***OFFICIAL*** Bank Failure/Crisis Thread (1 Viewer)

[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.

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

I do not think you can have financial instability for long without it negatively impacting the two statutory mandates the Fed has. Let the current banking crisis go too far and we do not know where it will lead.

Powell seems to think (or at least says) that this is a limited thing to a few problem institutions. I think they are not fully appreciating what these hikes have done to worsen the liquidity issues and heighten risks to more firms. I would like to be wrong.

 

[Chadstroma]

One thing that should be a good indicator of inflation being under control (data will follow) is that for the first time since like Roman Times (ok, that might be a bit of an exaggeration) the M2 money supply has contracted.

My prediction? Data will continue a slight downward trend keeping the Fed steady as they indicated today for the next couple of meets and then all hell will break loose and they will swing back to the other side with 50bps maybe even 75bps cuts on the back end.

 

[Alex P Keaton]

Another one?

PacWest has been on the short list since SVB started to wobble.

 

[[icon]]

Schwab and Truist

 

[KGB]

Another one?

PacWest has been on the short list since SVB started to wobble.

short?

 

[Alex P Keaton]

Another one?

PacWest has been on the short list since SVB started to wobble.

short?

The short list of banks likely to collapse. (Which may or may not overlap with a list of banks whose stocks investors are shorting)

 

[KGB]

Another one?

PacWest has been on the short list since SVB started to wobble.

short?

The short list of banks likely to collapse. (Which may or may not overlap with a list of banks whose stocks investors are shorting)

I mean, do you think we should short it?

 

[Alex P Keaton]

Another one?

PacWest has been on the short list since SVB started to wobble.

short?

The short list of banks likely to collapse. (Which may or may not overlap with a list of banks whose stocks investors are shorting)

I mean, do you think we should short it?

No idea. My focus was on getting my firm’s portfolio companies to ensure they didn’t have money exposed to PacWest (or Signature Bank) when SVB happened. Those were the 3 most under the microscope at the time.

 

[culdeus]

Schwab and Truist

Schwab isn't really a bank. They farm a lot of their normal banking tx to jpm

 

[Snotbubbles]

I just wrote some case summaries on SVB and First Republic due to some lawsuits filed in Federal Courts.

From the Complaints, looks like the banks weren't well positioned for increasing interest rates, were holding some risky investments and then when customers started pulling their deposits things really went south.

 

[matttyl]

Schwab and Truist

What about them?

 

[Todem]

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.

It has snowballed into a complete lack of “confidence” issue…..and the short sellers are gaslighting this even further now.

It’s a bad situation.

 

[Chadstroma]

Another one?

PacWest has been on the short list since SVB started to wobble.

short?

The short list of banks likely to collapse. (Which may or may not overlap with a list of banks whose stocks investors are shorting)

I mean, do you think we should short it?

What happens to a short position if a stock is wiped out?

 

[Chadstroma]

I just wrote some case summaries on SVB and First Republic due to some lawsuits filed in Federal Courts.

From the Complaints, looks like the banks weren't well positioned for increasing interest rates, were holding some risky investments and then when customers started pulling their deposits things really went south.

That is the thing.... every single bank that loses it's deposits is in trouble. It does not matter what caused it or if the lack of confidence is founded or not. A bank run will kill every single bank there is no matter what they do. If confidence is lost in the bank. They are done.

This happened in 2008. There were obvious issues in the financial industry rooted in RE. Some small bank failures, Bear Stearns but then enter the bumbling idiot Chuck Schumer who decided it was a good idea (maybe politically good but in every other way even a chimp would see it was a bad move) sent out an open letter that essentially lead to the failure of IndyMac. We were off to the races at that point. There was widespread reporting showing long lines of people outside IndyMac branches trying to get money.... debit cards not working.... checks not clearing.... and then you have the media asking "WHO IS NEXT?!" Well... IndyMac is a big Option ARM lender.... who else does those? WaMu and World Savings did! World Savings was bought by Wachovia a couple of years earlier so all the focus went on WaMu. A few months later and then within 10 days losing $16 billion in deposits.... WaMu failed. Largest bank failure in history. The wheels really came off and we all lived it.

The moral of the story? All of this is a snowball gaining momentum and the powers that be are pushing that snowball downhill rather than stopping it.

SVB, First Republic, PacWest and Signature were the banks that were on the super worried list to start this. Three are gone and PacWest is the next to get a bank run. The big question will be does it stop there or does the media start asking about other banks... and then have confidence erode. The banking system lives or dies not on positions and investments.... it lives and dies on confidence. Confidence is eroding.

 

[Snotbubbles]

I just wrote some case summaries on SVB and First Republic due to some lawsuits filed in Federal Courts.

From the Complaints, looks like the banks weren't well positioned for increasing interest rates, were holding some risky investments and then when customers started pulling their deposits things really went south.

That is the thing.... every single bank that loses it's deposits is in trouble. It does not matter what caused it or if the lack of confidence is founded or not. A bank run will kill every single bank there is no matter what they do. If confidence is lost in the bank. They are done.

This happened in 2008. There were obvious issues in the financial industry rooted in RE. Some small bank failures, Bear Stearns but then enter the bumbling idiot Chuck Schumer who decided it was a good idea (maybe politically good but in every other way even a chimp would see it was a bad move) sent out an open letter that essentially lead to the failure of IndyMac. We were off to the races at that point. There was widespread reporting showing long lines of people outside IndyMac branches trying to get money.... debit cards not working.... checks not clearing.... and then you have the media asking "WHO IS NEXT?!" Well... IndyMac is a big Option ARM lender.... who else does those? WaMu and World Savings did! World Savings was bought by Wachovia a couple of years earlier so all the focus went on WaMu. A few months later and then within 10 days losing $16 billion in deposits.... WaMu failed. Largest bank failure in history. The wheels really came off and we all lived it.

The moral of the story? All of this is a snowball gaining momentum and the powers that be are pushing that snowball downhill rather than stopping it.

SVB, First Republic, PacWest and Signature were the banks that were on the super worried list to start this. Three are gone and PacWest is the next to get a bank run. The big question will be does it stop there or does the media start asking about other banks... and then have confidence erode. The banking system lives or dies not on positions and investments.... it lives and dies on confidence. Confidence is eroding.

My firm did a lot of work on the 2008 financial crisis. There was a lot of shady crap going on with mortgage backed securities. They were wrapping these crappy mortgages with high rated insurance to give the appearance that the mortgages were good investments. Goldman Sachs, the vampire squid, even had a guy shorting the mortgage backed securities that he hand-picked to sell to their own investors.

SVB had a lot of venture capitalist clients so they were risky to begin with. Signature Bank got too involved in the crypto space and got tanked by FTX. First Republic is a real scary one because they catered to a lot of high net worth clients. They tanked almost solely on rising rates and loss of customer deposits. Credit Suisse was collapsing for awhile they were bleeding customer deposits for years.

 

[Poke_4_Life]

I read something today that I found interesting. "Banks are having their Gamestop moment in social media."

I think social media is exacerbating the problems in the regionals. There are also some fundamental weaknesses in the banks that have collapsed to this point. Any bank that relies heavily on 'hot money' should have ways to mitigate that risk or have increased capital buffers to survive stress events.

We'll see over the next few days how this plays out, but if I was a regional banker, I'd be keeping a close eye on the socials and have all my funding contingencies ready to go at a moments notice.

 

[Desert_Power]

I just wrote some case summaries on SVB and First Republic due to some lawsuits filed in Federal Courts.

From the Complaints, looks like the banks weren't well positioned for increasing interest rates, were holding some risky investments and then when customers started pulling their deposits things really went south.

That is the thing.... every single bank that loses it's deposits is in trouble. It does not matter what caused it or if the lack of confidence is founded or not. A bank run will kill every single bank there is no matter what they do. If confidence is lost in the bank. They are done.

This happened in 2008. There were obvious issues in the financial industry rooted in RE. Some small bank failures, Bear Stearns but then enter the bumbling idiot Chuck Schumer who decided it was a good idea (maybe politically good but in every other way even a chimp would see it was a bad move) sent out an open letter that essentially lead to the failure of IndyMac. We were off to the races at that point. There was widespread reporting showing long lines of people outside IndyMac branches trying to get money.... debit cards not working.... checks not clearing.... and then you have the media asking "WHO IS NEXT?!" Well... IndyMac is a big Option ARM lender.... who else does those? WaMu and World Savings did! World Savings was bought by Wachovia a couple of years earlier so all the focus went on WaMu. A few months later and then within 10 days losing $16 billion in deposits.... WaMu failed. Largest bank failure in history. The wheels really came off and we all lived it.

The moral of the story? All of this is a snowball gaining momentum and the powers that be are pushing that snowball downhill rather than stopping it.

SVB, First Republic, PacWest and Signature were the banks that were on the super worried list to start this. Three are gone and PacWest is the next to get a bank run. The big question will be does it stop there or does the media start asking about other banks... and then have confidence erode. The banking system lives or dies not on positions and investments.... it lives and dies on confidence. Confidence is eroding.

My firm did a lot of work on the 2008 financial crisis. There was a lot of shady crap going on with mortgage backed securities. They were wrapping these crappy mortgages with high rated insurance to give the appearance that the mortgages were good investments. Goldman Sachs, the vampire squid, even had a guy shorting the mortgage backed securities that he hand-picked to sell to their own investors.

SVB had a lot of venture capitalist clients so they were risky to begin with. Signature Bank got too involved in the crypto space and got tanked by FTX. First Republic is a real scary one because they catered to a lot of high net worth clients. They tanked almost solely on rising rates and loss of customer deposits. Credit Suisse was collapsing for awhile they were bleeding customer deposits for years.

I don't think anyone is arguing that there wasn't a lot of fraud and outright bad bets in 08 or that the firms that have failed thus far weren't risky in certain ways. There are always specific reasons an individual firm fails.

There are also systemic and psychological issues at play here. A 4%-5% shock to interest rates is a problem for the entire industry. If SVB was better hedged for rate rises, some other firm would be less hedged. Draining liquidity at this scale and continuing to raise rates (which also reduces liquidity) is a game of musical chairs. The market is going to keep guessing which firm is furthest away from the chairs until policymakers change course or Jamie Dimon owns us all.

 

[Juxtatarot]

I just wrote some case summaries on SVB and First Republic due to some lawsuits filed in Federal Courts.

From the Complaints, looks like the banks weren't well positioned for increasing interest rates, were holding some risky investments and then when customers started pulling their deposits things really went south.

That is the thing.... every single bank that loses it's deposits is in trouble. It does not matter what caused it or if the lack of confidence is founded or not. A bank run will kill every single bank there is no matter what they do. If confidence is lost in the bank. They are done.

This happened in 2008. There were obvious issues in the financial industry rooted in RE. Some small bank failures, Bear Stearns but then enter the bumbling idiot Chuck Schumer who decided it was a good idea (maybe politically good but in every other way even a chimp would see it was a bad move) sent out an open letter that essentially lead to the failure of IndyMac. We were off to the races at that point. There was widespread reporting showing long lines of people outside IndyMac branches trying to get money.... debit cards not working.... checks not clearing.... and then you have the media asking "WHO IS NEXT?!" Well... IndyMac is a big Option ARM lender.... who else does those? WaMu and World Savings did! World Savings was bought by Wachovia a couple of years earlier so all the focus went on WaMu. A few months later and then within 10 days losing $16 billion in deposits.... WaMu failed. Largest bank failure in history. The wheels really came off and we all lived it.

The moral of the story? All of this is a snowball gaining momentum and the powers that be are pushing that snowball downhill rather than stopping it.

SVB, First Republic, PacWest and Signature were the banks that were on the super worried list to start this. Three are gone and PacWest is the next to get a bank run. The big question will be does it stop there or does the media start asking about other banks... and then have confidence erode. The banking system lives or dies not on positions and investments.... it lives and dies on confidence. Confidence is eroding.

My firm did a lot of work on the 2008 financial crisis. There was a lot of shady crap going on with mortgage backed securities. They were wrapping these crappy mortgages with high rated insurance to give the appearance that the mortgages were good investments. Goldman Sachs, the vampire squid, even had a guy shorting the mortgage backed securities that he hand-picked to sell to their own investors.

SVB had a lot of venture capitalist clients so they were risky to begin with. Signature Bank got too involved in the crypto space and got tanked by FTX. First Republic is a real scary one because they catered to a lot of high net worth clients. They tanked almost solely on rising rates and loss of customer deposits. Credit Suisse was collapsing for awhile they were bleeding customer deposits for years.

I don't think anyone is arguing that there wasn't a lot of fraud and outright bad bets in 08 or that the firms that have failed thus far weren't risky in certain ways. There are always specific reasons an individual firm fails.

There are also systemic and psychological issues at play here. A 4%-5% shock to interest rates is a problem for the entire industry. If SVB was better hedged for rate rises, some other firm would be less hedged. Draining liquidity at this scale and continuing to raise rates (which also reduces liquidity) is a game of musical chairs. The market is going to keep guessing which firm is furthest away from the chairs until policymakers change course or Jamie Dimon owns us all.

For me it boils down to fighting inflation. I don’t want the Fed to deviate from their inflation fighting position (harming everyone) to try to indirectly save some poorly managed banks.

 

[Poke_4_Life]

For me it boils down to fighting inflation. I don’t want the Fed to deviate from their inflation fighting position (harming everyone) to try to indirectly save some poorly managed banks.

Well luckily, helping banks is nowhere in the Fed mandate. Keeping inflation near 2% while maximizing employment is the dual mandate.

 

[Desert_Power]

I just wrote some case summaries on SVB and First Republic due to some lawsuits filed in Federal Courts.

From the Complaints, looks like the banks weren't well positioned for increasing interest rates, were holding some risky investments and then when customers started pulling their deposits things really went south.

That is the thing.... every single bank that loses it's deposits is in trouble. It does not matter what caused it or if the lack of confidence is founded or not. A bank run will kill every single bank there is no matter what they do. If confidence is lost in the bank. They are done.

This happened in 2008. There were obvious issues in the financial industry rooted in RE. Some small bank failures, Bear Stearns but then enter the bumbling idiot Chuck Schumer who decided it was a good idea (maybe politically good but in every other way even a chimp would see it was a bad move) sent out an open letter that essentially lead to the failure of IndyMac. We were off to the races at that point. There was widespread reporting showing long lines of people outside IndyMac branches trying to get money.... debit cards not working.... checks not clearing.... and then you have the media asking "WHO IS NEXT?!" Well... IndyMac is a big Option ARM lender.... who else does those? WaMu and World Savings did! World Savings was bought by Wachovia a couple of years earlier so all the focus went on WaMu. A few months later and then within 10 days losing $16 billion in deposits.... WaMu failed. Largest bank failure in history. The wheels really came off and we all lived it.

The moral of the story? All of this is a snowball gaining momentum and the powers that be are pushing that snowball downhill rather than stopping it.

SVB, First Republic, PacWest and Signature were the banks that were on the super worried list to start this. Three are gone and PacWest is the next to get a bank run. The big question will be does it stop there or does the media start asking about other banks... and then have confidence erode. The banking system lives or dies not on positions and investments.... it lives and dies on confidence. Confidence is eroding.

My firm did a lot of work on the 2008 financial crisis. There was a lot of shady crap going on with mortgage backed securities. They were wrapping these crappy mortgages with high rated insurance to give the appearance that the mortgages were good investments. Goldman Sachs, the vampire squid, even had a guy shorting the mortgage backed securities that he hand-picked to sell to their own investors.

SVB had a lot of venture capitalist clients so they were risky to begin with. Signature Bank got too involved in the crypto space and got tanked by FTX. First Republic is a real scary one because they catered to a lot of high net worth clients. They tanked almost solely on rising rates and loss of customer deposits. Credit Suisse was collapsing for awhile they were bleeding customer deposits for years.

I don't think anyone is arguing that there wasn't a lot of fraud and outright bad bets in 08 or that the firms that have failed thus far weren't risky in certain ways. There are always specific reasons an individual firm fails.

There are also systemic and psychological issues at play here. A 4%-5% shock to interest rates is a problem for the entire industry. If SVB was better hedged for rate rises, some other firm would be less hedged. Draining liquidity at this scale and continuing to raise rates (which also reduces liquidity) is a game of musical chairs. The market is going to keep guessing which firm is furthest away from the chairs until policymakers change course or Jamie Dimon owns us all.

For me it boils down to fighting inflation. I don’t want the Fed to deviate from their inflation fighting position (harming everyone) to try to indirectly save some poorly managed banks.

I guess it is good news that many parts of the bond and commodities markets are now priced as if they are expecting deflation.

Point is that it isn't just poorly managed banks, it will be more and more as time goes on. The system as a whole cannot manage this liquidity/rate shock.

 

[Desert_Power]

Another one?

Another one.

I find it highly unlikely anyone will buy these assets before they are put in receivership by the FDIC. Why pay more than you will when the government comes and shares the loss? Would expect both of these firms to be taken over by the government in the coming days, probably today or tomorrow.

 

[Snotbubbles]

Another one?

Another one.

I find it highly unlikely anyone will buy these assets before they are put in receivership by the FDIC. Why pay more than you will when the government comes and shares the loss? Would expect both of these firms to be taken over by the government in the coming days, probably today or tomorrow.

I expect to be writing future case summaries for these banks.

 

[Desert_Power]

Another one?

Another one.

I find it highly unlikely anyone will buy these assets before they are put in receivership by the FDIC. Why pay more than you will when the government comes and shares the loss? Would expect both of these firms to be taken over by the government in the coming days, probably today or tomorrow.

I expect to be writing future case summaries for these banks.

Wouldn't bet against that one

 

[Chadstroma]

For me it boils down to fighting inflation. I don’t want the Fed to deviate from their inflation fighting position (harming everyone) to try to indirectly save some poorly managed banks.

Well luckily, helping banks is nowhere in the Fed mandate. Keeping inflation near 2% while maximizing employment is the dual mandate.

When credit seizes up... it is one hell of a way to bring inflation down. Yea for them!

 

[Chadstroma]

I just wrote some case summaries on SVB and First Republic due to some lawsuits filed in Federal Courts.

From the Complaints, looks like the banks weren't well positioned for increasing interest rates, were holding some risky investments and then when customers started pulling their deposits things really went south.

That is the thing.... every single bank that loses it's deposits is in trouble. It does not matter what caused it or if the lack of confidence is founded or not. A bank run will kill every single bank there is no matter what they do. If confidence is lost in the bank. They are done.

This happened in 2008. There were obvious issues in the financial industry rooted in RE. Some small bank failures, Bear Stearns but then enter the bumbling idiot Chuck Schumer who decided it was a good idea (maybe politically good but in every other way even a chimp would see it was a bad move) sent out an open letter that essentially lead to the failure of IndyMac. We were off to the races at that point. There was widespread reporting showing long lines of people outside IndyMac branches trying to get money.... debit cards not working.... checks not clearing.... and then you have the media asking "WHO IS NEXT?!" Well... IndyMac is a big Option ARM lender.... who else does those? WaMu and World Savings did! World Savings was bought by Wachovia a couple of years earlier so all the focus went on WaMu. A few months later and then within 10 days losing $16 billion in deposits.... WaMu failed. Largest bank failure in history. The wheels really came off and we all lived it.

The moral of the story? All of this is a snowball gaining momentum and the powers that be are pushing that snowball downhill rather than stopping it.

SVB, First Republic, PacWest and Signature were the banks that were on the super worried list to start this. Three are gone and PacWest is the next to get a bank run. The big question will be does it stop there or does the media start asking about other banks... and then have confidence erode. The banking system lives or dies not on positions and investments.... it lives and dies on confidence. Confidence is eroding.

My firm did a lot of work on the 2008 financial crisis. There was a lot of shady crap going on with mortgage backed securities. They were wrapping these crappy mortgages with high rated insurance to give the appearance that the mortgages were good investments. Goldman Sachs, the vampire squid, even had a guy shorting the mortgage backed securities that he hand-picked to sell to their own investors.

SVB had a lot of venture capitalist clients so they were risky to begin with. Signature Bank got too involved in the crypto space and got tanked by FTX. First Republic is a real scary one because they catered to a lot of high net worth clients. They tanked almost solely on rising rates and loss of customer deposits. Credit Suisse was collapsing for awhile they were bleeding customer deposits for years.

Oh yea... tons of shady crap. Tons of people should be in jail to this day. No doubt in my mind that Chase was behind WaMu failure and worse yet the government KNOWS about it.

 

[LawFitz]

The next shoe (or at least a future shoe of reckoning) will be commercial real estate. A wicked storm is brewing there on three fronts:

- Extreme, unforeseen and durable vacancy rates due to remote work;
- >100% increase in mortgage rate levels (it's relative, not absolute rise that matters);
- A coming tsunami of maturities (mostly fixed rate expiries) in 2025;
- Gigantic exposures to the above by the banking system.

 

[Chadstroma]

The next shoe (or at least a future shoe of reckoning) will be commercial real estate. A wicked storm is brewing there on three fronts:

- Extreme, unforeseen and durable vacancy rates due to remote work;
- >100% increase in mortgage rate levels (it's relative, not absolute rise that matters);
- A coming tsunami of maturities (mostly fixed rate expiries) in 2025;
- Gigantic exposures to the above by the banking system.

There is a reason why the big banks are pushing for people to go back to the offices.

 

[humpback]

For me it boils down to fighting inflation. I don’t want the Fed to deviate from their inflation fighting position (harming everyone) to try to indirectly save some poorly managed banks.

Well luckily, helping banks is nowhere in the Fed mandate. Keeping inflation near 2% while maximizing employment is the dual mandate.

When credit seizes up... it is one hell of a way to bring inflation down. Yea for them!

Everyone knows that the Fed tightening is going to slow things down, that's exactly why they're doing it. The problem is these 4 (for now) banks didn't heed the very clear warnings that it was coming so they kept investing like rates were never going to rise (obviously a major oversimplification).

I'm not sure what people want the Fed to do. Should they cave because a few of our way too many ~4000 banks mismanaged their portfolios? I get it, there's going to be pain and it sucks, but that was inevitable- when you take away the heroin there are going to be withdrawals.

 

[fruity pebbles]

For me it boils down to fighting inflation. I don’t want the Fed to deviate from their inflation fighting position (harming everyone) to try to indirectly save some poorly managed banks.

Well luckily, helping banks is nowhere in the Fed mandate. Keeping inflation near 2% while maximizing employment is the dual mandate.

When credit seizes up... it is one hell of a way to bring inflation down. Yea for them!

Everyone knows that the Fed tightening is going to slow things down, that's exactly why they're doing it. The problem is these 4 (for now) banks didn't heed the very clear warnings that it was coming so they kept investing like rates were never going to rise (obviously a major oversimplification).

I'm not sure what people want the Fed to do. Should they cave because a few of our way too many ~4000 banks mismanaged their portfolios? I get it, there's going to be pain and it sucks, but that was inevitable- when you take away the heroin there are going to be withdrawals.

I mean at the beginning of this tightening phase, Powell flat out said this was going to be painful. We’ve had quantitative easing for over a decade.

 

[BassNBrew]

@Desert_Power Any risk with a bank like First Citizens? My business assets all well over the $250k threshold.

 

[Sand]

Another one?

PacWest has been on the short list since SVB started to wobble.

short?

The short list of banks likely to collapse. (Which may or may not overlap with a list of banks whose stocks investors are shorting)

I mean, do you think we should short it?

What happens to a short position if a stock is wiped out?

Easy - the brokerage lets you buy back the shares at zero. So, 100% profit.

The more interesting question is what happens if you bought a put and didn't get out before trading halted. You could easily get wiped out there. In the case of come of these banks they have opened back up on the OTC board and folks have been able to unwind these positions (for a nice profit). But, if it goes straight to zero and never reopens you're hosed.

 

[Chadstroma]

For me it boils down to fighting inflation. I don’t want the Fed to deviate from their inflation fighting position (harming everyone) to try to indirectly save some poorly managed banks.

Well luckily, helping banks is nowhere in the Fed mandate. Keeping inflation near 2% while maximizing employment is the dual mandate.

When credit seizes up... it is one hell of a way to bring inflation down. Yea for them!

Everyone knows that the Fed tightening is going to slow things down, that's exactly why they're doing it. The problem is these 4 (for now) banks didn't heed the very clear warnings that it was coming so they kept investing like rates were never going to rise (obviously a major oversimplification).

I'm not sure what people want the Fed to do. Should they cave because a few of our way too many ~4000 banks mismanaged their portfolios? I get it, there's going to be pain and it sucks, but that was inevitable- when you take away the heroin there are going to be withdrawals.

What could go wrong?

 

[humpback]

I mean at the beginning of this tightening phase, Powell flat out said this was going to be painful. We’ve had quantitative easing for over a decade.

Yep, and this tightening phase has been broadcast loud and clear well in advance. Heck, it would have happened a few years ago if not for covid.

What could go wrong?

Compelling answer.

 

[Todem]

Another one?

PacWest has been on the short list since SVB started to wobble.

short?

The short list of banks likely to collapse. (Which may or may not overlap with a list of banks whose stocks investors are shorting)

I mean, do you think we should short it?

What happens to a short position if a stock is wiped out?

100% profit. That is the ultimate outcome for a short seller.

 

[Desert_Power]

@Desert_Power Any risk with a bank like First Citizens? My business assets all well over the $250k threshold.

I would assume they are relatively stable since they were able to win the auction for SVB’s assets. I also think the FDIC will likely make more explicit a full deposit guarantee soon. Still, if there is only one account owner, may make sense to diversify to be extremely safe.

 

[Chadstroma]

@Desert_Power Any risk with a bank like First Citizens? My business assets all well over the $250k threshold.

I would assume they are relatively stable since they were able to win the auction for SVB’s assets. I also think the FDIC will likely make more explicit a full deposit guarantee soon. Still, if there is only one account owner, may make sense to diversify to be extremely safe.

Commercial accounts only have the one owner (the business entity) so you can't increase FDIC coverage like you can with personal accounts in having multiple ownership/beneficiaries etc. Thus the issues SVB, First Repub, etc have had with large commercial deposits fleeing when they hear their money is at risk and thus becoming a self fulfilling prophecy.

 

[BassNBrew]

@Desert_Power Any risk with a bank like First Citizens? My business assets all well over the $250k threshold.

I would assume they are relatively stable since they were able to win the auction for SVB’s assets. I also think the FDIC will likely make more explicit a full deposit guarantee soon. Still, if there is only one account owner, may make sense to diversify to be extremely safe.

Commercial accounts only have the one owner (the business entity) so you can't increase FDIC coverage like you can with personal accounts in having multiple ownership/beneficiaries etc. Thus the issues SVB, First Repub, etc have had with large commercial deposits fleeing when they hear their money is at risk and thus becoming a self fulfilling prophecy.

Any idea on Trust accounts where I'm holding various different people's monies such as security deposits under my name in one account. I've asked people at the bank and just get a shrug.

 

[culdeus]

@Desert_Power Any risk with a bank like First Citizens? My business assets all well over the $250k threshold.

I would assume they are relatively stable since they were able to win the auction for SVB’s assets. I also think the FDIC will likely make more explicit a full deposit guarantee soon. Still, if there is only one account owner, may make sense to diversify to be extremely safe.

Commercial accounts only have the one owner (the business entity) so you can't increase FDIC coverage like you can with personal accounts in having multiple ownership/beneficiaries etc. Thus the issues SVB, First Repub, etc have had with large commercial deposits fleeing when they hear their money is at risk and thus becoming a self fulfilling prophecy.

Any idea on Trust accounts where I'm holding various different people's monies such as security deposits under my name in one account. I've asked people at the bank and just get a shrug.

I heard on the radio that there is worry that people that are putting escrow up for house sales, property taxes, and all sorts of things could get ****ed. No idea if this is just FUD or what.

 

[Desert_Power]

@Desert_Power Any risk with a bank like First Citizens? My business assets all well over the $250k threshold.

I would assume they are relatively stable since they were able to win the auction for SVB’s assets. I also think the FDIC will likely make more explicit a full deposit guarantee soon. Still, if there is only one account owner, may make sense to diversify to be extremely safe.

Commercial accounts only have the one owner (the business entity) so you can't increase FDIC coverage like you can with personal accounts in having multiple ownership/beneficiaries etc. Thus the issues SVB, First Repub, etc have had with large commercial deposits fleeing when they hear their money is at risk and thus becoming a self fulfilling prophecy.

Any idea on Trust accounts where I'm holding various different people's monies such as security deposits under my name in one account. I've asked people at the bank and just get a shrug.

Look at your account statement. If there is only one name on there, you are likely to only have 250k in coverage unless you are enrolled in an FDIC sweep product. Seems like Truist should have at least 2 bank charters from the merger to sweep between. If you're really worried, you can avail yourself of one of these good bonuses.

 

[Desert_Power]

The next shoe (or at least a future shoe of reckoning) will be commercial real estate. A wicked storm is brewing there on three fronts:

- Extreme, unforeseen and durable vacancy rates due to remote work;
- >100% increase in mortgage rate levels (it's relative, not absolute rise that matters);
- A coming tsunami of maturities (mostly fixed rate expiries) in 2025;
- Gigantic exposures to the above by the banking system.

Yeah. My understanding is a lot of these CRE rolls will actually be due in late 23 and into 24. I think (as does the market) that the Fed will cut rates by then. This dark cloud is growing each month.

 

[LawFitz]

The next shoe (or at least a future shoe of reckoning) will be commercial real estate. A wicked storm is brewing there on three fronts:

- Extreme, unforeseen and durable vacancy rates due to remote work;
- >100% increase in mortgage rate levels (it's relative, not absolute rise that matters);
- A coming tsunami of maturities (mostly fixed rate expiries) in 2025;
- Gigantic exposures to the above by the banking system.

Yeah. My understanding is a lot of these CRE rolls will actually be due in late 23 and into 24. I think (as does the market) that the Fed will cut rates by then. This dark cloud is growing each month.

The Fed is caught in rock/hard place mode. Over four decades they created a market and economy addicted to lower and lower interest rates. With each step lower, the underlying energy grew and now they have an absolute monster on their hands. A monster whose cage is being unlocked by inflation and the USD reserve currency hegemony unraveling due to foreign relations.

I'm not certain, but I think we have one last round of rate manipulation ahead before the USD is forsaken and the inflation genie fully emerges. Barbell portfolio now, full inflation protection portfolio later.

 

[Andrew74]

Wish I’d bought more gold last year.

 

[BassNBrew]

@Desert_Power Any risk with a bank like First Citizens? My business assets all well over the $250k threshold.

I would assume they are relatively stable since they were able to win the auction for SVB’s assets. I also think the FDIC will likely make more explicit a full deposit guarantee soon. Still, if there is only one account owner, may make sense to diversify to be extremely safe.

Commercial accounts only have the one owner (the business entity) so you can't increase FDIC coverage like you can with personal accounts in having multiple ownership/beneficiaries etc. Thus the issues SVB, First Repub, etc have had with large commercial deposits fleeing when they hear their money is at risk and thus becoming a self fulfilling prophecy.

Any idea on Trust accounts where I'm holding various different people's monies such as security deposits under my name in one account. I've asked people at the bank and just get a shrug.

Look at your account statement. If there is only one name on there, you are likely to only have 250k in coverage unless you are enrolled in an FDIC sweep product. Seems like Truist should have at least 2 bank charters from the merger to sweep between. If you're really worried, you can avail yourself of one of these good bonuses.

Whew! We’ve just saved you from an infected website​

Avast didn't like your link.

 

[Sand]

Presenting the 2023 Regional Bank Theme Song!

Money Printer Go Brrr (Basstrologe – Somebody To Love Version)

10 Hours of Money Printing HERE: https://youtu.be/422otsewEBwI found original video here: https://www.youtube.com/watch?v=WEMCYBPUR00&ab_channel=4chanCurator...

www.youtube.com

 

[Sand]

@Desert_Power Any risk with a bank like First Citizens? My business assets all well over the $250k threshold.

I would assume they are relatively stable since they were able to win the auction for SVB’s assets. I also think the FDIC will likely make more explicit a full deposit guarantee soon. Still, if there is only one account owner, may make sense to diversify to be extremely safe.

Commercial accounts only have the one owner (the business entity) so you can't increase FDIC coverage like you can with personal accounts in having multiple ownership/beneficiaries etc. Thus the issues SVB, First Repub, etc have had with large commercial deposits fleeing when they hear their money is at risk and thus becoming a self fulfilling prophecy.

Any idea on Trust accounts where I'm holding various different people's monies such as security deposits under my name in one account. I've asked people at the bank and just get a shrug.

I heard on the radio that there is worry that people that are putting escrow up for house sales, property taxes, and all sorts of things could get ****ed. No idea if this is just FUD or what.

By now we know that Joe Schmoe doesn't get his gains privatized and losses socialized. I'd be very worried and would want to make damn sure my RE deal happened on a Tuesday.

 

[Nathan R. Jessep]

Take Your "Safe Money" Out of the Banks, We’re Facing Crisis Greater Than 1930s

"The economy is going to come to a standstill and worse because everything starts imploding," says Bert Dohmen, founder and president of Dohmen Capital Resea...

www.youtube.com

summary I read of this:

Macro Investor Bert Dohmen just issued a dire warning on the future of the US and global economy.​

​

In a new interview with Stansberry Research, the founder of Dohmen Capital Research says anyone who believes the banking crisis is over is engaged in wishful thinking.​

​

​

“We have three of the biggest banking failures in US history within six days and everybody’s pretending this is a one-off event that won’t happen again.​

​

This is the tip of the iceberg, and if you know about icebergs you know one-seventh of the iceberg is above water. That means six-sevenths of the iceberg is below water and that’s going to sink everybody else.​

​

Not only did we have these bank failures in the US, it was followed by the biggest bank failure in Switzerland ever. The biggest bank, Credit Suisse, 137 years old, went bankrupt overnight and had to be bailed out. This is going to be an international crisis.”​

​

Dohmen says decades of systemic risk has also built up in the derivatives market, which he believes is headed for a seismic crash.​

​

“There is about $1.6 quadrillion of derivatives outstanding internationally. That is such a staggering amount. No one can really imagine how big that number is, and it’s totally unregulated. The CFTC in 1999 tried to get derivatives regulated and was fought by the biggest names that you can imagine in the investment field because it would have stopped that whole game of playing with derivatives…​

​

Now nobody really knows exactly how big it is. The best guess is $1.6 quadrillion. It could be $2 quadrillion dollars of derivatives. When they start falling apart it’s going to be like dominoes.”​

​

Dohmen predicts the Fed will print trillions upon trillions of dollars to try to stabilize markets.​

​

He says he withdrew money from banks well in advance of the current crisis, and if US lawmakers don’t reverse course, he forecasts an economic collapse as bad or worse than the Great Depression.​

​

“In the beginning of 2020, so that’s three years ago now, we said this decade is going to be like the 1930’s because the cycle called for that. So that means a 10-year depression, but I said it will probably be much worse than the Great Depression and it all depends on what the government and the Federal Reserve does.​

​

We now see that we’re doing the same thing as the 1930’s where it was a 10-year depression. It could have been a two or three year recession but the policies of Washington really made it a Great Depression… spending up the wazoo, tax increases like you cannot believe.​

​

[President Biden wants] to double the capital gains rate tax from 20% to about 40%. This is a killer for the economy. It’s investors that make the economy. They create businesses and businesses create jobs. If nobody’s creating businesses you have no job creation and everything is done with giving away money and we saw what that caused.”​

​

Dohmen, who is not a believer in Bitcoin and crypto, says gold will be a safe haven – but only after a coming crash.​

​

“The first [gold] phase that we’re in right now is on the way to a top, an important top, and then a very strong correction in gold.​

​

So don’t be trapped when you read headlines that gold made a new record high. That would be a sell signal… Then you’re going to have a big drop and eventually you could have a great buying opportunity when the central banks step on the accelerator and create trillions and trillions of dollars of artificial money.”​

 

[Nathan R. Jessep]

@whoknew might just need to make this the ***OFFICIAL*** Bank Fail thread

 

[Alex P Keaton]

Take Your "Safe Money" Out of the Banks, We’re Facing Crisis Greater Than 1930s

"The economy is going to come to a standstill and worse because everything starts imploding," says Bert Dohmen, founder and president of Dohmen Capital Resea...

www.youtube.com

summary I read of this:

Macro Investor Bert Dohmen just issued a dire warning on the future of the US and global economy.​

​

In a new interview with Stansberry Research, the founder of Dohmen Capital Research says anyone who believes the banking crisis is over is engaged in wishful thinking.​

​

​

“We have three of the biggest banking failures in US history within six days and everybody’s pretending this is a one-off event that won’t happen again.​

​

This is the tip of the iceberg, and if you know about icebergs you know one-seventh of the iceberg is above water. That means six-sevenths of the iceberg is below water and that’s going to sink everybody else.​

​

Not only did we have these bank failures in the US, it was followed by the biggest bank failure in Switzerland ever. The biggest bank, Credit Suisse, 137 years old, went bankrupt overnight and had to be bailed out. This is going to be an international crisis.”​

​

Dohmen says decades of systemic risk has also built up in the derivatives market, which he believes is headed for a seismic crash.​

​

“There is about $1.6 quadrillion of derivatives outstanding internationally. That is such a staggering amount. No one can really imagine how big that number is, and it’s totally unregulated. The CFTC in 1999 tried to get derivatives regulated and was fought by the biggest names that you can imagine in the investment field because it would have stopped that whole game of playing with derivatives…​

​

Now nobody really knows exactly how big it is. The best guess is $1.6 quadrillion. It could be $2 quadrillion dollars of derivatives. When they start falling apart it’s going to be like dominoes.”​

​

Dohmen predicts the Fed will print trillions upon trillions of dollars to try to stabilize markets.​

​

He says he withdrew money from banks well in advance of the current crisis, and if US lawmakers don’t reverse course, he forecasts an economic collapse as bad or worse than the Great Depression.​

​

“In the beginning of 2020, so that’s three years ago now, we said this decade is going to be like the 1930’s because the cycle called for that. So that means a 10-year depression, but I said it will probably be much worse than the Great Depression and it all depends on what the government and the Federal Reserve does.​

​

We now see that we’re doing the same thing as the 1930’s where it was a 10-year depression. It could have been a two or three year recession but the policies of Washington really made it a Great Depression… spending up the wazoo, tax increases like you cannot believe.​

​

[President Biden wants] to double the capital gains rate tax from 20% to about 40%. This is a killer for the economy. It’s investors that make the economy. They create businesses and businesses create jobs. If nobody’s creating businesses you have no job creation and everything is done with giving away money and we saw what that caused.”​

​

Dohmen, who is not a believer in Bitcoin and crypto, says gold will be a safe haven – but only after a coming crash.​

​

“The first [gold] phase that we’re in right now is on the way to a top, an important top, and then a very strong correction in gold.​

​

So don’t be trapped when you read headlines that gold made a new record high. That would be a sell signal… Then you’re going to have a big drop and eventually you could have a great buying opportunity when the central banks step on the accelerator and create trillions and trillions of dollars of artificial money.”​

Interesting. I sort of stopped reading at the part that said Credit Suisse went bankrupt overnight. They’ve been in distress for years, but the Swiss govt kept propping them up behind the scenes.

 

[humpback]

Take Your "Safe Money" Out of the Banks, We’re Facing Crisis Greater Than 1930s

"The economy is going to come to a standstill and worse because everything starts imploding," says Bert Dohmen, founder and president of Dohmen Capital Resea...

www.youtube.com

summary I read of this:

Macro Investor Bert Dohmen just issued a dire warning on the future of the US and global economy.​

​

In a new interview with Stansberry Research, the founder of Dohmen Capital Research says anyone who believes the banking crisis is over is engaged in wishful thinking.​

​

​

“We have three of the biggest banking failures in US history within six days and everybody’s pretending this is a one-off event that won’t happen again.​

​

This is the tip of the iceberg, and if you know about icebergs you know one-seventh of the iceberg is above water. That means six-sevenths of the iceberg is below water and that’s going to sink everybody else.​

​

Not only did we have these bank failures in the US, it was followed by the biggest bank failure in Switzerland ever. The biggest bank, Credit Suisse, 137 years old, went bankrupt overnight and had to be bailed out. This is going to be an international crisis.”​

​

Dohmen says decades of systemic risk has also built up in the derivatives market, which he believes is headed for a seismic crash.​

​

“There is about $1.6 quadrillion of derivatives outstanding internationally. That is such a staggering amount. No one can really imagine how big that number is, and it’s totally unregulated. The CFTC in 1999 tried to get derivatives regulated and was fought by the biggest names that you can imagine in the investment field because it would have stopped that whole game of playing with derivatives…​

​

Now nobody really knows exactly how big it is. The best guess is $1.6 quadrillion. It could be $2 quadrillion dollars of derivatives. When they start falling apart it’s going to be like dominoes.”​

​

Dohmen predicts the Fed will print trillions upon trillions of dollars to try to stabilize markets.​

​

He says he withdrew money from banks well in advance of the current crisis, and if US lawmakers don’t reverse course, he forecasts an economic collapse as bad or worse than the Great Depression.​

​

“In the beginning of 2020, so that’s three years ago now, we said this decade is going to be like the 1930’s because the cycle called for that. So that means a 10-year depression, but I said it will probably be much worse than the Great Depression and it all depends on what the government and the Federal Reserve does.​

​

We now see that we’re doing the same thing as the 1930’s where it was a 10-year depression. It could have been a two or three year recession but the policies of Washington really made it a Great Depression… spending up the wazoo, tax increases like you cannot believe.​

​

[President Biden wants] to double the capital gains rate tax from 20% to about 40%. This is a killer for the economy. It’s investors that make the economy. They create businesses and businesses create jobs. If nobody’s creating businesses you have no job creation and everything is done with giving away money and we saw what that caused.”​

​

Dohmen, who is not a believer in Bitcoin and crypto, says gold will be a safe haven – but only after a coming crash.​

​

“The first [gold] phase that we’re in right now is on the way to a top, an important top, and then a very strong correction in gold.​

​

So don’t be trapped when you read headlines that gold made a new record high. That would be a sell signal… Then you’re going to have a big drop and eventually you could have a great buying opportunity when the central banks step on the accelerator and create trillions and trillions of dollars of artificial money.”​

This decade is probably going to be much worse than the great depression?

 

[Nathan R. Jessep]

Take Your "Safe Money" Out of the Banks, We’re Facing Crisis Greater Than 1930s

"The economy is going to come to a standstill and worse because everything starts imploding," says Bert Dohmen, founder and president of Dohmen Capital Resea...

www.youtube.com

summary I read of this:

Macro Investor Bert Dohmen just issued a dire warning on the future of the US and global economy.​

​

In a new interview with Stansberry Research, the founder of Dohmen Capital Research says anyone who believes the banking crisis is over is engaged in wishful thinking.​

​

​

“We have three of the biggest banking failures in US history within six days and everybody’s pretending this is a one-off event that won’t happen again.​

​

This is the tip of the iceberg, and if you know about icebergs you know one-seventh of the iceberg is above water. That means six-sevenths of the iceberg is below water and that’s going to sink everybody else.​

​

Not only did we have these bank failures in the US, it was followed by the biggest bank failure in Switzerland ever. The biggest bank, Credit Suisse, 137 years old, went bankrupt overnight and had to be bailed out. This is going to be an international crisis.”​

​

Dohmen says decades of systemic risk has also built up in the derivatives market, which he believes is headed for a seismic crash.​

​

“There is about $1.6 quadrillion of derivatives outstanding internationally. That is such a staggering amount. No one can really imagine how big that number is, and it’s totally unregulated. The CFTC in 1999 tried to get derivatives regulated and was fought by the biggest names that you can imagine in the investment field because it would have stopped that whole game of playing with derivatives…​

​

Now nobody really knows exactly how big it is. The best guess is $1.6 quadrillion. It could be $2 quadrillion dollars of derivatives. When they start falling apart it’s going to be like dominoes.”​

​

Dohmen predicts the Fed will print trillions upon trillions of dollars to try to stabilize markets.​

​

He says he withdrew money from banks well in advance of the current crisis, and if US lawmakers don’t reverse course, he forecasts an economic collapse as bad or worse than the Great Depression.​

​

“In the beginning of 2020, so that’s three years ago now, we said this decade is going to be like the 1930’s because the cycle called for that. So that means a 10-year depression, but I said it will probably be much worse than the Great Depression and it all depends on what the government and the Federal Reserve does.​

​

We now see that we’re doing the same thing as the 1930’s where it was a 10-year depression. It could have been a two or three year recession but the policies of Washington really made it a Great Depression… spending up the wazoo, tax increases like you cannot believe.​

​

[President Biden wants] to double the capital gains rate tax from 20% to about 40%. This is a killer for the economy. It’s investors that make the economy. They create businesses and businesses create jobs. If nobody’s creating businesses you have no job creation and everything is done with giving away money and we saw what that caused.”​

​

Dohmen, who is not a believer in Bitcoin and crypto, says gold will be a safe haven – but only after a coming crash.​

​

“The first [gold] phase that we’re in right now is on the way to a top, an important top, and then a very strong correction in gold.​

​

So don’t be trapped when you read headlines that gold made a new record high. That would be a sell signal… Then you’re going to have a big drop and eventually you could have a great buying opportunity when the central banks step on the accelerator and create trillions and trillions of dollars of artificial money.”​

This decade is probably going to be much worse than the great depression?

Yeah, I at that too. That said, I don't think a depression is out of question at this point.