Here’s the Great Deal JP Morgan Got on First Republic, according to JP Morgan’s Victory Lap in front of Investors by Wolf Richter • May 1, 2023 • 183 Comments 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%.”
First Republic Zombie Bank Dismembered, Pieces Handed to JP Morgan, Uninsured Depositors Bailed Out. Stockholders, some Bondholders Bailed in. Cost to FDIC Fund: $13 Billion by Wolf Richter • May 1, 2023 • 135 Comments FDIC Board Member McKernan laments “our country’s bailout culture that privatizes gains while socializing losses.”
First Republic Discloses it’s a Zombie by Wolf Richter • Apr 24, 2023 • 126 Comments Shares, after jumping 12% during the day in anticipation of something wonderful, plunged 22% after-hours, now within a hair of the low in March.
Banks and Commercial Real Estate Debt, a Deep Dive: Investors and Government on the Hook for the Majority of CRE Debt by Wolf Richter • Apr 10, 2023 • 95 Comments Retail CRE debt has been crappy since 2017, and banks managed without collapsing. Now Office goes to heck. Multifamily, the biggie, is following.
Fed’s Balance Sheet Plunges by $101 Billion in Two Weeks, as QT Continues and Bank Liquidity Support Begins to Unwind by Wolf Richter • Apr 6, 2023 • 114 Comments The dream of a return to QE was fun while it lasted.
Battle for Deposits: Tired of Getting Screwed by Banks, People Yank their Cash Out, Forcing Banks to Pay Higher Interest Rates. Treasury Yields Are a Mess Though by Wolf Richter • Mar 27, 2023 • 198 Comments That’s how it should have been all along. But the Fed’s interest rate repression killed competition for deposits.
FDIC Sells Much of Silicon Valley Bank to First-Citizens Bank. Total Cost of SVB Collapse to Deposit Insurance Fund: $20 Bn by Wolf Richter • Mar 27, 2023 • 144 Comments Even collapsed banks have lots of assets that the FDIC sells to cover the costs to the Fund. Signature Bank collapse costs the Fund only $2.5 billion
My Company Ended Up with Some Exposure to Silicon Valley Bank: I Warned about Monogamy’s Downside Years Ago by John McNellis • Mar 26, 2023 • 55 Comments In 2011, I published an essay on the need for multiple banking relationships that hits the SVB coffin nail on the head.
Free Money Turned Brains to Mush, Now Some Banks Fail by Wolf Richter • Mar 25, 2023 • 177 Comments The Fed’s rate hikes and QT didn’t break anything except consensual hallucination.
The Fed Should Be Fired as Bank Regulator. Powell’s Discussion of Silicon Valley Bank & Regulatory Failure Shows Why by Wolf Richter • Mar 24, 2023 • 191 Comments The Fed is structurally too conflicted to regulate banks. The FDIC is not, but it needs tiger teeth to bite CEOs’ heads off.
