BigHornRam
Well-known member
The Dave Ramsey cash is king side is going to say there are screaming deals right now on those $100 a bottle California wines!
Anybody Buying Yet? Where’s the Bottom?
- Thread starter NEWHunter
- Start date
Shangobango
Well-known member
Anyone looking to buy some of the larger more stable banks at this time? I am very intrigued looking at WFH, BAC, MTB, PNC, and even RF and KEY at these prices.
Going to be watching closely this week.
Going to be watching closely this week.
SAJ-99
Well-known member
Check your ratios here. SIVB was "special", but a lot of the regionals are hiding unrealized losses in the HTM bucket.
Shangobango
Well-known member
Thanks for that. Awesome piece of information!
SAJ-99
Well-known member
Apparently there were lines outside some Bay-area First Republic branches on Saturday. FRC might have a rough Monday.
rogerthat
Well-known member
- Joined
- Aug 29, 2015
- Messages
- 2,918
Is this something finally breaking?
Mountain Man
Well-known member
Yes it is. It will be interesting to see what happens on Monday. Seems like the Government wants to bail out the depositors. Roku had over $400 million deposited. That’s quite a generous bail out for a single company that obviously didn’t take precautions to keep its money safe. This will be extremely interesting to watch unfold.
SAJ-99
Well-known member
Who knows. Bank runs are completely emotion-driven events. There will be some great buying opportunities in some of these regionals, but when and which ones is hard to say. I don't think it is systemic. JPM, C, and WFC will be fine. I wonder if this kind of thing gets private equity investors to wake up and stop funding any idea that comes in the door (while I own DFLI, so yes I see the irony) when they see commitments get cut by 30% and some of these investment firms go under. Between Silvergate and SVB, we can conclude that specialty banks are
Current news
Fed opens discount window, so other banks can get cash.
FDIC pondering what level of depositors balance to save. Third-party bids on deposits have ranged from 50cents to 70cents.
Bitcoin up 4.5%, so the run on banks helping that asset?
My only argument is you can't expect a company to have 1600 accounts at $250,000 each across various banks. Could have done a better job of risk management, but...
Shangobango
Well-known member
My brain may not be from trying to figure out an entry point. I know timing the market is sometimes sticky but man this has my wheel turning.
Mountain Man
Well-known member
I agree. That number of accounts would not be sustainable on the accounting side. My point was more that it appears they held all their cash in a single bank in a single account. This may not be the case, but that is how the article conveyed it. Poor risk management was what I was trying to highlight. Easy to say after the bank failure, but that seems a bit egregious. Is it normal for companies to have hundreds of millions of dollars sitting in cash in a single bank?
First Republic is down 65% pre-market.
Nameless Range
Well-known member
Thought this was a succinct musing:
marginalrevolution.com
"The core problem is this: regulators can only protect so much of the financial system. Yet in a wealthy, peaceful economy the financial system often grows more rapidly than does gdp, if only because the financial system is based on the intermediation of wealth, not income. Simple accumulation boosts the ratio of wealth to income over time, thereby creating regulatory dilemmas for finance. Neither “regulating more and more of it” nor “letting more and more of it continue in a less regulated manner” are entirely satisfactory solutions.
But those of course are the only options available to us."
Can the SVB crisis be solved in the longer run? - Marginal REVOLUTION
The failure and closure of Silicon Valley Bank (SVB) raise immediate issues as to how policymakers should react. I’d like to step back and consider what this implies for banking regulation more generally in the longer run. The main lesson is that successful bank regulation is an ongoing, dynamic...
marginalrevolution.com
"The core problem is this: regulators can only protect so much of the financial system. Yet in a wealthy, peaceful economy the financial system often grows more rapidly than does gdp, if only because the financial system is based on the intermediation of wealth, not income. Simple accumulation boosts the ratio of wealth to income over time, thereby creating regulatory dilemmas for finance. Neither “regulating more and more of it” nor “letting more and more of it continue in a less regulated manner” are entirely satisfactory solutions.
But those of course are the only options available to us."
SAJ-99
Well-known member
Agree. Probably not normal to have that much cash at a single bank. The speed of this failure was unprecedented. Companies often have to move large sums of money to an account for payroll processing. When a bank collapses in 48hrs it is hard for them to not get caught offsides. It looks like FDiC said all deposits will be paid, so the point is moot.
I get where Cowen is going but I have two issues with some of it. One a small bank is more likely to have a concentrated depositor base, like SVB (although it wasn’t small) and a too-big-to-fail bank is going to be very diversified. The depositors acting at the same time to pull money is what caused the failure. Without that, SVB would be opening this morning without any problems. So I could easily argue we have too many banks.
Second, regulation here worked. The capital ratios and stress tests showed there was a problem. My complaint is the regulators let the bank do it anyway. The bank was poorly managed, but regulators have to have the power to stop a bad action. A 10yr or 30yr treasury may be classified as risk free for capital purposes, but as 2022 showed, it clearly isn’t risk free. You can’t let a bank get that mismatched on asset/liability tenures. I’m not sure how it happened.
jryoung
Well-known member
Had a friend that went there Saturday and waited 3 hours and couldn't get in. I recently moved most my business banking over to First Republic because of promotions with my payroll company. Payroll is due today.....good times.
SAJ-99
Well-known member
SAJ-99
Well-known member
Shangobango
Well-known member
Yup. Some of these are getting hammered. I am watching RF, JPM, BAC, and WFH like a hawk.
Shangobango
Well-known member
Add MTB and C to that list.
Shangobango
Well-known member
KEY, CMA, and FITB getting clobbered.
SAJ-99
Well-known member
Took off GLD position. Holding SLV. Spike in implied vol made the options worth more and GLD now over bought. I don't think that Imp vol will remain high. First win in gold for me in a long time. SLV price has a longer runway.
