A place to discuss all things ADM
#5191
Race Car
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Some regional banks have mismatched their assets with their liabilities.
I dont believe this will be systemic to the Big Commercial Banks. The Regionals have less liquidity and real estate risk.
But anyone that has a bunch of bonds in their portfolio purchased in a low rate environment that they are holding to maturity will have issues if their depositor base is mobile.
First Republic and PacWest come to mind.
Last edited by Diablo Dude; 03-13-2023 at 04:31 PM.
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AlexCeres (03-15-2023)
#5192
Race Car
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Treasury Secretary Janet Yellen said the her office would protect “all depositors” at the bank, The government actions will also include a new lending program that Federal Reserve officials said would be big enough to protect uninsured deposits in the wider US banking system.
The Fed is the lender of last resort.
It's etched in stone.
#5193
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I'm aware.
Some regional banks have mismatched their assets with their liabilities.
I dont believe this will be systemic to the Big Commercial Banks.
But anyone that has a bunch of bonds in their portfolio purchased in a low rate environment that they are holding to maturity will have issues if their depositor base is mobile.
First Republic and PacWest come to mind.
Some regional banks have mismatched their assets with their liabilities.
I dont believe this will be systemic to the Big Commercial Banks.
But anyone that has a bunch of bonds in their portfolio purchased in a low rate environment that they are holding to maturity will have issues if their depositor base is mobile.
First Republic and PacWest come to mind.
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nima639 (03-13-2023)
#5194
Race Car
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Why the management team at the bank never got around to raising capital in the marketplace is beyond me. They didnt raise until AFTER they sold out of their bond portfolio.
Seemed ***-backwards to me. I guess the threat of a Moody's downgrade forced their hand.
And the regulators appeared to be asleep at the wheel as well. Kind of feels like 1994 all over again when Orange County went BK after the Fed raised rates 6 times.
They raised one more time after The OC filed BK and then went on an easing cycle.
Interesting times!
Last edited by Diablo Dude; 03-13-2023 at 02:59 PM.
#5195
RL Community Team
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It would be truly ironic if by raising interest rates to "save" the economy, Powell actually wrecks it.
#5196
Race Car
#5197
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IRunalot (03-13-2023)
#5198
Race Car
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I think the economy was due for a reckoning regardless of what Powell does with interest rates. You can't juice up the economy like that and not expect to eventually have to pay the piper. All sorts of valuations have gone crazy, and the problems didn't begin with the pandemic.
M2 money supply increased a whopping and unprecedented 40% from $15.5 Trillion dollars to $21.7 Trillion dollars between February of 2020 to March of 2022.
That came from the FED. No one else. To claim that interest rates dont matter is terribly naive.
M2 (M2SL) | FRED | St. Louis Fed (stlouisfed.org)
#5199
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I think that you fail to realize that everything starts and ends with the Fed and its monetary policy.
M2 money supply increased a whopping and unprecedented 40% from $15.5 Trillion dollars to $21.7 Trillion dollars between February of 2020 to March of 2022.
That came from the FED. No one else. To claim that interest rates dont matter is terribly naive.
M2 (M2SL) | FRED | St. Louis Fed (stlouisfed.org)
M2 money supply increased a whopping and unprecedented 40% from $15.5 Trillion dollars to $21.7 Trillion dollars between February of 2020 to March of 2022.
That came from the FED. No one else. To claim that interest rates dont matter is terribly naive.
M2 (M2SL) | FRED | St. Louis Fed (stlouisfed.org)
Everything starts and ends with ADMs.
The only reason Powell is raising rates is to decrease money supply so there's less free cash and hence less money to pay for GT cars and thus lower ADMs.
Get with it, dude.
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#5200
Race Car
#5201
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I think that you fail to realize that everything starts and ends with the Fed and its monetary policy.
M2 money supply increased a whopping and unprecedented 40% from $15.5 Trillion dollars to $21.7 Trillion dollars between February of 2020 to March of 2022.
That came from the FED. No one else. To claim that interest rates dont matter is terribly naive.
M2 (M2SL) | FRED | St. Louis Fed (stlouisfed.org)
M2 money supply increased a whopping and unprecedented 40% from $15.5 Trillion dollars to $21.7 Trillion dollars between February of 2020 to March of 2022.
That came from the FED. No one else. To claim that interest rates dont matter is terribly naive.
M2 (M2SL) | FRED | St. Louis Fed (stlouisfed.org)
#5202
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We haven't even seen the full effects of the interest rate hikes, which we will later this year, and things are already breaking. Put on your seatbelts.
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usctrojanGT3 (03-15-2023)
#5203
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If the SVB assets aren't sufficient, then it comes from the Deposit Insurance Fund, which assesses financial institutions, who, in turn, will charge more to their customers. So, it depends on whether there is a shortfall and if so, then customers of banks will probably pay more in fees.
#5204
Burning Brakes
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The SVB share holders meanwhile are left eating yellow snow. Still a ton of fallout no matter if depositors are made whole or not. Unfortunately someone is always left holding the bag and now will be unlikely able to pay their ADM. That stings, especially when most had no opportunity to liquidate...
Last edited by fijibubba; 03-14-2023 at 02:44 AM.
#5205
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Is there a "values" thread anywhere tracking sale data? Asking prices are easy to see but would love some data on real-world transactions for used models. Making some space in my garage and a 992 GT3 may be on a short list of possible additions depending on price trends. Right now I'm basically just eyeballing BAT results.
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Mate (03-15-2023)