They don’t matter until they suddenly do.
Banks, forced by competition from money market funds, got the memo.
How do you lose 47% on 30-year Treasuries? Buy at auction in Aug 2020. Or carry them at purchase price and hide the “unrealized loss” in the footnotes.
Unlike the defaults during the Financial Crisis, this default cycle is structural, in addition to being financial.
From huge to somewhat less huge? Because they’re still six times the magnitude of the prior worst-record in 2018
After years of money printing and pandemic stimulus, it’s hard to wring all this liquidity out of the financial system?
Union Bank made a deal to sell its tower at 75% off original listing price, setting the first new benchmark. Other towers waiting in the wings.
Massive gyrations on the balance sheet after FDIC’s take-down of First Republic, sale of its assets to JP Morgan, and FDIC’s loan to JPM.
A one-time “bargain purchase gain” of $2.6 billion, “over $500 million” in net income accretion, lots of other goodies amounting to an IRR of “over 20%.”
FDIC Board Member McKernan laments “our country’s bailout culture that privatizes gains while socializing losses.”