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  1. #1
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    Banks

    The talking heads on CNBC are making it sound like we are headed back to the GFC. I know when a bank collapses that it sets off alarm bells but Silicon Valley Bank sounds like it had very little risk management. I bought some TFC today in the drop so I sure hope we don't see widespread bank failures. It was a small position .5% go account so it shouldn't kill me if it goes south but I feel like today may have been an over reaction.

  2. Stocks/Investments Moderator boneil's Avatar
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    #2
    I'm beginning to wonder if this is our Bear Stearns moment. I'm not following too closely but I have seen that there are emails going around from some funds to clients to pull they're money out of certain banks. But it might already be too late. It's more than one bank, I'm seeing people talk about online.

    My thought is, anybody who lost money from the GFC sees these headlines that will certainly come out the next couple days, will probably sell. I know that if I was near retirement, I would be selling. Maybe an over reaction but alot of the money "gurus" said everything was fine days before it was too late back in 08.

    And this is before the Fed kills enough jobs to get inflation back down to 2%.
    Thanos was the hero

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    #3
    Quote Originally Posted by boneil View Post
    I'm beginning to wonder if this is our Bear Stearns moment. I'm not following too closely but I have seen that there are emails going around from some funds to clients to pull they're money out of certain banks. But it might already be too late. It's more than one bank, I'm seeing people talk about online.

    My thought is, anybody who lost money from the GFC sees these headlines that will certainly come out the next couple days, will probably sell. I know that if I was near retirement, I would be selling. Maybe an over reaction but alot of the money "gurus" said everything was fine days before it was too late back in 08.

    And this is before the Fed kills enough jobs to get inflation back down to 2%.
    The jobs report tomorrow will be very important. If it is another strong one then look out below.

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    #4
    Today may be the start of the drop…..

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    #5
    Quote Originally Posted by TexomaDan View Post
    Today may be the start of the drop…..
    Very true. Once people start worrying about banks it is usually the point where it becomes real. There has been a lot of fear developing in the commercial real estate market and that usually finds its way to banks with high loan to deposit ratios.

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    #6
    Whats the saying? "history doesn't rhyme but it sure does repeat"

    One month ago. jump to 7:13.

    Thanos was the hero

  7. Stocks/Investments Moderator boneil's Avatar
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    #7
    I'm sure we all remember the infamous Cramer Bear Stearns incident:




    And lets not forget the Michael Burry story.
    Thanos was the hero

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    #8
    I'm on vacation and I am sitting on the same couch in the same position when the news broke on Lehman. I remember it like it was yesterday. Feels very deja vu.

  9. Stocks/Investments Moderator boneil's Avatar
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    #9
    Quote Originally Posted by NitroZ7 View Post
    I'm on vacation and I am sitting on the same couch in the same position when the news broke on Lehman. I remember it like it was yesterday. Feels very deja vu.

    Thats pretty cool. Scary as F though.
    Thanos was the hero

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    #10
    Hope it all burns. We need it.

  11. Stocks/Investments Moderator boneil's Avatar
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    #11
    companies are disclosing how much money they had at SVB. Good luck to ROKU shareholders
    Thanos was the hero

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    #12
    Quote Originally Posted by boneil View Post
    companies are disclosing how much money they had at SVB. Good luck to ROKU shareholders
    I just saw that. Holy crap. Anymore it seems less risky to just put your accounts with a place like fidelity and just hold it in Treasuries.

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    #13
    If SVB problems stemmed from bond prices declining, their balance sheet had unrealized losses in bonds. What about the big banks, and small banks? Is everybodies balance sheets sitting on large unrealized losses in the bond market. I saw someone post that JP Morgan is sitting on $50 billion in unrealized losses last quarter, clearly much worst today. I wonder how bad this really is?

    And if it's really bad, is that not bullish since the Fed will have to reverse course, but is that actually not bearish because the Fed would be trapped, they can't reverse course now, inflation would get crazy again.

    I was in the soft landing camp, but now I'm not sure thats possible.
    Thanos was the hero

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    #14
    Quote Originally Posted by boneil View Post
    If SVB problems stemmed from bond prices declining, their balance sheet had unrealized losses in bonds. What about the big banks, and small banks? Is everybodies balance sheets sitting on large unrealized losses in the bond market. I saw someone post that JP Morgan is sitting on $50 billion in unrealized losses last quarter, clearly much worst today. I wonder how bad this really is?

    SIVB had $15b in unrealized losses at $5.7b profit in 2022.
    JPM has $47.9b in unrealized losses at $122b.

    SIVB has (or had lol) $212b in assets
    JPM has $3.7 trillion


    Remember most of this is because of bonds crapping the bed and customers withdrawing. Forcing the unrealized loss. I don't see that happening at JPM. I am curious to see how far this spreads though.

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    #15
    Jim Cramer…what a D*****. If he recommends something just do the opposite.

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    #16
    I think most banks can handle the unrealized losses as long as they are not too levered. I am sitting on unrealized bond losses but since I have no leverage and plenty of liquidity I can just wait until they pay out at par on maturity. Someone on CNBC said the bank would have been fine if the rumors and panic hadn't started and the run never happened. It sounds like they had a liquidity problem rather than a solvency problem. Part of me wonders if someone intentionally took down this bank.

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    #17
    Quote Originally Posted by NitroZ7 View Post
    I think most banks can handle the unrealized losses as long as they are not too levered. I am sitting on unrealized bond losses but since I have no leverage and plenty of liquidity I can just wait until they pay out at par on maturity. Someone on CNBC said the bank would have been fine if the rumors and panic hadn't started and the run never happened. It sounds like they had a liquidity problem rather than a solvency problem. Part of me wonders if someone intentionally took down this bank.
    Yeah it's kind of a special situation it looks like.

  18. Stocks/Investments Moderator boneil's Avatar
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    #18
    I have a hard time imagining that the big banks didn't see this coming. Like JPM, how do they not see this coming and prepare for the worst........

    But did they prepare for Cramer https://twitter.com/jimcramer/status/1634222320398086145?s=20
    Thanos was the hero

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    #19
    Quote Originally Posted by boneil View Post
    I have a hard time imagining that the big banks didn't see this coming. Like JPM, how do they not see this coming and prepare for the worst........

    But did they prepare for Cramer https://twitter.com/jimcramer/status/1634222320398086145?s=20
    JP Morgan has been offering a huge amount of CDs over the last year. They are always near the highest yielding CDs. Seems like they are raising cash through CDs and locking it up until they get through this. I know Dimon said last year that they were not going to be lending. I think it is going to be pretty much impossible for anyone to get commercial real estate loans so we may start seeing defaults there in the coming months which will worsen things for many banks.

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    #20

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