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The hell of it is...with mandatory EFT for payroll and other income, there's not a practical way to de-bank one's self.Bail-ins support banks
Moral hazard unleashed
Socialized losses
... Savage.
FDIC honcho faces Senate panel today...
Simon White - Bloomberg macro strategist said:... over the last two years small banks have doubled down on their CRE exposure to almost a third of assets - with barely a pause after SVB – while large banks have reduced theirs down to 6.5%.
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Not all CRE is bad, and not all banks will find themselves in trouble from souring commercial loans. But it is highly conceivable some will. Those with most exposure to office space, given rising delinquency rates, and to multifamily residential due to collapsing apartment prices, are a good place to start.
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Furthermore, banks that make lots of loans quickly often run into issues down the line as underwriting standards can slip in haste (or are willfully overlooked to gain market share). Thus another first approach is to look at the banks who have seen their exposure to CRE rise the most since SVB’s bankruptcy.
Perhaps not uncoincidentally, some of the most shorted regional banks are those that have seen the fastest growth in commercial real estate loans, including Arkansa-based Bank OZK and BOK Financial Corporation.
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Einstein’s definition of insanity was doing the same thing over and over again and expecting a different outcome. Smaller banks in the US continue to lose money on commercial real estate, face heavy losses on securities portfolios as yields push higher, and are just as exposed in the aggregate to bank runs from uninsured deposits. Sanity thus demands being ready for more bank failures.
George Gleason, a lawyer at the Rose Law Firm, bought Bank of Ozark in 1979 when it had $28 million in assets and changed its name to Bank of the Ozarks. In 1994 the bank had five locations but began expanding. The headquarters moved to Little Rock in 1995Just in time. Pretty sure we've discussed Bank OZK before. Perhaps not. They have an outsized CRE loan position.
Well today Citibank analyst just lowered their rating (from a March 2024 Buy) ALL the way down to Sell. These guys Never put out a sell. Watch this bank closely.
The US may need to legislate special funds ...
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In its Quarterly Banking Profile report, the FDIC says banks are now saddled with more than half a trillion dollars in paper losses on their balance sheets, due largely to exposure to the residential real estate market.
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“Unrealized losses on available-for-sale and held-to-maturity securities increased by $39 billion to $517 billion in the first quarter. Higher unrealized losses on residential mortgage-backed securities, resulting from higher mortgage rates in the first quarter, drove the overall increase. This is the ninth straight quarter of unusually high unrealized losses since the Federal Reserve began to raise interest rates in first quarter 2022.”
The FDIC also says that the number of lenders on its Problem Bank List rose last quarter. According to the agency, these banks are on the brink of insolvency due to financial, operational, or managerial weakness or a combination of such issues.
“The number of banks on the Problem Bank List, those with a CAMELS composite rating of ‘4’ or ‘5’ increased from 52 in fourth quarter 2023 to 63 in first quarter 2024. The number of problem banks represented 1.4% of total banks, which was within the normal range for non-crisis periods of 1% to 2% of all banks. Total assets held by problem banks increased $15.8 billion to $82.1 billion during the quarter.”
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George Gleason, a lawyer at the Rose Law Firm, bought Bank of Ozark in 1979 when it had $28 million in assets and changed its name to Bank of the Ozarks. In 1994 the bank had five locations but began expanding. The headquarters moved to Little Rock in 1995
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** The Petrodollar will have ceased to exist this coming Monday morning. For 50 years, the Saudis have made the entire world use US fiat for their oil. That deal is OVER. [door slams shut]
The Basel Committee on Banking Supervision met on 28–29 February 2024 in Madrid to take stock of recent market developments and risks to the global banking system, and to discuss a range of policy and supervisory initiatives.
- Basel Committee approves revisions to Core principles for effective banking supervision.
- Decides to consult on potential measures to address window-dressing behaviour by some banks in the context of the framework for global systemically important banks.
- Reaffirms expectation that all aspects of Basel III will be implemented in full, consistently and as soon as possible.
Basel Committee agrees to revisions to Basel Core Principles, consults on addressing window-dressing in the G-SIB framework and reaffirms expectation about Basel III implementation
Basel Committee approves revisions to Core principles for effective banking supervision. Decides to consult on potential measures to address window-dressing behaviour by some banks in the context of the framework for global systemically important banks. Reaffirms expectation that all aspects of...www.bis.org
Looks like the little bit of calm before the storm may be done. This seems bad. And just in time for the US markets to be Closed for Juneteenth nonsense on a quad witching week. Large Japanese bank will be dumping foreign bonds (like you know, ours).
The Music Just Stopped: Japan Banking Giant Norinchukin To Liquidate $63 Billion In Treasuries & European Bonds To Plug Massive Unrealized Losses | ZeroHedge
ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zerowww.zerohedge.com
There is something "amiss" in the U.S. banking sector, says Gareth Soloway, Chief Market Strategist at VerifiedInvesting.com, warning that big institutional players are "unloading" the stocks of big banks.
"I'm hearing a lot of chatter about the big banks unloading bad debt right now, trying to get ahead of some sort of crisis looming," Soloway tells Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. "Because interest rates are so high, the amount of losses in mortgage-backed securities potentially rival what we saw in 2008 and 2009. In addition, the commercial real estate market is in tatters. And these are all things that banks are holding on their balance sheets."
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On Friday, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board jointly released their findings on the resolution or wind-down plans in a potential bankruptcy of the eight megabanks in the U.S. The plans are also known as “living wills.”
It came as no surprise to us that the four largest U.S. derivative banks — JPMorgan Chase, Citigroup’s Citibank, Bank of America and Goldman Sachs — were faulted on shortcomings in how they planned to wind down their derivatives. The surprise was that the Fed – which has a gold-plated revolving door to these banks – would acknowledge the derivatives problem after years of ignoring it.
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The obvious answer, OF COURSE, is to only keep "convenience accounts" in the drainpipes called banks. No serious money, just enough to write checks for rent, etc.Whoops!
How thousands of Americans got caught in fintech’s false promise and lost access to bank accounts
PUBLISHED TUE, JUL 2 2024
KEY POINTS
- For customers, fintech promised the best of both worlds: The innovation, ease of use and fun of the newest apps combined with the safety of government-backed accounts held at real banks.
- The collapse of middleman Synapse has revealed fintech’s promise of safety as a mirage. More than 100,000 Americans with $265 million in deposits have been locked out of their accounts.
- The implications of this disaster may be far-reaching. The most popular banking apps in the country, including Block’s Cash App, PayPal and Chime, partner with banks instead of owning them.
- CNBC reached out to fintech customers whose lives have been upended by the Synapse debacle. They all believed their money was protected by an FDIC safety net.
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