Context: The FTX collapse in November 2022 appears to be the start of this current banking crisis. FTX collapse apparently damaged Silvergate Capital. Silvergate Capital failure on 3-8-23 damaged SVB on 3-9-23, resulting in its failure on 3-10-23. Silvergate Capital ripple possibly cause of Signature Bank (NY) failure on 3-12-23. Ripples sent to 6 more banks on 3-13-23 resulting in the Moody's watch alert. Connection between SVB or Silvergate and Signature has not yet been explicitly identified. Signature Bank was being sued over FTX.
Real Time Trade Halts to see publicly traded banks having liquidity issues per investor reactions and volatility: https://www.nasdaqtrader.com/trader.aspx?id=tradehalts#
UPDATED 3-15-23
--Big Foreign Banks about to go BUST--
Credit Suisse - Credit Default Swaps approaching "DISTRESSED" https://finance.yahoo.com/video/credit-suisse-credit-default-swap-181841513.html
--Failed/Taken over by FDIC--
Silvergate Capital - failed 3-8-23
Silicon Valley Bank - failed 3-10-23; purchased by HSBC 3-13-23
Signature Bank - failed 3-12-23; buyer not revealed yet
--Downgraded to JUNK--
First Republic Bank (FRC) - 3-15 Fitch & S&P downgrade https://www.marketwatch.com/story/first-republic-bank-downgraded-to-junk-status-by-s-p-global-ratings-in-four-notch-move-b1d442d4
--Moody's Five Remaining Potential Downgrades from 3-14-23--
Western Alliance Bancorporation (WAL)
Comerica Bank (CM)
UMB Financial (UMBF)
Zions Babncorporation (ZION) - parent of Nevada State Bank
Intrust Financial (Private)
--Others showing liquidity issues--
PacWest Bancorp (PACW)
Customers Bancorp, Inc (CUBI)
East West Bancorp (EWBC)
First Horizon Corporation, Tennessee (FHN)
Metropolitan Bank Holding Corp (MCB)
Regions Financial Corporation (RF)
--Banks seeing liquidity ripple--
Bank of Hawaii (BOH)
KeyCorp (KEY)
United Community Bank (UCBIO)
The Charles Schwab Corporation (SCHW)
Huntington Banc (HBANL)
Magyar Bancorp Inc (MGYR)
Macatawa Bank Corporation (MCBC)
--U.S. Big Six Banks (likely consolidators and possibly owners of Federal Reserve)--
Wells-Fargo Bank - Wachovia Securities is now WF Securities
JP Morgan Chase -
Bank of America - Merrill Lynch is division now
Citigroup
U.S. Bank
Goldman Sachs
--Foreign Players--
HSBC - purchased SVB carcass on 3-13-23
Mitsubishi UFJ Financial Group (MUFG) - strategic partner of Morgan Stanley
Two data points so far:
Similar timeline https://greatawakening.win/p/16aTVIqBwV/2008-financial-crisis-timeline-r/
Similar $620B in paper losses (as of 12/31/22) compared to reported $700B from 2008: https://www.marketwatch.com/story/20-banks-that-are-sitting-on-huge-potential-securities-lossesas-was-svb-c4bbcafa
I believe the actual number is likely closer to $1T right now, and they probably low-balled the number in 2008 [reportedly it was assuming a 5% of all mortgage back securities (MBS) default]t
Losses become real in the cases of forced sale and/or mark-to-market accounting. In the case of SVB they had to do a forced sale of longterm Treasuries that had taken a bath to fund short term capital requirements. After they did this their stock tanked, making it impossible to raise capital with share sale without massive dilution. If the stock price craters enough, a capital raise via equity sale becomes very painful to existing shareholders.
The same longterm investment vs short-term cash needs mismatch caused the 2008 meltdown. ROOT CAUSE is inverted yield curve created by Federal Reserve raising interest rates and cratering economy.
Learn some skills if needed. I setup a woodworking and landscaping side business when my employer threatened to fire me over "jab mandate" including buying all the required tools; And I stuck it in their face with full disclosure about the "side business" that would be operated up to 20 hours a week Friday-Sunday during non-work time. I think they were pissed, but didn't dare retaliate...hehe.
Yea Im worried about this summer. I dont think I will have much work. In 2008 I had a bunch of fed work at the VA and with HUD to keep me afloat while competitors were selling their trucks and equipment. I dont have that cushion this time. The one advantage I have this time though is all my trucks and equipment is paid in full so I dont have a ton of big loans out there.
My guys and girls though I am worried about. If we arent working I cant pay their insurance. Ill try as long as I can. The younger guys with no kids will be fine but I have one girl who just told me she is pregnant with her first. They are like my kids.
Praying for you and your employees that you keep steady work
Why ty friend.
Prayers are with you, fren. It is very hard to re-train to get new skills, but God truly will lead in the right direction if needed. Just pray and be positive, and all needed answers will come to you, believe it or not. You can spike your positivity and "receptiveness" by listening to 432 Hz music or compositions. I prefer classical.
It is my belief that municipal government employees will be safe provided that their department is pulling in revenue, so for example, Building control or Town Planning. If it is HR or Quality management that is the job, that may be in trouble. furthermore, the vanity projects are going to take a haircut.
Agreed, but they cannot fire all of them, just in case ...Certainly the slackers will be weeded out. Productivity data and all.
“ Certainly the slackers will be weeded out”. Hahahaha, maybe in small town building departments! When this happened when I was with the City of Pittsburgh, all employees were AFSCME, and keeping slackers was their raison d’etre!
I wonder if Loop Capital will show up eventually. Q mentioned them a few times back in the day.
Anyone pullin cash ?
I pulled a bunch of cash in early January and dumped it into Silver Eagles. Note that as an individual you may think that you cannot create a bank run, but remember that Reserve Requirement is zero right now, meaning banks are required to hold $0 for every $100 in deposits. This means a few marginal depositors consistently pulling funds can potentially start a run or at the very least screw up bank cash-management algorithms, creating a bit of cascading chaos.
A bit of independent Project Mayhem might be a good thing at this point: https://fightclub.fandom.com/wiki/Project_Mayhem
Have been evey payday for over a decade. Its one way to be disobedient. (can't use my cash for fractional reserve loans).
You say this like it is a GOOD thing. And I love your brash, take no prisoners attitude. I share your approach, and someone who will not compromise on their determined disobedience is one most dangerous to those in power, especially those illegitimately in power. Just imagine when this is 50% of the US population.
What does it mean when a bank is downgraded?
Practically, it means the bank debt is higher risk, so creditors loaning the bank money should expect a higher interest rate on money loaned to it. It also means that the price of credit default swap insurance that can be purchased to protect investors against defaults on bank "investments" or loans issued also goes up.
AAA rating - is top quality rating for corporate debt notes (corporate bonds issued by banks)
Junk - lowest rating and NON investment grade. Many investment companies are NOT ALLOWED to own JUNK rated bonds. So this means automatic liquidation/selling by most gov't entities including Federal and State entities
Bank of America rakes in $15 BILLION as panicked customers ditch smaller lenders for 'too big to fail' firms in wake of SVB crisis - with 'goliaths' like JP Morgan also 'winning', analysts say
https://www.dailymail.co.uk/news/article-11864623/Goliath-winning-Banking-giants-clean-customers-flee-small-lenders-SVB-crisis.html
Looks like Big 6 banks trying to suck up as much capital from small/mid-size banks as possible (with intent of consolidation one way or another). This will work until Credit Suisse and Wells-Frago go down before July 2023 (my projection based on current situation).
What does all this mean?
Recession is already here, fren. We may actually see a very short Depression to push more normies over to the right side of this war.
Thanks this I understand
Haven't figured it out yet. Just tracking what is happening so I can figure it out later. It is hard to figure out what the puzzle looks like with so many moving pieces and dynamic events right now.
The practical benefit of this post is basically to know who to avoid doing business with right now, so you don't get taken down with them.
Thanks for doing this! Sticky for life.
Thank you so much. I am trying to learn as much as possible.