway and take ownership itself. In that case, federal officials could invoke a systemic risk exception to protect those bigger deposits, something they did after the failures of Silicon Valley Bank and Signature Bank in March.

 

[Don't Toews Me]

Big banks including JPMorgan Chase, Bank of America asked for final bids on First Republic

U.S. regulators have asked banks for their best and final offers for First Republic by Sunday afternoon.

www.cnbc.com

JPMorgan Chase and PNC are likely bidders for the ailing lender, which would be seized in receivership and immediately sold to the winning bank, according to people with knowledge of the situation. The Wall Street Journal reported those banks’ interest late Friday.

Other companies are likely to step up. Bank of America is among several other institutions that are weighing a bid for First Republic, CNBC has learned according to other people with knowledge of the situation

.
The likely bidders are all represented in the group of 11 banks that banded together last month to inject $30 billion in deposits into First Republic. That move helped stem the larger deposit drain from midsized banks into top-four institutions including JPMorgan and Wells Fargo, thus giving regulators breathing room to resolve First Republic, CNBC reported last month.

But not every big bank that participated in the deposit injection will make an offer. Wells Fargo, Goldman Sachs and Citigroup are each unlikely to make a bid, according to people with knowledge of the banks.

 

[GroveDiesel]

Sold

 

[Chadstroma]

Sold

F'ng Chase

 

[Desert_Power]

Hard to argue with this take.

 

[The Z Machine]

Hard to argue with this take.

color me shocked that the big banks won't take a haircut... they always seem to avoid that.

 

[Keerock]

What I would call not good

Some halted

 

[Poke_4_Life]

Big banks have to be loving this ongoing crisis for regional banks. They will keep buying the assets at a discount and then the FDIC will charge all the remaining banks for the discount.

Win/Win/Lose.

 

[Sand]

Hard to argue with this take.

color me shocked that the big banks won't take a haircut... they always seem to avoid that.

Yet another trip to Rick's Cafe...

 

[Chadstroma]

MSN

www.msn.com

 

[Chadstroma]

Hard to argue with this take.

The Fed and the FDIC are apparently full or morons. They are making a crisis. Absolute morons.

 

[The Z Machine]

Hard to argue with this take.

The Fed and the FDIC are apparently full or morons. They are making a crisis. Absolute morons.

Eh, seems more like FDIC alone on this one...

 

[Desert_Power]

Hard to argue with this take.

The Fed and the FDIC are apparently full or morons. They are making a crisis. Absolute morons.

Eh, seems more like FDIC alone on this one...

Fed has become culpable by continuing to raise rates as the liquidity crisis spreads.

 

[Chadstroma]

Hard to argue with this take.

The Fed and the FDIC are apparently full or morons. They are making a crisis. Absolute morons.

Eh, seems more like FDIC alone on this one...

Fed has become culpable by continuing to raise rates as the liquidity crisis spreads.

Bingo

And not having the understanding that the previous hikes are working through the system still because we put too many academics in there that make decisions backward looking.

 

[Sand]

Hard to argue with this take.

The Fed and the FDIC are apparently full or morons. They are making a crisis. Absolute morons.

FDIC: "No worries - this bank insolvency thing is transient."

 

[Chadstroma]

Actually.... not fair to say FDIC... they aren't the regulatory body. They basically just clean up the messes.

This is 90% on the Fed. The absolute morons in the Fed. Waited and waited to act when it was obvious to everyone except them that inflation was a real thing. Then they have been playing catch up and seem oblivious to how the previous rate increases are still working through the system and the damage being done with their continued bumbling.

 

[Nathan R. Jessep]

MSN

www.msn.com

Good read. Right after I read this, this was the very next thing I came across:

Jamie Dimon says 'this part of the crisis is over' after JPMorgan Chase buys First Republic

JPMorgan Chase, which acquired banking assets in the 2008 financial crisis, just won an auction to gain even more size with the takeover of First Republic.

www.cnbc.com

“There are only so many banks that were offsides this way,” Dimon told analysts in a call shortly after the deal was announced.

 

[Poke_4_Life]

Actually.... not fair to say FDIC... they aren't the regulatory body. They basically just clean up the messes.

This is 90% on the Fed. The absolute morons in the Fed. Waited and waited to act when it was obvious to everyone except them that inflation was a real thing. Then they have been playing catch up and seem oblivious to how the previous rate increases are still working through the system and the damage being done with their continued bumbling.

What the heck are you talking about? The FDIC is the federal regulator for 2/3 of state-chartered banks. And are involved in supervision for all large banks like SVB, Signature, and First Republic. In fact the FDIC was the primary regulator for Signature and First Republic.

Also, you are painting with large brushes above about employees of the Fed. Please stop.

 

[Chadstroma]

Actually.... not fair to say FDIC... they aren't the regulatory body. They basically just clean up the messes.

This is 90% on the Fed. The absolute morons in the Fed. Waited and waited to act when it was obvious to everyone except them that inflation was a real thing. Then they have been playing catch up and seem oblivious to how the previous rate increases are still working through the system and the damage being done with their continued bumbling.

What the heck are you talking about? The FDIC is the federal regulator for 2/3 of state-chartered banks. And are involved in supervision for all large banks like SVB, Signature, and First Republic. In fact the FDIC was the primary regulator for Signature and First Republic.

Also, you are painting with large brushes above about employees of the Fed. Please stop.

You are right.... I was thinking Comptroller of the Currency was primary and I was wrong. So, back to the FDIC sucks. Thanks for that catch.

As for the employees of the Fed... I don't know and I don't care. I am talking about the Board of Governors who make the decisions. The board is a bunch of Academics and Politicians/Administrators. They have constantly and consistently shown the inability to do anything other than react late. They are morons. They are creating a crisis through their ineptitude.

 

[Desert_Power]

FDIC and the current Treasury have seemingly drastically expanded the backstop of deposit insurance during this evolving episode. I'm not sure if that really matters as how they assess FDIC fees has changed since Dodd Frank but I'm not sure they have thought through all the implications of this.

 

[Desert_Power]

MSN

www.msn.com

:subscribe:

 

[Nathan R. Jessep]

Annnnd Fed raises rates a quarter of a point.

 

[fruity pebbles]

Annnnd Fed raises rates a quarter of a point.

Good

 

[The Z Machine]

Annnnd Fed raises rates a quarter of a point.

Good

Honestly, I don't really have a problem with this. The FED has a mandate to combat inflation. They do not have a mandate to insure that banks are solvent.

Once the huge banks get even huger, and the small and medium banks go under, there eventually will be demand for more personal commercial banks as lots of people will be sick of dealing with Citi/Chase/BofA, right????

 

[Desert_Power]

Annnnd Fed raises rates a quarter of a point.

Good

Honestly, I don't really have a problem with this. The FED has a mandate to combat inflation. They do not have a mandate to insure that banks are solvent.

Once the huge banks get even huger, and the small and medium banks go under, there eventually will be demand for more personal commercial banks as lots of people will be sick of dealing with Citi/Chase/BofA, right????

Collapsing credit creation definitely is one way to bring prices down.

 

[Chadstroma]

Annnnd Fed raises rates a quarter of a point.

Good

Honestly, I don't really have a problem with this. The FED has a mandate to combat inflation. They do not have a mandate to insure that banks are solvent.

Once the huge banks get even huger, and the small and medium banks go under, there eventually will be demand for more personal commercial banks as lots of people will be sick of dealing with Citi/Chase/BofA, right????

To oversimplify this...

The banks with issues right now were the alternatives to Citi/Chase/BofA, etc.... doing commercial business with commercial deposits being that $250K is nothing for most of these businesses and they have to put their money somewhere. Then these banks got themselves in a little bit of a bad spot.... people get wind of it and say "Well, not MY $1 million, I am taking it out and sending it to a TOO BIG TO FAIL bank so it is safe." a million here and a million there and soon you are talking about real money.... and then those deposits go to the Citi/Chase/BoFA, etc. Then, these banks fail, because any and every bank that losses a significant amount of their deposits in a short period of time will fail INCLUDING Citi/Chase/BofA, etc. So then they take these banks over and to try to cover losses basically hand these assets over to these large banks at very advantageous agreements to the Citi/Chase/BofA, etc banks. And they grow bigger. They continue to not have to try to work for the deposits because people feel their money is safe with them because the government would never let one of these too big to fail banks go out of business. Meanwhile, the Fed continues to put pressure on these banks with the raising of rates while all the previous rates have not yet gone through the system because they don't know how to do anything other than react late and then over react when they do act which will further create more pressure on more of these smaller banks that aren't too big to fail to fail and will fail if people hear that their bank is next and do a good ole' fashioned bank run to get their money out.

 

[Desert_Power]

Another one?

 

[Sand]

Another one?

A slow motion 80 car pileup in progress.

 

[rockaction]

This is awful. I will leave the analysis to you all.

 

[Nathan R. Jessep]

Meanwhile, the Fed continues to put pressure on these banks with the raising of rates while all the previous rates have not yet gone through the system because they don't know how to do anything other than react late and then over react when they do act

I recall reading about this a while back but now can't remember.... What is the normal time frame for interest rates to shake their way down through the system?

 

[The Z Machine]

Annnnd Fed raises rates a quarter of a point.

Good

Honestly, I don't really have a problem with this. The FED has a mandate to combat inflation. They do not have a mandate to insure that banks are solvent.

Once the huge banks get even huger, and the small and medium banks go under, there eventually will be demand for more personal commercial banks as lots of people will be sick of dealing with Citi/Chase/BofA, right????

Collapsing credit creation definitely is one way to bring prices down.

I think they know this and may be counting on it.

 

[Chadstroma]

Meanwhile, the Fed continues to put pressure on these banks with the raising of rates while all the previous rates have not yet gone through the system because they don't know how to do anything other than react late and then over react when they do act

I recall reading about this a while back but now can't remember.... What is the normal time frame for interest rates to shake their way down through the system?

I don't think there is an X time answer to that. If there was then it should be pretty easy to say "Ok, we increase to X and then wait until Y and then we are good." as disparaging as I am to the Fed right now because they just continue to make obvious errors causing problems with the two big ones being not reacting to inflation earlier and then once they realized they were wrong over reacting with their continued increases despite the damage is may cause. The answer is prob somewhere between 6-18 months to fully feel all the impacts of a rate increase.

 

[Chadstroma]

Annnnd Fed raises rates a quarter of a point.

Good

Honestly, I don't really have a problem with this. The FED has a mandate to combat inflation. They do not have a mandate to insure that banks are solvent.

Once the huge banks get even huger, and the small and medium banks go under, there eventually will be demand for more personal commercial banks as lots of people will be sick of dealing with Citi/Chase/BofA, right????

Collapsing credit creation definitely is one way to bring prices down.

I think they know this and may be counting on it.

Do you remember that whole 2008 thing? That is a credit collapse.

 

[The Z Machine]

Annnnd Fed raises rates a quarter of a point.

Good

Honestly, I don't really have a problem with this. The FED has a mandate to combat inflation. They do not have a mandate to insure that banks are solvent.

Once the huge banks get even huger, and the small and medium banks go under, there eventually will be demand for more personal commercial banks as lots of people will be sick of dealing with Citi/Chase/BofA, right????

Collapsing credit creation definitely is one way to bring prices down.

I think they know this and may be counting on it.

Do you remember that whole 2008 thing? That is a credit collapse.

I do remember those times but honestly I was insulated. I didn't have a mortgage. My wife was in grad school and I had a steady job. We didn't have a lot of expenses. Heck, I'm pretty sure we didn't even own a car.

 

[The Z Machine]

I do remember a lot of irrational exuberance about buying houses. Some of my friends jumped in and were under water for years. Some of my friends lost jobs in the mortgage industry. I also remember the unwinding of a lot of bad debt created by not so good borrowers too.

 

[Chadstroma]

I do remember a lot of irrational exuberance about buying houses. Some of my friends jumped in and were under water for years. Some of my friends lost jobs in the mortgage industry. I also remember the unwinding of a lot of bad debt created by not so good borrowers too.

Yea, not an exact correlation but that was a credit crunch where you had a lot of bank failures and banks not wanting to lend money. It isn't a good and fun time of 'serves them right' but pain that everyone feels.

 

[Sand]

Interesting data point - if this was a "normal" purchase it would never pass regulator scrutiny as JPM already has too much US deposits. It would be automatically rejected.

 

[Desert_Power]

Meanwhile, the Fed continues to put pressure on these banks with the raising of rates while all the previous rates have not yet gone through the system because they don't know how to do anything other than react late and then over react when they do act

I recall reading about this a while back but now can't remember.... What is the normal time frame for interest rates to shake their way down through the system?

Good write up from ATL Fed here. My take has been that the lags are actually going to be longer than we experienced historically as 90+% of mortgages in the US are now fixed. That was not the case during the 07-08 housing crash where resetting ARMs were a more direct transmission mechanism of higher rates to household pain.