thehousingbubble@gmail.com
Blog

When Money Was Very Easy, Everybody Thought That This Was Going To Last Forever So They Did Stupid Things

A report from DS News. “Auction.com, a real estate auction site offering existing and aspiring investors access to (mostly) distressed assets, generated very revealing information about the state of real estate assets throughout 2022. Over the year, buyer behavior began a subtle but dramatic shift. Between the first and third quarters, bidding became much more muted and conservative; buyers set their bids at around an 11% discount on foreclosures in Q1. That discount fell to 23% below the as-is value by Q3. This sign of things to come shows that if the trend continues and the aftershocks of rate hikes extend to the real estate market in toto, we may see a complete slowdown by March 2023.”

Pro Builder. “We are currently in a housing downturn that will likely be followed by a recession. There are a lot of people who feel the housing market will be OK because we’ve been undersupplying the market for so long. While I agree that we’ve undersupplied the market, that viewpoint misses one important point: Look at all of the completed spec homes that don’t have a buyer. If it was as simple as undersupply in the market, why aren’t these finished homes sold? The reason is affordability.”

The Express News in Texas. “Inventory in the local housing market is starting to back up as fewer would-be homebuyers are looking — many sidelined by rising mortgage rates and prices — and homes spend more time on the market. In the San Antonio-New Braunfels metropolitan area, active listings were up 150.4 percent and new listings were up 10.2 percent in February year over year, according to Realtor.com. Among the 50 largest U.S. metros, San Antonio, Austin and Las Vegas were the only ones that saw higher levels of supply compared with typical pre-pandemic levels for February, Realtor.com’s report shows. Nationally, active listings were up a record 67.8 percent.”

“‘The number of homes for sale on the market is up significantly from a year ago, even though fewer homeowners have listed their home for sale in recent months,’ Danielle Hale, chief economist at Realtor.com, said in the report. The median listing price was down 8 percent to $533,000 in the Austin metro. Austin saw the biggest decline in listing prices and the greatest increase in the time homes spent on the market — a median of 72 days, 52 days more than last year — one of the biggest such jumps among metros nationwide.”

KTVB in Idaho. “For the fourth month in a row, the median price of homes sold in Ada County declined year-over-year in February. The February 2023 median sales price was $492,115, according to statistics from Intermountain MLS. The median price in January 2023 was $487,495. In February 2022, it was $549,900. In Canyon County, the median home sales price this past February was $389,945, down almost $6,000 month-to-month. A year earlier, the median price in Canyon County was $434,900. There were 1,039 homes available on the market at the end of February in Ada County, compared to 493 a year ago.”

ABC 30 Fresno in California. “Many sellers have had to reduce their initial asking price because home buyers are being extremely patient. Steve Flach is president of the Fresno Association of Realtors. He’s seeing a return to normalcy with more negotiating. ‘We do see some people waiting on the sideline and the market’s not going to crash so the people that are waiting for the market to crash to make a move, I think they’re going to be missing out on it,’ Flach said.”

From Vizaca. “The Barney Frank scandal is the most accurate example of unthinkable irony. The former Congressman who came up with the Dodd-Frank Act was sitting on the board of the failed Signature Bank. The man who was the scourge of Wall Street, co-author of the Dodd-Frank Act that was supposed to keep the banking system safe, couldn’t prevent his bank from becoming one of the first casualties of the latest bank panic. On Monday, Frank, who had been a board member since 2015, said that he was disappointed in the decision of regulators to shut down Signature Bank.”

“Regulators, he believed, took control of Signature to send a message to other banks to stay away from cryptocurrencies. ‘They shoot one man to encourage the others,’ Mr. Frank said, referring to a saying about using a single military execution to incentivize the subject’s peers to behave differently. He said the same motto applied to the regulators’ handling of Signature. ‘I think we were shot to encourage the others to stay away from crypto,’ said the former Congressman.”

The Detroit Free Press. “You don’t know what you don’t know when Wall Street hits a pothole like this one, especially one involving banking. Comerica had fallen by 40.55% in trading at one point Monday morning but it regained some ground. Comerica closed at $42.54 a share, down 27.67% or $16.27 a share. Huntington Bancshares saw its stock fall 16.83% Monday to close at $11.12 a share, down $2.25 a share. Ally Financial fell 10.73% on Monday and closed at $23.05 a share, down $2.77 a share.”

“Daniil Manaenkov, U.S. forecasting specialist for the U-M Research Seminar in Quantitative Economics, said that some numbers peg potential banking debt portfolio losses from sharply higher rates at around $620 billion, based on FDIC data. He blamed much of the problem on economic policy during the COVID-19 pandemic. ‘Too much money injected into the economy simultaneously increased deposits, drove short-term rates to zero, and reduced demand for loans. So, banks just did a ton more of the ‘maturity transformation’  — borrowing short, investing long,’ Manaenkov said.”

Yahoo Finance. “First Republic Bank  shares fell a record 62% on Monday to close at $31.21 each, despite measures by U.S. regulators to shore up confidence in the banking system following the collapse of Silicon Valley Bank. First Republic and other regional lenders’ stocks were repeatedly halted for volatility during the trading session amid fears of a bank contagion. Western Alliance’s shares fell 47%, while PacWest Bancorp and Zions Bank Corporation close off their session lows, down 21% and 25% respectively.”

“‘Risk and fear are still very much alive in this marketplace,’ David Ellison of Hennessy Large Cap Financial told Yahoo Finance Live. ‘The electronic nature of the banking system now, people can move money out very rapidly. This isn’t people lined outside looking to get 20 dollars out. This is people calling, going on the Internet, and pulling out millions of dollars very quickly. So this liquidity issue is bigger than the Fed ever expected.'”

From Bloomberg. “First Horizon Corp. fell by the most since September 2008 as the crisis in regional banks cast doubt on whether Toronto-Dominion Bank will follow through with its planned $13.4 billion takeover of the lender. First Horizon declined as much as 33% Monday morning and was briefly halted due to volatility. The stock pared losses but still ended the day down 20% at $16.04. That’s about 36% below TD’s takeover offer. ‘With a walk date in May looming and bank stocks imploding, the question is will TD walk away or ask for a massive cut?’ said Cabot Henderson, who focuses on merger arbitrage and special situations at JonesTrading. ‘Things are so fluid and with downside seemingly getting scarier by the minute, it’s extremely hard to have any conviction.'”

“Adding to the complexity is the slump in Toronto-Dominion shares and in Charles Schwab Corp., which has fallen 32% since Wednesday. The Canadian bank owns about 10% of Schwab’s voting stock, according to data compiled by Bloomberg, and it has sold Schwab shares in the past as an easy way to raise capital.”

KING in Washington. “‘There’s a bit of reckoning happening at the business level with the tech industry,’ said Hanson Hosein, who has spent years consulting and also serves as the president of HRH Media. ‘They got too confident and now there’s a lot of pull back and it’s affecting this specific industry. Because we live in Seattle and the West Coast, we’re disproportionately impacted as they employ so many of our people here.’ ‘About 50% of all venture capital is financed by, one way or another, by the SVB,’ said Seattle University Economist, Vladimir Dashkeev.”

The Washington Examiner. “Shares of San Francisco-based First Republic Bank plunged by more than 73% after opening but have pared those losses a bit. At the heart of Silicon Valley Bank’s demise are the Federal Reserve’s policy actions. Desmond Lachman, a senior fellow at American Enterprise Institute, said the Fed created a ‘huge mess’ by being too easy with its monetary policy in the wake of the pandemic. During that time, the Fed slashed interest rates to near-zero levels and kept them that low until the beginning of last year. Since then, rates have soared as Fed officials grew ever more concerned about inflation proving stubbornly high.”

“‘When money was very easy, everybody thought that this was going to last forever so they did stupid things. Now what is going on is the Fed is having to raise interest rates because it’s got to fight the inflation,’ Lachman told the Washington Examiner.”

The Los Angeles Times. “The fact that SVB’s problems were hiding in plain sight, right up to the point Friday when the bank was taken over and shut down by California and federal authorities, is certain to be near the top of the agenda as lawmakers, shareholders, customers and regulators examine the disaster. As the bank’s primary regulator, it was the Federal Reserve’s responsibility to recognize its growing problems and ensure it continued to meet standards of safety and soundness and financial stability, says Dennis Kelleher, chief executive of Better Markets, a Washington-based watchdog over financial institutions and government regulators.”

“The bank’s operations bristled with ‘screaming red flags,’ Kelleher told me. These included a ‘hyperconcentration’ of uninsured depositors from a narrow business sector — chiefly high-tech and biotech startups — as well as a dramatic mismatch between assets (that is, loans and investments) and liabilities (deposits) and the mounting tide of unrealized losses on its books. ‘These were visible to anyone who wanted to look,’ Kelleher told me. ‘But apparently, the Fed was AWOL.'”

“Kelleher observes that the Fed’s policy of pegging interest rates near zero during the pandemic ‘was causing bubbles all over the place and reckless lending.’ The Fed staged an unprecedented about-face on interest rates starting in March 2022 — raising rates by 4.5 percentage points in the space of nine months. ‘Banks were not going to be able to reposition their portfolios anywhere near as quickly as the Fed is changing policy.'”

“That behooved the Fed to take a close look at all the banks. Kelleher says that Fed examiners should have demanded a plan last year from SVB’s management or board for unwinding its large and growing impairment. It did not do so. Another red flag for regulators should have been the bank’s rapid growth, which almost certainly placed pressure on management skills in the corporate suite.”

“The Fed wasn’t the only entity that allowed the scale of SVB’s problems to go unremarked. Questions are sure to be raised about the performance of the bank’s auditing firm, KPMG. The firm issued a clean bill of health for the bank, known as an ‘unqualified’ opinion, with the bank’s annual report, released on Feb. 24. KPMG hinted that it was concerned about the bank’s method for projecting credit losses on some of its loans, but didn’t rule them as improper. Instead, it designated the method a ‘critical audit matter,’ which typically refers to issues that are “especially challenging, subjective, or complex” but don’t warrant a warning about a company’s prospects for failure.”

Market Insider. “The Fed will investigate its oversight of Silicon Valley Bank, Chairman Jerome Powell said Monday. ‘The events surrounding Silicon Valley Bank demand a thorough, transparent, and swift review by the Federal Reserve.’ Tim Gramatovich, chief investment officer at Gateway Capital, told Insider that even though the Fed has been raising interest rates for a year, it was as if a higher-interest-rate landscape came as a surprise for SVB. ‘For a $200 billion bank to have no interest rate risk controls is staggering,’ he said. ‘And of course the regulators and rating agencies are allegedly engaged here too. Doing what, we aren’t sure.'”

Related Posts
This Post Has 128 Comments

    2. Old white men would no longer be among that demographic. Good music production though!

    3. These same clowns closed Trumps accounts after the January 6th Capitol Police Obedience to the Democratic Party Rally.

  2. This bank crater is making my reading list double in the morning right now, so I’m running late.

    ‘For a $200 billion bank to have no interest rate risk controls is staggering,’ he said. ‘And of course the regulators and rating agencies are allegedly engaged here too. Doing what, we aren’t sure.’

    When as the last time a central banker or auditor or rating agency actually preventing something from cracking up?

    1. Are you seeing anything about the expected impact on mortgages? I would assume banks are holding onto capital and having trouble selling MBS.

      1. 1. The Fed’s bazooka aimed at bank balance sheets reduces pressure for banks to sell bonds to raise cash. This favors lower rates.

        2. Flight to quality into bonds favors lower rates.

        3. Continued inflation near 6% favors ongoing Fed rate hikes.

        How this all settles out is anyone’s guess.

        1. Continued inflation near 6%

          Consider that “6%” is not “inflation” at all. It’s the hedonistically adjusted and otherwise manipulated Core Consumer Price Index which excludes food and energy. Playing along with the banking cartel’s narrative that the above is abbreviated as “inflation” leads to wrong conclusions.

          I emphasize the distinction because higher interest rates are definitely not intended to reduce our (us little people) cost of living. Quite the contrary.

          1. Based on CR8Ring housing prices and rents, it seems like inflation reduction is working great!

          2. inflation reduction is working great!

            The price of a house isn’t even in the number you put forward as “inflation”.

          3. Housing Market in ‘Tug of War’ as Prices Continue to Drop Across U.S.
            BY GIULIA CARBONARO ON 3/12/23 AT 3:00 AM EDT
            NEWS HOUSING HOUSING MARKET HOUSE PRICES U.S. ECONOMY
            By mid-2022, as mortgage rates suddenly more than doubled, most housing experts predicted that the booming market would finally cool down, after two years of high demand, skyrocketing home prices, and low inventory heated up the market so much that many aspiring buyers found homes simply unaffordable.

            Now nine months later, that prediction has widely come true: Home price gains have been weakening every month since last summer, with the average home price nationwide now down six percent from its June peak as sales have dropped, according to S&P Case-Shiller index of prices in 20 major metro areas.

            But despite an improvement in affordability, home prices remain higher than they were this time a year ago. And as demand starts coming back, a continued decline in prices seems less than certain.
            …
            https://www.newsweek.com/housing-market-tug-war-prices-continue-drop-across-us-1786356

          4. Real Estate
            Published March 13, 2023 12:23pm EDT
            Rent growth had smallest gain in two years: Redfin
            Due to inflation, landlords aren’t dropping prices but they ‘may seek to lure renters with other concessions’
            By Daniella Genovese FOXBusiness
            Near 30-year mortgage demand low is part of a ‘weird’ real estate market standoff: Mauricio Umansky

            Renters might just be getting some relief as February marked the ninth consecutive month in which rent growth slowed.

            Last month, the median U.S. asking rent rose to a mere 1.7% year over year to $1,937, according to the latest data from Redfin. This marked the “smallest increase in nearly two years and the lowest level in a year,” the technology-powered real estate agency reported.

            Rising rents haven’t slowed as much as expected “in part because the labor market has held up better than anticipated, which has helped prop up demand,” Redfin Deputy Chief Economist Taylor Marr said in a statement.

            Rents are up 16.5% from a year ago, the data showed. That’s nearly a ten-fold jump from last month’s rise.
            …
            https://www.foxbusiness.com/lifestyle/rent-growth-posts-smallest-increase-two-years-redfin

          5. “Last month, the median U.S. asking rent rose to a mere 1.7% year over year to $1,937, according to the latest data from Redfin.”

            Sounds like falling rents are just around the corner. Can’t wait!

        2. The Fed will be forced to surrender on rate hikes after SVB’s failure, says top economist Mohamed El-Erian
          Zahra Tayeb Mar 13, 2023, 8:32 AM
          – “The immediate move in 2-year bonds points to the view that, by treating this as a systemic threat, the #Fed will also retreat from its #inflation battle,” the top economist said.
          – SVB’s collapse is seen as a byproduct of the Fed’s jumbo rate hikes over the past year.

          The Federal Reserve will be forced to give up its aggressive monetary policy after Silicon Valley Bank’s meltdown, according to Mohamed El-Erian.

          The chief economic adviser at Allianz pointed to plunging US bond yields as a key sign the central bank could halt its interest-rate increases aimed at cooling inflation.

          “With the US #SVB-related bailout going beyond what many expected, markets see it as more than protecting deposits and small #tech,” El-Erian said in a Monday tweet.

          “The immediate move in 2-year bonds points to the view that, by treating this as a systemic threat, the #Fed will also retreat from its #inflation battle,” he added.

          Financial markets are in turmoil after the Santa Clara-based Silicon Valley Bank (SVB) was shut down on Friday. Federal regulators then announced Sunday that they would bail out the bank’s customers. The collapse was a byproduct of the Fed’s fastest interest-rate increases since the 1980s, a botched fundraising plan by SVB and a subsequent rush of depositors to withdraw their money.

          SVB’s dramatic implosion showed that the Fed’s jumbo rate-hike campaign could destabilize even institutions that were once thought to be relatively stable.

          Given that, investors are now anticipating the Fed to temper its hawkish monetary policy stance to prevent further damage to the financial system. On Monday, such expectations fueled the sharpest slide in the 2-year Treasury yield since the financial crisis of 2008.

          The yield on the 2-year Treasury note slid about 45 basis points to 4.214% at last check on Monday – its lowest level since February 3.

          “This roller coaster yield curve is a reflection of economic, financial and policy volatility which, looking forward, will need time to settle down,” El-Erian said in a later tweet.
          …
          https://news.yahoo.com/fed-forced-surrender-rate-hikes-123211250.html

          1. The risk asset HODLers will be disappointed upon learning of Mr Market’s interpretation of the Fed’s rate hikes surrender as a financial storm warning.

        4. “And as demand starts coming back, a continued decline in prices seems less than certain.”

          With interest rates chasing up inflation and tech industry workers hitting the unemployment line in droves, where exactly will this renewed demand originate?

          1. Fast Money
            ‘Stress like 1987’: Evercore’s Julian Emanuel warns Silicon Valley Bank fallout could force new market low
            Published Mon, Mar 13 2023 8:34 PM EDT
            Updated Mon, Mar 13 2023 8:51 PM EDT
            Stephanie Landsman
            Stress like it’s 1987: Evercore’s Julian Emanuel questions why rate hikes are still on the table

            Evercore ISI is comparing the bank stress to another critical time on Wall Street: The year of the savings and loan crisis and epic crash.

            “To think you would see financial stress of this kind develop in the system 24 hours after [Fed] chair Powell suggested he may go 50 [basis points] on the 22nd, just tells you how extremely uncertain the environment is,” the firm’s senior managing director Julian Emanuel told CNBC’s “Fast Money” on Monday.

            In a note out Monday, Emanuel highlighted a striking comparison to the 2-year Treasury Note yield plunge in the aftermath of Friday’s Silicon Valley Bank collapse and 1987.

            He noted the three-day rate of change in the 2-year yield fell from the 5.08% peak to a recent “trough” of 3.99%.

            “This decline is one of the most rapid on record only rivalled by 1987, when Greenspan introduced the ‘Fed Put’ affirming provision of ‘unlimited’ liquidity and cutting rates 75bp in and around the Crash of 1987,” he wrote on Monday to clients.

            Emanuel suggests more problems are lurking — especially if the Federal Reserve continues hiking interest rates.

            “If what we’ve seen is the first shot across the bow in terms of the effect of tightening, we are going to have a recession,” he told CNBC’s Melissa Lee and the traders.

            His forecast calls for a mild recession and retest of last October’s market low.

            “Part of the end game is we do want to see enough of a downturn to make stocks attractive,” said Emanuel. “But we’re still a ways from that.”
            …
            https://www.cnbc.com/2023/03/13/stress-like-1987-evercore-warns-svb-fallout-will-force-new-market-low.html

    2. When as the last time a central banker or auditor or rating agency actually preventing something from cracking up?

      I found out yesterday from your list of bad banks that mine is one of them! They merged, or were taken over, earlier this month with Columbia Bank. I had never heard of Columbia Bank, but apparently they’re reckless filth. I have downloaded all my checking and savings statements. Think I’ll get a big fat cashier’s check later this week and put it somewhere else.

        2. Aristophanes‘s play Plutus, about the Greek God of wealth and fortune, was blinded by Zeus, so that Plutus would distribute wealth without prejudice. When his sight was restored, he distributed wealth to the deserving and chaos ensued. Even the Greeks knew that wealth and fortune were often random, and without the luck of the gods passing it out, no amount of hard work was going to make you rich.

          I often think about this when I look at my healthy, but modest balance sheet at this stage in middle-age. I ask myself why I didn’t get the big promotion, or come up with some great idea to make millions, or bring in some big client or customer, or roommate with a CEO’s son in college. Hard work and great ideas only get you so far. It is The randomness of wealth that the blind god Plutus hands out to those who are undeserving….

          1. I ask myself why

            Snap out of it surfy guy. I got big promotions, and then got fired or quit. I said “no” too often. I came up with great ideas, made millions for my company or saved a bunch of lives. I brought in more than one big customer and gave them a fair return, but it didn’t make me rich. I made friends, some of them were hollow, but some of them were true. My college roommate didn’t have connections but we are still best friends.

            You say you’re in the middle. I’ve already had my three score and ten. I say don’t wish for undeserved riches, look for fulness. Take adventures and help others. You’ll never regret it.

            You might do like me and pause every once in a while to thank the Lord that he doesn’t give you what you deserve!

            I’ve had a day, and a dram. Best of luck to you.

          2. I say don’t wish for undeserved riches, look for fulness. Take adventures and help others. You’ll never regret it.

            +1

  3. Is all well once again, now that the underwater bank balance sheet crisis, along with inflation, is contained?

    1. The Financial Times
      FT Alphaville US banks
      Not all right says FRED
      Wildly prescient St Louis Fed blog on bank bond investments
      Robin Wigglesworth March 10 2023

      We’re going to blame the Federal Reserve system’s inexplicable inability to gather all its disparate research output in one place, but here is a very timely St Louis Fed paper that we missed last month.

      Rising Interest Rates Complicate Banks’ Investment Portfolios:

      “While rising interest rates give banks opportunities to increase earnings by pushing up rates charged on loans, they also could increase the cost of liabilities and decrease the value of investment securities held as assets. Even unrealized losses — paper losses — in investment portfolios can have negative effects on liquidity and present funding challenges, earnings pressures and, in some cases, issues with capital.”

      Sounds familiar? Silicon Valley Bank’s $1.8bn bond loss and $2.5bn cap raise has sparked jitters across the global banking complex this week, with financial stocks getting pummelled everywhere.

      The St Louis Fed blog post by Carl White — part of a broader series titled Supervising Our Nation’s Financial Institutions — points out that roughly 20 per cent of bank assets consisted of bonds (mostly MBS and Treasuries). By the end of 2021, security holdings had climbed to 25 per cent of assets.

      Most of the increase was driven by Treasury purchases, and especially longer-maturity Treasuries, which suffer more when rates rise. Which, as many people will have noticed, they did last year.

      Banks have to put bonds in two classification buckets: held-for-maturity and available-for-sale. The difference between the cost of AFS securities and their current market value is recorded as “accumulated other comprehensive income”, which is subtracted from equity capital on a bank’s balance sheet — and therefore affects a bank’s tangible common equity.

      From the blog, with our emphasis below:

      “TCE is declining industrywide because of the negative effect of rising rates on the market value of bank holdings of AFS securities. The number of banks with ratios of TCE to average tangible assets of less than 5% jumped markedly in 2022, with some banks posting negative TCE. Banks in this position largely got there because of an aggressive earnings strategy based on longer-term securities holdings when interest rates were low.

      Banks with very low or negative TCE may face funding challenges. Federal Home Loan Banks (FHLBs), for example, are not permitted to extend new loans (called advances) to banks with negative TCE, and existing FHLB loans may not be renewed beyond 30 days unless waivers are obtained by borrowers’ primary regulators. That could be problematic for banks facing a runoff in deposits or other liquidity concerns; in a worse-case scenario, a bank might have to sell ‘underwater’ bonds to raise cash, thus realizing losses and reducing regulatory capital.”

      How widespread could this issue be, and how deep? Goldman Sachs says not much. We have no clue, but look forward to finding out.
      …

      1. “Banks in this position largely got there because of an aggressive earnings strategy based on longer-term securities holdings when interest rates were low.”

        Cockroach Theory suggests alot more US banks are in a similar financial position to SVB’s last week, just before it imploded. But not to worry, as the Fed has a big bazooka aimed squarely at the banking sector. Never mind the Fed’s own devalued multi-trillion dollar bond portfolio.

    2. The Financial Times
      US inflation
      US consumer prices rise 6% at tricky time for Fed amid SVB fallout
      Data comes as central bank contends with broader concerns about how rising rates have affected lenders
      Jay Powell
      Federal Reserve chair Jay Powell told the US Congress earlier this month that the Fed would respond more aggressively to raise rates if the data suggested a sustained rebound in economic momentum
      Colby Smith in Washington an hour ago

      US inflation remained hot enough to further complicate the path forward for the Federal Reserve as it contends with three bank failures and broader concerns about financial stability.

      The consumer price index rose 6 per cent year on year in February, following a 0.4 per cent increase from the prior month. That is a step down from the annual 6.4 per cent pace registered during January, though still elevated.

      Stripping out volatile food and energy prices, “core” CPI climbed another 0.5 per cent in February, matching the previous month’s increase and slightly higher than the 0.4 per cent monthly increase economists had expected. On an annual basis, it rose 5.5 per cent, only 0.1 percentage points less than January’s year on year pace.
      …

      1. ‘Stripping out volatile food and energy prices, “core” CPI climbed another 0.5 per cent in February, matching the previous month’s increase…’

        So core inflation is running at an annualized rate of (1+0.005)^12-1 = 6.2%, above the year-on-year rate of 5.5%, an acceleration.

        I wonder why those ostriches are partying over on Wall Street, because it looks to me like there is more CR8R ahead.

  4. Questions are sure to be raised about the performance of the bank’s auditing firm, KPMG. The firm issued a clean bill of health for the bank, known as an ‘unqualified’ opinion, with the bank’s annual report, released on Feb. 24. KPMG hinted that it was concerned about the bank’s method for projecting credit losses on some of its loans, but didn’t rule them as improper’

    In this way auditors serve to white wash problems. Isn’t that lovely?

    1. Who pays those auditors, and how would they feel if the aiditor provided a bad health report?

    3. In this way auditors serve to white wash problems.
      My former boss, who worked for a big 4 accounting firm before becoming the CFO, used to refer to Big 4 auditors, including himself, as Prostitutes in Pinstripes

  5. 𝗦𝗮𝗻𝘁𝗮 𝗥𝗼𝘀𝗮, 𝗖𝗔 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗖𝗿𝗮𝘁𝗲𝗿 𝟭𝟴% 𝗬𝗢𝗬 𝗔𝘀 𝗦𝗼𝗻𝗼𝗺𝗮 𝗖𝗼𝘂𝗻𝘁𝘆 𝗦𝘁𝗮𝗴𝗴𝗲𝗿𝘀 𝗢𝗻 𝗦𝗼𝗮𝗿𝗶𝗻𝗴 𝗖𝗿𝗶𝗺𝗲 𝗔𝗻𝗱 𝗠𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗙𝗿𝗮𝘂𝗱

    https://www.movoto.com/ca/95405/market-trends/

    As a national land broker explained, “If you paid more than $500 an acre, you got ripped off.”

  6. They shoot one man to encourage the others,’Mr. Frank said, referring to a saying about using a single military execution to incentivize the subject’s peers to behave differently. He said the same motto applied to the regulators’ handling of Signature. ‘I think we were shot to encourage the others to stay away from crypto,’

    They are imaginary assets Barney. Go get one out of yer vault and show it to us. Sound lending!

    1. They are imaginary assets Barney. Go get one out of yer vault and show it to us. Sound lending!

      And now these electronic tulips are shooting the moon. I don’t get it.

      2. Based on the perception the Fed’s priorities just shifted from inflation control to financial stability. Bailouts are good for risk asset prices, like crypto.

  7. ‘In the San Antonio-New Braunfels metropolitan area, active listings were up 150.4 percent and new listings were up 10.2 percent in February year over year, according to Realtor.com. Among the 50 largest U.S. metros, San Antonio, Austin and Las Vegas were the only ones that saw higher levels of supply compared with typical pre-pandemic levels for February, Realtor.com’s report shows. Nationally, active listings were up a record 67.8 percent’

    A record? Wa happened to my shortage used shack salespeople?

    1. But…but…the UHSs assured us buyers were just waiting on the sidelines ready to rush in as soon as more inventory appeared.

  8. ‘Over the year, buyer behavior began a subtle but dramatic shift. Between the first and third quarters, bidding became much more muted and conservative; buyers set their bids at around an 11% discount on foreclosures in Q1. That discount fell to 23% below the as-is value by Q3. This sign of things to come shows that if the trend continues and the aftershocks of rate hikes extend to the real estate market in toto, we may see a complete slowdown by March 2023’

    You won’t get any closer to rubber and the road than this. Auction.com has everything digitally automated. They know right now what happened last week. So they are playing games by talking about March 2023. It’s an auction site, fairly efficient. But when it comes to their press releases they are just another REIC sh$thouse looking to cash in via mergers/buyouts like the rest of the steaming piles.

  9. ‘some numbers peg potential banking debt portfolio losses from sharply higher rates at around $620 billion, based on FDIC data’

    Bank of America has 109B of these bad boys.

    ‘He blamed much of the problem on economic policy during the COVID-19 pandemic. ‘Too much money injected into the economy simultaneously increased deposits, drove short-term rates to zero, and reduced demand for loans. So, banks just did a ton more of the ‘maturity transformation’ — borrowing short, investing long’

    You mean it’s gonna be worser?

    1. “Times Are Hard”
      No they are not, things are pretty d@mn good for me but thanks for “sharing.”

    1. “Earlier in February, award-winning residential construction company Delco Building Group in Victoria went under owing $780,000 to 50 creditors.”

      What was their award owing the most Lobsters and Pineapples to their subs and suppliers?

      AUD: Explaining Australian Dollars

      Notes
      Australia produced the world’s first polymer plastic banknotes in 1988, featuring a transparent ‘window’ as an anti-counterfeit device. AUD notes are offered in denominations of $5, $10, $20, $50 and $100, each with a colourful design that celebrates a series of iconic Australians, and cleverly, increasing in size depending on their value.

      $20

      A lobster buys you the meal that’s keeping millennial Australians out of the overheated housing market — the much maligned smashed avocado — or a decent meal at a pub. For backpackers, hostels at the very low end of the price range begin at about 20 bucks a night.

      $50

      A pineapple starts to buy visitors some serious experiences: two tickets to a game of footy, a couple of hours on a stand-up paddle board or a kayak, or an adult entry to Australia Zoo near Brisbane.

      https://theculturetrip.com/pacific/australia/articles/aud-explaining-australian-dollars/

    3. slight correction- Silicon Valley investors in SIVB own nothing. I’m quite happy buying J Pow’s 5%ers all day long.

    1. “Meta staff bloodbath continues as Zuckerberg confirms another 10,000 layoffs – 13% of its remaining staff – as he warns ‘new economic reality will continue for many years’“

      Wow, that’s some crystal ball.

  15. US was double billed tens of millions of dollars in grants to Wuhan labs: report

    By Josh Christenson
    March 13, 2023 4:32pm

    The US government may have paid twice for grants it doled out to fund research at labs in Wuhan, China, according to a newly launched federal probe that found tens of millions of dollars in potentially fraudulent payments.

    The “risky” projects bankrolled by the National Institutes of Health and the US Agency for International Development would have helped pay for medical supplies, equipment, travel expenses and salaries at the Wuhan labs, according to CBS News, which broke the story Monday.

    Among them was the Wuhan Institute of Virology, where taxpayers funded controversial gain-of-function research on bat coronaviruses that federal officials now admit may have led to the COVID-19 pandemic.

    An investigator hired by Sen. Roger Marshall (R-Kan.) first discovered the allegedly fraudulent funding from NIH and USAID, CBS News reported, and her findings prompted an internal probe by an inspector general.

    “What I’ve found so far is evidence that points to double billing, potential theft of government funds,” Diane Cutler, who said she reviewed 50,000 documents on the matter, told “CBS News Mornings.”

    https://nypost.com/2023/03/13/tens-of-millions-of-dollars-in-us-grants-went-to-wuhan-labs/

  16. SHUT. IT. DOWN.

    Sen. Mark Kelly Wanted Social Media Censorship to Prevent Bank Runs (3/13/2023):

    “Rep. Thomas Massie (R-KY) confirmed Kelly’s identity from among 200 participants on the Zoom call. After the conference call, he wrote, “Just got off of a zoom meeting with Fed, Treasury, FDIC, House, and Senate. A Democrat Senator essentially asked whether there was a program in place to censor information on social media that could lead to a run on the banks.”

    Massie also wrote that Kelly suggested “that government should work with social media companies to censor information that could lead to a run on banks.”

    https://www.breitbart.com/economy/2023/03/13/sen-mark-kelly-wanted-social-media-censorship-prevent-bank-runs/

    1. “I didn’t realize it was bank collapse season already. I still have my train derailment decorations up!”

      lmao

    1. BTFP The Latest Bank Bailout
      By Michael Lebowitz and Lance Roberts | March 14, 2023

      On Sunday afternoon, the Fed and Treasury rode the rescue with the Bank Term Funding program, BTFP, the latest bank bailout. The government staring at potential bank runs shored up banks and helped comfort depositors that their money is safe. The facility will save some banks from selling underwater bonds and taking losses in order to free up cash for depositors. Consequently, participating banks can pledge eligible bonds to the BTFP facility and receive a one-year loan for the bond’s par value. The facility only applies to U.S. banks and bonds owned before the announcement. Some banks may be unable to take advantage of the program as they do not hold a measurable amount of Treasuries or MBS. The BTFP program will last for one year.

      Now, our two cents and what this means from a macroeconomic perspective. For starters, the Fed may have more leeway to raise rates as most banks are protected against being forced to take losses and raise capital. Counter to the argument, lending standards will increase significantly, which will drag on economic activity and do the Fed’s heavy lifting. Further, tightening standards will put those companies most heavily reliant on bank funding at risk.

      Some believe BTFP opens the door for a Fed pivot. With the battle against high inflation still in progress we are not sold the Fed will give up the fight so early. We will learn a lot more about the program at next week’s FOMC meeting.
      …
      https://realinvestmentadvice.com/btfp-the-latest-bank-bailout/

  19. A reader sent these in:

    FDIC unveils new sign

    https://twitter.com/zerohedge/status/1635062367431139330

    The reason for the limits on deposit insurance is that larger depositors were supposed to be sophisticated enough to do due diligence when choosing a bank and suffer the consequences if they chose one that took on too much risk. Covering all deposits expands the moral hazard.

    https://twitter.com/PeterSchiff/status/1635089929956130817

    Danielle DiMartino Booth

    The private sector begins to choose winners & losers.
    “The infusion is the first such lifeline for a collection of midsize banks that have run into trouble in the past week.”

    https://twitter.com/DiMartinoBooth/status/1635106004043190272

    bond investors in March: “no interest rate risk? imma buy a crap ton of Treasuries”
    bond investors in April: “what do you mean rate hikes are still on the table?”

    https://twitter.com/concodanomics/status/1635269352017768453

    Sure grandma, let’s get you to bed…

    https://twitter.com/INArteCarloDoss/status/1635291336923566084

    Jesus Christ. You hit it out of the ballpark on this one. “When interest rates are zero, people do stupid things.” My paraphrase. It SHOULD cost you money to borrow. There should be risks in lending. There is nothing wrong with rates at 5%. That means are prudent with your money!

    https://twitter.com/TClash2022/status/1635435848215691264

    Fannie Mae Delays Risky Mortgage Bond Sale Amid Market Unrest
    Government-backed home loan company Fannie Mae has postponed the sale of more than $500 million of mortgage-linked bonds as the market absorbs the collapse of California’s Silicon Valley Bank

    https://twitter.com/danjmcnamara/status/1635324993646260224

    YELLEN: IT’S NOT A BAILOUT UNLESS IT COMES FROM THE BAILE REGION IN FRANCE. IN THIS CASE IT’S A SPARKLING GOVERNMENT INTERVENTION.

    https://twitter.com/KlendathuCap/status/1635360261858267137

    For those catching up
    – inflation is 3x target
    – jobs are booming
    – wages are soaring
    – gdp is ripping
    – home prices barely budged
    – stocks are on a tear
    But – a few VCs on Friday were worried they won’t be bailed out by Monday
    So now rate cuts? Just start learning Mandarin.

    https://twitter.com/StephenPunwasi/status/1635381459824566278

    Virtually all evidence shows ZIRP is a driver of inequality, helping to inflate the assets of those that have them & extending more debt for those looking for basic shelter. Clearly after demonstrating there’s no risk for the uber rich, we should get back to ZIRP ASAP.

    https://twitter.com/StephenPunwasi/status/1635386570315534339

    Discussing Fed’s tradeoff between inflation fighting and financial stability. Past pivots occurred with benign inflation backdrops, which allowed the Fed to prioritize financial market stability.

    https://twitter.com/CameronDawson/status/1635362587369168896

    NSW nurses have deeply negative real wages growth and face unaffordable housing. Its shocking that nurses don’t want to spend an 1+ hour commuting to an overpriced home after doing a double shift for a pay packet that buys less and less.

    https://twitter.com/AvidCommentator/status/1635206339394953218

    CarDealershipGuy

    What you see: 500 credit score
    What I see: 21% interest rate

    https://twitter.com/GuyDealership/status/1634949976991371265

    Crypto collapsed two banks so far: Silvergate and Signature.

    Tech stocks imploded one bank so far: SVB.

    Now the locus of collapse is commercial real estate:
    https://therealdeal.com/la/2023/03/13/west-coast-commercial-lenders-feel-fallout-from-svb-collapse/
    “West Coast lenders with large commercial real estate loan portfolios are feeling the pain”

    https://twitter.com/SuburbanDrone/status/1635392403887771648

    To avoid having Neighbour’s like this in Sydney you need to pay more than $3 million for a property. Anything less you risk this. Don’t be cheap.

    https://twitter.com/RBASHAGGER/status/1634762714806616064

    (1/6) The median U.S. rent price dropped to $1,937 in February—the lowest level in a year. Rent prices continue to cool amid economic uncertainty, still-high rental costs, and a rise in apartment construction.

    https://twitter.com/Redfin/status/1635327212290445313

    Signature is a major CRE lender in New York. This is a real estate story.
    Funds may be less *available* for acquisitions. This is what I am watching for.

    https://twitter.com/Cribdilla/status/1635048842457681920

    BREAKING: The US system of Federal Home Loan Banks, a key source of cash for regional banks, is seeking to raise about $64 billion through the sale of short-term notes, per Bloomberg.

    https://twitter.com/unusual_whales/status/1635315673751756801

    You don’t see that every day. Wowza

    https://twitter.com/HedgeyeFIG/status/1635282015754022915

    They sure do.

    https://twitter.com/AyeshaTariq/status/1635333235193544705

    Hearing First Republic Bank downgraded to Neutral from Buy at Compass Point; tgt lowered to $130 $FRC … I don’t know whether I should laugh or cry. 🤦‍♀️🙄

    https://twitter.com/AyeshaTariq/status/1635287839637389313

    Drop in 2y Treasury yields among biggest in decades as nervousness around banking sector prompted investors to scale back Fed hike bets. US 2y yields plunged 0.57ppts, on track for its biggest 1d drop since Oct 20, 1987 — session after Black Mon crash.

    https://twitter.com/Schuldensuehner/status/1635381101559701506

    Uninsured deposits range from 37-59% of total deposits at most of US banks vs 90% at SVB & Signature. BofA, Regions, Wells Fargo had lowest share of uninsured deposits at 37% each. Citi had highest share of uninsured dep at 85% given institutional focused deposit franchise. (JPM)

    https://twitter.com/Schuldensuehner/status/1635377413743075333

    Not all regional banks are built equal “Crazy Woman Creek Bancorp” in Buffalo, Wyoming is holding steady

    https://twitter.com/ParikPatelCFA/status/1635322290144698368

    2. War pigs gonna pig:

      “The Pentagon on Monday unveiled details of its $842 billion budget request that officials say keeps the focus on countering China. But it also reflects the realization, driven by the war in Ukraine, that the department needs to start doing business differently to make sure it’s ready for a direct conflict.

      Russia’s invasion of Ukraine revealed a vulnerability in America’s military-industrial base as arms makers struggled to keep up with the massive new demand for missiles and ammunition.

      For the first time, the Defense Department is asking Congress to fund multi-year purchases of these weapons, instead of placing orders annually, in a move officials hope will help kick production into higher gear for a future fight.”

      https://www.politico.com/news/2023/03/13/pentagon-weapons-budget-dod-ukraine-00086766

      $842 billion is that a lot?

      All The Right People will get paid, must get paid. And anyone in Congress who votes against will get primary challengers funded by The Right People.

      These aren’t some WWII “dollar a year” people putting country first for an alleged noble cause, they are blood sucking parasites.

      Zelensky is a war criminal.

  21. The high cost of AI is a result of its computing requirements — every time an AI returns a response to a prompt, it performs billions of calculations in its mission to deliver a useful answer.

    https://www.breitbart.com/tech/2023/03/13/startups-struggle-to-meet-massive-costs-of-ai/

    WHOAhhhhh
    , “Sen. Elizabeth Warren (D-MA) has attributed this to the rollback of regulations in 2018 under the Trump administration, do you agree with that?”

    https://www.breitbart.com/clips/2023/03/14/waters-i-cant-say-trump-rollbacks-caused-svb-collapse-its-too-early-and-they-were-invested-in-a-lot-of-startups/

  22. $2,220,000 2 bd 3ba 2,200 sqft
    Price cut: $75K (3/13)
    900 W Olympic Blvd #47F, Los Angeles, CA 90015

    https://www.zillow.com/homedetails/900-W-Olympic-Blvd-47F-Los-Angeles-CA-90015/119638679_zpid/

    Date Event Price
    3/13/2023 Price change $2,220,000-3.3%$1,009/sqft

    2/20/2023 Price change $2,295,000-4.2%$1,043/sqft

    1/5/2023 Listed for sale $2,395,000$1,089/sqft

    12/29/2022 Listing removed —

    7/5/2022 Listed for sale $2,395,000+6.5%$1,089/sqft

    6/7/2022 Listing removed —

    2/21/2022 Listed for sale $2,249,000-2%$1,022/sqft

    12/29/2021 Listing removed —

    10/8/2021 Price change $2,295,000-8%$1,043/sqft

    8/18/2021 Listed for sale $2,495,000$1,134/sqft

    8/13/2021 Listing removed —

    6/16/2021 Listed for sale $2,495,000-7.4%$1,134/sqft

    10/29/2020 Listing removed $2,695,000$1,225/sqft

    7/21/2020 Listed for sale $2,695,000$1,225/sqft

  23. COVID-19 could have been the result of risky experiments at a laboratory in China, Dr. Anthony Fauci acknowledged in an interview over the weekend.

    “A lab leak could be that someone was out in the wild maybe looking for different types of viruses in bats, got infected, went into a lab, and was being studied in a lab, and then came out of the lab,” said Fauci, the former director of the U.S. National Institute of Allergy and Infectious Diseases (NIAID). “The other possibility is someone takes a virus from the environment that doesn’t actually spread very well in humans, and manipulates it a bit, and accidentally it escapes or accidentally infects someone and then you get an outbreak.”

    The first COVID-19 cases were detected in 2019 in Wuhan, China, where a high-level laboratory is located. Scientists at the lab were funded in part by the NIAID.

    Fauci, speaking on CNN, claimed that he’s “kept an open mind” as to the origin of COVID-19. However, he was involved in a paper that alleged in early 2020 that said SARS-CoV-2, which causes COVID-19, was “not a laboratory construct or a purposefully manipulated virus,” and cited the paper from the White House when asserting the virus had a natural origin.

    While a number of experts told Fauci privately around that time that characteristics of the virus pointed to it being engineered, evidence that later emerged strongly suggested a natural origin, including two 2022 papers in Science magazine, Fauci said on March 11.

    “But strongly suggesting, Jim, doesn’t nail it down definitively, and that’s the reason why I say to this day that I will keep a completely open mind as to what the origin is,” Fauci said.

    Neither Fauci nor other natural origin theory proponents have identified an animal host, which is necessary to establish their position.

    Chinese authorities, meanwhile, have blocked investigators from the Wuhan lab, which was cut off from U.S. funding after not sharing data with U.S. officials.

    Some U.S. intelligence agencies say the current evidence supports the origin being a laboratory-associated incident, while others are in favor of the natural origin theory.

    While lab accidents have occurred in the past, no lab leaks have led to pandemics, Fauci said.

    “There have been accidents in a lab, that happens intermittently—we’ve had experience with that in modern times—but there has never been a situation where a virus escaped from a lab, that’s a brand new virus—that no one has ever seen before—that’s led to a pandemic,” he said. “That’s never happened.”

    CNN did not ask Fauci about a newly published email that said he “prompted” the drafting of the 2020 paper.

    Fauci was speaking after Dr. Robert Redfield, the former head of the U.S. Centers for Disease Control and Prevention, told a congressional panel that the evidence points to the Wuhan lab.

    Redfield cited how the Wuhan lab deleted sequences, how the lab was under military control, and how a contractor redid the ventilation system there.

    “There is strong evidence there was a significant event in that laboratory in September 2019,” he said.

    Reaction to Calls for Prosecution

    On CNN, Fauci also reacted to calls to prosecute him over false statements he’s made.

    “There’s no response to that craziness,” Fauci said.

    “I mean, prosecute me for what? What are they talking about? I mean, I wish I could figure out what the heck they were talking about. I think they’re just going off the deep end,” he added.

    Sen. Rand Paul (R-Ky.) has referred Fauci for prosecution for telling members of Congress that the United States did not fund gain-of-function research in China despite documents being made public that experts say show that U.S.-funded experiments led to a gain of function in a bat coronavirus.

    The U.S. Department of Justice has not charged Fauci, who left office around the New Year.

    Twitter CEO Elon Musk is among others who have called for the prosecution of Fauci, while Republican lawmakers, now in control of the U.S. House of Representatives, have vowed to investigate him.

    Such statements have “a difficult effect and a deleterious effect on my family,” Fauci said. “I mean, they don’t like to have me getting death threats all the time. Every time somebody gets up and spouts some nonsense, that’s misinformation, disinformation, and outright lies, somebody somewhere decides they want to do harm to me and/or my family. So that’s the part about it that is really unfortunate.”

    https://www.theepochtimes.com/covid-19-could-stem-from-risky-experiments-at-chinese-lab-fauci_5118654.html

  25. Former Clinton Treasury Official Claims Biden Has ‘Effectively Nationalized’ the Banking System

    by Jamie White
    March 14th 2023, 12:06 pm

    3:37

    Tom Elliott
    @tomselliott

    Former deputy Treasury secretary, Roger Altman, admits: With SVB, Biden Admin “effectively nationalize[d] … the deposit base of the U.S. financial system … Technically speaking, they haven’t [nationalized the banking system], but in a broad sense, they are verging on that.”

    https://twitter.com/tomselliott/status/1635624302719520768?s=20

    1. I’m curious when I’ll be able to just do my checking directly with the Fed. It would make things much less complicated.

        1. I’m a good little Red Guard, no worries about that. The teevee says what to think and I repeat.

  26. Next Bank to Fail? Shares in Credit Suisse Fall to All-Time Low After Bank Admits ‘Material Weakness’

    KURT ZINDULKA
    14 Mar 2023

    Warnings have emerged of a wider banking collapse on the backs of the failure of the Silicon Valley Bank, with a financial expert who predicted the 2008 financial crisis warning that Credit Suisse may be the next to fall after the Swiss bank’s shares fell to an all-time low on Tuesday.

    Switzerland’s second-largest bank, Credit Suisse, saw its shares fall by five per cent in early trading on Tuesday to a record low for the company after confirming some $8 billion (£6.6 billion) in losses in 2022 and admitting that there was “material weakness” in its accounting system for financial reports.

    https://www.breitbart.com/europe/2023/03/14/next-bank-to-fail-switzerlands-credit-suisse-shares-fall-to-all-time-low-after-admitting-material-weakness/

    1. and admitting that there was “material weakness” in its accounting system for financial reports.

      Meaning it’s even worse than they are reporting

  27. Property taxes? Yes, of course, property taxes.

    “President Joe Biden bashed a wave of anti-trans legislation from Florida Republicans, calling their efforts to ban gender-affirming care and enact other anti-LGBTQ policies “cruel” and “close to sinful.”

    Sinful? Leviticus and Deuteronomy were written 6,000 years ago, but yeah, Marxism.

    “Republicans across the country have deployed an arsenal of legislation against the LGBTQ community, including bills to ban public drag performances, block trans athletes from playing on school teams, and bar discussion about sexuality and gender identity in schools.

    “It’s not like, you know, a kid wakes up one morning and says, ‘You know, I decided I want to become a man, or I want to become a woman, or I want to change.’ I mean, what are they thinking about?”

    https://www.huffpost.com/entry/biden-condemns-floridas-anti-trans-legislation-cruel-close-sinful_n_640fbc9ae4b0a3902d2c82f9

    Pedo Joe is actually correct with that last paragraph. Children don’t decide, they are groomed.

    Your property taxes are paying for this.

    1. and “close to sinful.”

      Woe to those who call evil good and good evil – Isaiah 5:20

      I mean, even Pope Francis has condemned transgenderism. And he’s hardly conservative.

  28. Re: “When money was very easy, everybody thought that this was going to last forever so they did stupid things.”

    Easy money is not an act of God. If my memory serves me right, then they were goosed into that behavior by the Powers-that-Be with their endless QE, Negative Interest Rate, Transitory Inflation and other gimmicks and now they are putting the blame on their victims with a perfectly straight face.

    Re: “the Fed is having to raise interest rates because it’s got to fight the inflation.”

    Translation: Having set the fire themselves, the very same morons are now going to douse it.

    As the old saying goes, Stupidity has got us into this mess and stupidity will get us out of it . . .

  29. The price of oil in $ is dropping like a rock, along with the price of $. Maybe something bigger than a little bank bailout is happening.

    2. The price of oil in $ is dropping like a rock, along with the price of $.

      A sure sign of an impending global crash. That said, gas is still $4/gallon in my neck of the woods.

      1. This bond/MBS debacle might drive the stake into the heart of the negative interest rate vampire.

          1. The MMT (Magic Money Tree) certainly came in handy for saving the taxpayer from the expense of making large SVB depositors whole.

        2. Either that, or it will incentivize the Fed to figure out a way to get rates back down to the zero bound…

      2. $3.79 if you look for it, now the Suncor refinery is back on line. But with endless war in Ukrainistan and #MuhSummerDrivingSeason it will be $6+ soon enough.

        Anything, ANYTHING, to make working people suffer. It’s the globalist way.

    3. The Fed just implicitly backstopped any bank deposits not guaranteed by the FDIC. I don’t know how big the number is, but it may be pretty big.

  30. ‘These were visible to anyone who wanted to look,’ Kelleher told me. ‘But apparently, the Fed was AWOL.’

    Dennis, they only have an annual staff payroll of $2,000,000,000. They can’t be everywhere.

  31. Dumb question of the day: Why is the FDIC needed if uninsured deposits are also eligible for bailouts? Why not just scrap the FDIC subject to the understanding that the Magic Money Tree is available as needed to provide bank bailouts?

    1. The Financial Times
      Opinion Silicon Valley Bank
      US regulators are setting a dangerous precedent on Silicon Valley Bank
      The FDIC seems to think the banking system is more fragile than it really is
      Sheila Bair
      The Federal Deposit Insurance Corporation headquarters in Washington. The mere fact regulators designated two midsized banks as systemic implies they think the system is fragile
      Sheila Bair 7 hours ago
      The writer is a former chair of the US Federal Deposit Insurance Corporation and a senior fellow at the Center for Financial Stability

      Preventing “systemic risk” was repeatedly used as a rationale for bailing out Wall Street during the 2008 financial crisis. The 2010 Dodd-Frank Act was supposed to have fixed all of that by strengthening regulation and banning government bailouts. Yet, banking regulators have now decided that the failure of two midsized banks, Silicon Valley Bank and Signature, pose systemic risk, requiring the Federal Deposit Insurance Corporation to pay off their uninsured depositors.

      At combined assets of $300bn, these two banks represent a minuscule part of the US’s $23tn banking system. Is that system really so fragile that it can’t absorb some small haircut on these banks’ uninsured deposits? If it is as safe and resilient as we’ve been constantly assured by the government, then the regulators’ move sets dangerous expectations for future bailouts.
      …

  32. California Gov. Gavin Newsom lobbied the White House and the Department of the Treasury about the pending bailout of Silicon Valley Bank, even as three of his private wineries had apparently been among the bank’s clients, according to a Tuesday report by Ken Klippenstein of the Intercept.

    According to Klippenstein’s reporting, Newsom’s personal relationship with SVB went beyond the wineries. One anonymous former employee who handled Newsom’s finances told Klippenstein that Newsom “maintained personal accounts at SVB for years.”

    1. “California Gov. Gavin Newsom lobbied the White House and the Department of the Treasury about the pending bailout of Silicon Valley Bank, even as three of his private wineries had apparently been among the bank’s clients, according to a Tuesday report by Ken Klippenstein of the Intercept.”

      Bailout? What bailout?

  34. Why would a bank worry about paying for hedges if they knew bailouts were available to make their depositors whole in case the assets fell short?

    Hedges are costly and erode profits during the boom times.

  37. Where is that 2006 – 2009 NASA scientists Global Warming parents will have to tell their kids what snow looked like article when you need it.

    Justin Michaels
    @JMichaelsNews

    Power outages are on the rise in the northeast under the weight of the heavy, wet snow falling with winter storm #Sage. @weatherchannel has continuing coverage as the snow falls. WATCH 👀👇🏼

    https://twitter.com/JMichaelsNews/status/1635630611829227520?s=20

  38. It’s the spike protein not the delivery system!

    https: // www. fda. gov / news-events / press-announcements / fda-roundup-march-14-2023:

    “Yesterday, the Janssen COVID-19 Vaccine Fact Sheet for Healthcare Providers Administering Vaccine (Vaccination Providers) was revised to include a Warning conveying that reports of adverse events following use of the vaccine under emergency use authorization suggest increased risks of myocarditis and pericarditis, particularly within the period 0 through 7 days following vaccination. The Fact Sheet for Recipients and Caregivers was also revised to include information about myocarditis and pericarditis following administration of the Janssen COVID‑19 Vaccine. An additional revision to the Fact Sheets was made to include that facial paralysis (including Bell’s Palsy) has been reported during post-authorization use.”

  39. From the Dumver Post:

    Private-sector employers in the state failed to grow their payrolls in January, a disappointing start to the new year

    Uh, oh.

  40. Gold, Silver, Platinum – Precious Metals Rally As Treasury Yields Plunge
    Vladimir Zernov
    Published: Mar 13, 2023, 08:31 PDT•1min read
    Gold
    Traders rush to buy precious metals as Treasury yields test multi-week lows.

    Gold rallied as Treasury yields plunged amid problems in the U.S. regional banks sector. The outlook for Fed policy has significantly shifted in recent days, and traders expect that the central bank will raise the rate by just 25 bps at the next meeting. Falling yields are bullish for gold that pays no interest.

    Silver rallied 6% as traders rushed to buy precious metals amid falling Treasury yields. The yield of 10-year Treasuries declined below the 3.50% level, while the yield of 2-year Treasuries settled near 4.00%. If yields continue to move lower, silver could get more support.
    …
    https://www.fxempire.com/forecasts/article/gold-silver-platinum-precious-metals-rally-as-treasury-yields-plunge-1309309

    1. The Financial Times
      Meta Platforms
      Meta axes further 10,000 jobs in fresh round of cuts
      Facebook and Instagram parent announces new cull as it strives to improve efficiency
      The Meta logo on a smartphone
      Meta had previously announced a round of job cuts affecting 11,000 employees
      Hannah Murphy in San Francisco and Cristina Criddle in London yesterday

      Meta has announced plans to axe a further 10,000 jobs over the coming months as chief executive Mark Zuckerberg continues to cut costs in what he has called a “year of efficiency”.

      The move, announced on Tuesday, marks the $469bn social media company’s second major round of cuts in just four months. It comes on top of the reductions announced in November, which affected 11,000 jobs — about 13 per cent of its workforce — the biggest cull in its history.

      In a blog post, Zuckerberg said leaders would lay out restructuring plans to flatten the organisation over the next couple of months, with the group cancelling lower-priority projects and reducing hiring rates. Meta will also close 5,000 open vacancies.
      …

    2. Banking
      Published March 11, 2023 4:23pm EST
      Andrew Yang warns of ‘mass layoffs,’ calls for government intervention after Silicon Valley Bank collapse
      Andrew Yang warned mass layoffs if the government does not intervene in the Silicon Valley Bank collapse
      By Sarah Rumpf FOXBusiness
      Tech CEO Ashley Tyrner, who has $10 million in the Silicon Valley Bank, discusses the collapse and what it means for startups on ‘The Big Money Show.’

      Andrew Yang, the entrepreneur who grabbed national attention during his 2020 White House run and his 2021 New York City mayoral run, urged government intervention following the Silicon Valley Bank (SVB) collapse, warning of potential mass layoffs in the near future and a “financial contagion.”

      “In the absence of some kind of action you’ll see thousands of mass layoffs and defunct companies, a wiped out generation of start-ups.” Yang warned.

      In a series of Twitter posts, the businessman urged the California government or the U.S. Treasury Department to intervene to prevent a series of calamities that would likely affect thousands of companies and individuals, “through no fault of their own.”
      …
      https://www.foxbusiness.com/economy/andrew-yang-warns-mass-layoffs-calls-government-intervention-silicon-valley-bank-collapse

Comments are closed.