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.
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