First Republic Bank drops 50%

[retaocleg]

imminently, but not yet...

Third Major American Bank Collapses, Regulators Will Soon Take Company Over: Report

Women Entertainment Sysytem

www.womensystems.com

 

[DLC]

The fed will work a deal over the weekend to get 1st Republic converted into something else…..

Mid morning Monday you’ll know waz up doc!

unless you know someone in the loop it’s a toss up right now

 

[regor]

The fed will work a deal over the weekend to get 1st Republic converted into something else…..

Mid morning Monday you’ll know waz up doc!

unless you know someone in the loop it’s a toss up right now

Update (2210ET): As the weekend begins, the WSJ reports late on Friday that big banks including JPMorgan and PNC are set to buy First Republic Bank but not in a private, market-arranged deal but rather in a transaction that would follow a government seizure of the troubled lender. A seizure and sale of First Republic, which would wipe out the equity of FRC and potentially impose losses on creditors, could come as soon as this weekend, the WSJ sources said.

And so JPM, which is already the largest US bank is about to get even bigger, by scooping up all the good FRC assets while leaving US taxpayer holdings on to the toxic ones.

That said, it wasn't immediately clear whether the $30 billion in deposits funneled by JPM and other banks into FRC will be treated as insured funds (why should they should be insured?), nor was it clear how a wipeout of this capital, which would spark a systemic crisis simply because the Fed is now running policy of "monetary tightening through bank collapse", having failed to contain inflation and tighten policy using conventional means.

 

[DLC]

They want it for Pennys on the dollar. Then cherry pic wants good / bad…. Left over

Thats where the fed needs to step up

 

[pronstar]

And so JPM, which is already the largest US bank is about to get even bigger, by scooping up all the good FRC assets while leaving US taxpayer holdings on to the toxic ones.

Welcome to the new capitalism, where profits are privately held and losses are heaped onto the back of taxpayers.

I don’t mean to sound like a dick, I know there are real people who will feel pain.

But from an overal perspective, a herd that’s never culled can never be healthy.

It’s simply more government distortion that will eventually have to be reckoned with. An “unintended consequence” of monkeying with rates to fight inflation, when the Fed literally says “we don’t understand inflation” and in fact are the underlying cause.

 

[pronstar]

Meanwhile literally every legit financial analyst saw this coming…I’m not talking some obscure YouTube channel. We’re taking the likes of Ray Dalio and numerous others.

More PhD economists work at the Fed then anywhere on earth. And all they can do is watch what their models tell them…and the shit those models spew is the fucking result of the manipulated data being input.

 

[pronstar]

Playing devils advocate…the Fed could push for a sale/takeover, and not receivership.

The last thing the Fed wants are the optics of banking failures.

Especially since SVB was publicly declared by the Fed as an “outlier” not indicative of a failure of the larger banking system.

 

[Paradox]

In this Morning’s Paper

 

[Paradox]

And that’s all she wrote..

First Republic Bank seized by FDIC and sold to JPMorgan

It's the largest lender to collapse since the 2008 financial crisis — bigger than Silicon Valley Bank, which went under in March.

www.nbcnews.com

 

[bonesfab]

JP Morgan. Too big to fail. Yea right.

 

[PaPaG]

And as the folks that follow the info predicted, JP Morgan took over First Republic's bank deposits and assets.

FDIC estimates $13 billion hit to Deposit Insurance Fund. forth major bank to fail this year.

 

[DrunkenSailor]

This is the savings and loan crisis all over again... The fed raised rates too quickly. Banks with "good" long term debt at low rates are paying higher rates on deposits than the long term debt yields. Competitor banks steal depositors with higher saving rate offers. Deposit outflows start, balance sheet pains hit financials and stock prices plummet. More depositors flee due to run and the bank ends up in receivership.

 

[regor]

This is the savings and loan crisis all over again... The fed raised rates too quickly. Banks with "good" long term debt at low rates are paying higher rates on deposits than the long term debt yields. Competitor banks steal depositors with higher saving rate offers. Deposit outflows start, balance sheet pains hit financials and stock prices plummet. More depositors flee due to run and the bank ends up in receivership.

 

[hallett21]

View attachment 1225144

They’re gonna have to back off. There’s gotta be more banks on the brink of disaster

 

[regor]

They’re gonna have to back off. There’s gotta be more banks on the brink of disaster

I doubt they will, they're suppose to raise this week.

Crowding-Out. The Fed May Be Killing The Private Sector To Save Government​

The first-quarter GDP figure was extremely concerning...

MON MAY 1, AT 5:05 AM

 

[Havasu blue label]

This is the savings and loan crisis all over again... The fed raised rates too quickly. Banks with "good" long term debt at low rates are paying higher rates on deposits than the long term debt yields. Competitor banks steal depositors with higher saving rate offers. Deposit outflows start, balance sheet pains hit financials and stock prices plummet. More depositors flee due to run and the bank ends up in receivership.

Yes sir a credit union in Pasadena this morning 6 suits and a van where going through the bank

 

[Havasu blue label]

Stock market is a trap bet

 

[regor]

The money changers would have it no other way.

Destroy it to capitalize on it…………

Our populace

 

[TCHB]

JP Morgan to the rescue. They have some pretty smart people in the acquisition group.

 

[n2otoofast4u]

Where does that leave stock holders? They get a big ol goose egg?

 

[Gonefishin5555]

So confusing but I'm going to assume that JP Morgan is making out with a bunch of profit and not much risk.

 

[regor]

JP Morgan to the rescue. They have some pretty smart people in the acquisition group.

 

[Runs2rch]

View attachment 1225620

No joke that is the face I made when I read that post. hahaha

 

[hallett21]

Where does that leave stock holders? They get a big ol goose egg?

$2.50 a share I believe

 

[boatnam2]

I remember watching old Mr Diamond 2 years ago saying they are stacking cash for future, making sense now.

 

[DrunkenSailor]

Where does that leave stock holders? They get a big ol goose egg?

Right now it sounds like they are 4th in line on the creditor list. My guess is a big fat zero but we will see.

 

[DLC]

This is the savings and loan crisis all over again... The fed raised rates too quickly. Banks with "good" long term debt at low rates are paying higher rates on deposits than the long term debt yields. Competitor banks steal depositors with higher saving rate offers. Deposit outflows start, balance sheet pains hit financials and stock prices plummet. More depositors flee due to run and the bank ends up in receivership.

also creating a monopoly with to big to fail

Small neighborhood banks don’t stand a chance and won’t get any sort of hand up !

 

[regor]

The Banking Collapse Of 2023 Is Now Officially Bigger Than The Banking Collapse Of 2008 Was

www.investmentwatchblog.com

JPMorgan is getting about $92 billion in deposits in the deal, which includes the $30 billion that it and other large banks put into First Republic last month. The bank is taking on $173 billion in loans and $30 billion in securities as well.

The Federal Deposit Insurance Corporation agreed to absorb most of the losses on mortgages and commercial loans that JPMorgan is getting, and also provided it with a $50 billion credit line.

Figured out the rigged casino yet?!!!!

Burn the FED and seize ALL of their assets!!

 

[Orange Juice]

$2.50 a share I believe

Where did you read that?

I’m sitting on a bunch of FRC puts, I bought back when this SilverGate thing started.

I’m waiting to be paid off. Never had to wait, to sell options, but this is a new one for me. . I’m thinking I might have to wait for the expiration date to expire? I’m pretty excited how this turned out.

 

[Paradox]

Where did you read that?

I’m sitting on a bunch of FRC puts, I bought back when this SilverGate thing started.

I’m waiting to be paid off. Never had to wait, to sell options, but this is a new one for me. . I’m thinking I might have to wait for the expiration date to expire? I’m pretty excited how this turned out.

Good for you. I read that “The stock has stopped trading as of Monday, and shareholders won't receive stock in JPMorgan, according to a JPMorgan spokesman.” As a result, I’m assuming your puts will make the spread between your option price and zero. is that right?

As an aside, Silvergate ended up being a good one for me. I sold last July at $83 plus a share.

 

[Orange Juice]

Good for you. I read that “The stock has stopped trading as of Monday, and shareholders won't receive stock in JPMorgan, according to a JPMorgan spokesman.” As a result, I’m assuming your puts will make the spread between your option price and zero. is that right?

As an aside, Silvergate ended up being a good one for me. I sold last July at $83 plus a share.

That’s what I’m assuming.
But not sure if I wait until the options expire, to collect, or if there’s another trigger point.

 

[regor]

S**t Just Hit The Fan Across Markets, Regional Banks Crashing​

...debt ceiling doubts, dismal data, bank runs, or Fed fears?

TUE MAY 2, AT 7:37 AM


Despite the Biden admin claiming that FRC was just another 'outlier' business model, PacWest, Western Alliance, and Zions (among others) are in a freefall...

 

[ChumpChange]

S**t Just Hit The Fan Across Markets, Regional Banks Crashing​

...debt ceiling doubts, dismal data, bank runs, or Fed fears?

TUE MAY 2, AT 7:37 AM


Despite the Biden admin claiming that FRC was just another 'outlier' business model, PacWest, Western Alliance, and Zions (among others) are in a freefall...

One by one we can take them down!

 

[EmpirE231]

will they raise rates?

 

[Done-it-again]

will they raise rates?

The market thinks so.... @ .25

 

[ChumpChange]

will they raise rates?

Yup. They need to show that “everything’s fine”.

 

[530RL]

One by one we can take them down!

People bitch about how the big banks have become a monopoly charging exorbitant fees and not lending to the little guy all the while making a run on the regionals who only become insolvent due to the run.

Hard not to chuckle.

 

[regor]

People bitch about how the big banks have become a monopoly charging exorbitant fees and not lending to the little guy all the while making a run on the regionals who only become insolvent due to the run.

Hard not to chuckle.

I'm gunna be chuckling when they've got you money changers in their sights, that's for sure.

Forget the 'Twitter-fueled bank run.' SVB was doomed by a network of wealthy VCs warning founders to pull funds 'as fast as possible' in private, sources say.

“I've never seen phone calls be as popular as they were for those 48 hours,” said Alred Chuang, an investor at VC firm Race Capital.

fortune.com

Gunjit Singh, the San Francisco-based co-founder of Electric Sheep Robotics, first heard chatter about Silicon Valley Bank’s financial straits in January via WhatsApp messages. Initially he dismissed it. His company, which makes robotic lawn mowers, had a line of credit and most of its cash with the bank, but the worry at that point was mostly theoretical. “There are rumors about everything,” he said.


The rumors, of course, turned out to be true. Silicon Valley Bank had liquidity issues thanks to the combination of rising interest rates and a large portfolio of long-term, low-interest assets. When it moved to shore up its financial position in early March, many people started taking the risks more seriously.



It was Wednesday, March 8, the day before the company’s stock tumbled 60%, when Alfred Chuang became aware of worries over Silicon Valley Bank’s health, mostly via email and phone calls. Chuang, an investor at VC firm Race Capital, said chief executive officers of public companies began warning him about the bank that evening. “I knew it meant one thing: They were withdrawing money,” Chuang said. Race Capital “exited out of SVB in record time.”


Entrepreneur Vijay Rayapati also started getting phone calls on Wednesday. Rayapati, co-founder and CEO of the software firm Atomicwork, was at lunch at a conference in Santa Monica, California, when he missed two calls from a friend and fellow founder. Swept up in the hubbub of the conference he didn’t think to call back right away. But the same friend dialed again twice that night, waking Rayapati in his
hotel room. What, he asked, was Rayapati doing about his money at Silicon Valley Bank? The friend was already moving out his funds.


Understanding the risk, Rayapati acted quickly. He tried to pull out Atomicwork’s cash and asked his team to transfer a year’s worth of operational expenses to the startup’s subsidiaries. At 2 a.m. Thursday morning, Rayapati wrote a message to a close-knit WhatsApp group of India- and Silicon Valley-based founders of software companies called DPC, short for Daru Pe Charcha. Daru is slang for alcohol in Hindi, and daru pe charcha translates to “chat over drinks.”


“Folks, we were alerted by multiple people to secure some funds outside SVB due to their liquidity issues and ratings downgrade,” he wrote to the group. “This might cascade. Just a friendly warning.”



One of the people who saw that message was Avinash Raghava, CEO of SaasBoomi, a group of hundreds of mostly software company founders in India and the US.
The danger was credible, Raghava concluded, and he shared the warning with a WhatsApp group of about 400 people. When he woke up the next morning, 265 messages awaited him on the group.


Founders were sharing everything – Sam Altman tweets, news clips from the web, their own challenges. “It was like we were all locked inside when the fire alarm went off,” said Raghava. “And nobody knew where the exit was.” The “Is Typing” blurb did not stop on the WhatsApp group for hours. Soon, Raghava said, the original warning had found its way to a larger group of 1,500 founders on a Slack-like channel called Circle.


Around the world, similar groups were circulating their own messages of warning. Large text threads lit up in the US, including among chief financial officers of big startups, according to two people familiar with the communications. On the threads, many startup founders and executives worried that a collapse of Silicon Valley Bank would affect the industry’s infrastructure. By noon on Thursday, one person said, concern in many such groups had turned to panic.


Nice try clown.

 

[regor]

One by one we can take them down!

It's a viscous cycle no doubt........................but one of the money changer's doing.

I'm sure you're a good money changer CC, but the industry and especially the scum on top aren't.

It's time for the nation to see the FED and the banksters for who they are.

 

[lbhsbz]

So...if the Fed (we) seem to be securing everything...what's the point of having money anymore? It's all fake. This explains why so many just walk out of stores with armfuls of merchandise while us dumbfucks keep paying for it

 

[EmpirE231]

So...if the Fed (we) seem to be securing everything...what's the point of having money anymore? It's all fake. This explains why so many just walk out of stores with armfuls of merchandise while us dumbfucks keep paying for it

it's all funny money and clown world at this point! Only dummies playing along are us rule followers and law abiding types

 

[DrunkenSailor]

A hoover institute study shows more than 2315 US banks are currently sitting on assets worth less than their liabilities.

First republics largest pain point was commercial real estate debt. In close second was having losses and long term residential real estate debt.

There are 5 trillion in implicit losses driven by the feds QE and rate hikes. US banks have 2 trillion in tangible equity capital....

First republic will not be the last.

Monetary Tightening and U.S. Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs?

www.gsb.stanford.edu

 

[530RL]

A hoover institute study shows more than 2315 US banks are currently sitting on assets worth less than their liabilities.

First republics largest pain point was commercial real estate debt. In close second was having losses and long term residential real estate debt.

There are 5 trillion in implicit losses driven by the feds QE and rate hikes. US banks have 2 trillion in tangible equity capital....

First republic will not be the last.

Monetary Tightening and U.S. Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs?

www.gsb.stanford.edu

Every single bond purchased whether public or private and loan originated by a bank or investment company a year ago is worth less than what they paid for it simply due to rising rates. Every single one of them. Regardless of credit quality.

But it is not an incurred loss unless one has to sell that asset, and it may still have a net interest margin, albeit smaller than when originated or purchased.

First Republic continued to have a positive net interest margin between their assets and liabilities including a 2.45 percent net interest margin in Q4 2022 generating net interest income of 1.2 billion for the quarter.

Once the run started, it was over as the assets, even though they had a positive net interest margin, would have to be sold at a loss to cover the deposit withdrawals.

JP Morgan will make a fortune on this deal. Their net interest margin on these assets will be even higher than was First Republic's due to their lower cost of deposits. And they have the ability to hold them to maturity resulting in no principal loss and depending upon their deal with the Fed's a principal gain.

This failure was a direct result of a run on the bank. Absent a run, First Republic would have reported significant net interest margin and net interest income in Q1 and would have been able to manage to roll off the lower yielding assets as they matured or adjusted.

This is the banking model. They lend long and borrow short and manage the spread. No bank survives a run of this size, half of the deposits.

Even a small business has cash that runs in and out above 250,000. For regional banks to survive and prevent runs I suspect the FDIC is going to raise depositor insurance limits. Otherwise small and regional banks will go the way of the dodo bird.

https://news.firstrepublic.com/static-files/55bfd3c6-39f0-4587-9c7e-f96d5a99ec25

 

[pronstar]

A hoover institute study shows more than 2315 US banks are currently sitting on assets worth less than their liabilities.

First republics largest pain point was commercial real estate debt. In close second was having losses and long term residential real estate debt.

There are 5 trillion in implicit losses driven by the feds QE and rate hikes. US banks have 2 trillion in tangible equity capital....

First republic will not be the last.

Monetary Tightening and U.S. Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs?

www.gsb.stanford.edu

But…but…the guys in suits say SVB was an isolated incident

Honestly, with fiat currency, I truly think they have to lie, what else are they going to say?

Anything less than unicorns and roses will undermine what little confidence is left in the system.

It’s all a con.
But it’s the least-shitty con compared to alternatives.

 

[Orange Juice]

will they raise rates?

The 30 year T-bill won’t budge…..its an easy decision at the moment. Keep raising until the 30 year hits 4%.

 

[regor]

Every single bond purchased whether public or private and loan originated by a bank or investment company a year ago is worth less than what they paid for it simply due to rising rates. Every single one of them. Regardless of credit quality.

But it is not an incurred loss unless one has to sell that asset, and it may still have a net interest margin, albeit smaller than when originated or purchased.

First Republic continued to have a positive net interest margin between their assets and liabilities including a 2.45 percent net interest margin in Q4 2022 generating net interest income of 1.2 billion for the quarter.

Once the run started, it was over as the assets, even though they had a positive net interest margin, would have to be sold at a loss to cover the deposit withdrawals.

JP Morgan will make a fortune on this deal. Their net interest margin on these assets will be even higher than was First Republic's due to their lower cost of deposits. And they have the ability to hold them to maturity resulting in no principal loss and depending upon their deal with the Fed's a principal gain.

This failure was a direct result of a run on the bank. Absent a run, First Republic would have reported significant net interest margin and net interest income in Q1 and would have been able to manage to roll off the lower yielding assets as they matured or adjusted.

This is the banking model. They lend long and borrow short and manage the spread. No bank survives a run of this size, half of the deposits.

Even a small business has cash that runs in and out above 250,000. For regional banks to survive and prevent runs I suspect the FDIC is going to raise depositor insurance limits. Otherwise small and regional banks will go the way of the dodo bird.

https://news.firstrepublic.com/static-files/55bfd3c6-39f0-4587-9c7e-f96d5a99ec25

Now explain the FED's accelerated rate of interest rates and how that fueled those pesky little depositors to dare to move their deposits.


The FED held rates forever (their doing) and had to raise quickly to curb inflation (again their doing) but it's the bank run that is the problem?!!!


It's transitory, it's transitory............................

 

[EmpirE231]

Every single bond purchased whether public or private and loan originated by a bank or investment company a year ago is worth less than what they paid for it simply due to rising rates. Every single one of them. Regardless of credit quality.

But it is not an incurred loss unless one has to sell that asset, and it may still have a net interest margin, albeit smaller than when originated or purchased.

First Republic continued to have a positive net interest margin between their assets and liabilities including a 2.45 percent net interest margin in Q4 2022 generating net interest income of 1.2 billion for the quarter.

Once the run started, it was over as the assets, even though they had a positive net interest margin, would have to be sold at a loss to cover the deposit withdrawals.

JP Morgan will make a fortune on this deal. Their net interest margin on these assets will be even higher than was First Republic's due to their lower cost of deposits. And they have the ability to hold them to maturity resulting in no principal loss and depending upon their deal with the Fed's a principal gain.

This failure was a direct result of a run on the bank. Absent a run, First Republic would have reported significant net interest margin and net interest income in Q1 and would have been able to manage to roll off the lower yielding assets as they matured or adjusted.

This is the banking model. They lend long and borrow short and manage the spread. No bank survives a run of this size, half of the deposits.

Even a small business has cash that runs in and out above 250,000. For regional banks to survive and prevent runs I suspect the FDIC is going to raise depositor insurance limits. Otherwise small and regional banks will go the way of the dodo bird.

https://news.firstrepublic.com/static-files/55bfd3c6-39f0-4587-9c7e-f96d5a99ec25

blame fractional reserve banking? or inflation... or the fed? all the above?

 

[regor]

blame fractional reserve banking? or inflation... or the fed? all the above?

Stop noticing!!!!!!!!!!

 

[bowtiejunkie]

That’s what I’m assuming.
But not sure if I wait until the options expire, to collect, or if there’s another trigger point.

Research what happened to the SiVB puts. Should be same sort of situation as First Republic Bank. FRB was shutdown and stock halted. Then sold to JP Morgan Chase, which left behind the preferred shares, common shares, and some other items. Similar to SVB, however SVB went through a bridge bank stage before being sold. Different brokers were putting different prices on SIVB stock before it began trading again OTC as SIVBQ.

 

[regor]

The banksters described in 1 minute.