Congratulations FRC investors / traders

[JaiBalayyaaa]

5 minutes ago, Spartan said:

Fed will have to bail out them eventually, along with FDIC money. because they dont want the Fin inst to pull out the bonds at loss and lower rate.

that negates their credibility of bonds.

so until the bonds mature, Fed has to keep pumping into it...or sell the institute to other major bank..which will definitely again run into same issue.

to avoid the collapse of bigger one, they will keep these smaller ones floating.

Fed didn't bail out technically, and hopefully won't. They don't care about investors, they will make banks pay more to the FDIC, but lose their interest in the process. But again, JPow will not be happy about this even though it's limited amount according to FDIC. 

[TotalDesi]

US Banks barrowed 164.8 billion from Federal Reserve over the past week anta!

[Spartan]

Just now, JaiBalayyaaa said:

Fed didn't bail out technically, and hopefully won't. They don't care about investors, they will make banks pay more to the FDIC, but lose their interest in the process. But again, JPow will not be happy about this even though it's limited amount according to FDIC. 

they didnt, but they will have to.

[Gorantlamdhav]

1 hour ago, Spartan said:

just for 30B$ did they go haywire in last couple of days..

there is something wrong in basics which they are handling...

adi kappi puchataniki....plaster bandaid-30B iste saripotada.?

unless they change the way they operate and use depositors money....these will not work long term..

it is differnet case if Fed pupms in money...but i still feel something is fundementally wrong with these fin institutes that are melting down

Nuvvu avalistey pegulu lekka pedtunnav kada

[hyperbole]

1 hour ago, Spartan said:

just for 30B$ did they go haywire in last couple of days..

there is something wrong in basics which they are handling...

adi kappi puchataniki....plaster bandaid-30B iste saripotada.?

unless they change the way they operate and use depositors money....these will not work long term..

it is differnet case if Fed pupms in money...but i still feel something is fundementally wrong with these fin institutes that are melting down

 

all the banks are under water because of the long term bonds, few got more impacted than the others because their customer base is concentrated and if enough pull the money the bank will collapse. SVB and signature bank collapsed for the same reason because some customers(Circle) even has like $3-4 billion in deposits.

similarly FRC is known for high net worth individuals and their wealth management portfolio, they approx have 200k customer but on an avg each account is valued $17million. There is a risk for FRC although diverse than SVB and Signature but concentrated or what they call is high % of uninsured depositors and that will drive a fear among those individuals.

FRC doesn’t do credit cards, auto or personal loans. Their portfolio is concentrated in residential and commercial real estate and bonds. The don’t have as much exposure to bonds as SVB, SVB had like 70% of their deposits in long term bonds

[Spartan]

5 minutes ago, Gorantlamdhav said:

Nuvvu avalistey pegulu lekka pedtunnav kada

I have a sheepish 'ed personality....

[Spartan]

Just now, hyperbole said:

all the banks are under water because of the long term bonds, few got more impacted than the others because their customer base is concentrated and if enough pull the money the bank will collapse. SVB and signature bank collapsed for the same reason because some customers even has like $4 billion in deposits.

similarly FRC is known for high net worth individuals and their wealth management portfolio, they approx have 200k customer but on an avg each account is valued $17million. There is a risk for FRC although diverse than SVB and Signature but concentrated or what they call is high % of uninsured depositors and that will drive a fear among those individuals

isnt that being fundamentally wrong...

when you are taking care of depositors money, isnt it their responsibility to safeguard the failure scenarios...

Im not telling they are worst banks or cheaper ones..

I pointed out they were doing something wrong, which led to this collapse.

 

[hyperbole]

45 minutes ago, Spartan said:

isnt that being fundamentally wrong...

when you are taking care of depositors money, isnt it their responsibility to safeguard the failure scenarios...

Im not telling they are worst banks or cheaper ones..

I pointed out they were doing something wrong, which led to this collapse.

 

In a normal scenario we would get 1% or less than1% and bank  would make 1.5%-2% from the bonds, banks bought bonds at the low rates when they had exceeds deposits but now some banks are paying customers as high as 4.5% in their savings and checkings, obviously people will be tempted to withdraw their funds and move it to another bank which is ready to pay more.

secondly, pandemic lo printing valla, banks got so much excess cash, SVB got in excess of 3X usually they have in their reserves, these banks are not regular banks and very sensitive to lending like credit cards, consumer loans etc, they cannot keep holding money either because they will need to pay depositors nominal interest even if it is 1% or less than 1% hence bought long term bonds. 

 

[Pahelwan2]

Already downgraded as JUNK

[Spartan]

18 minutes ago, hyperbole said:

In a normal scenario we would get 1% or less than1% and bank  would make 1.5%-2% from the bonds, banks bought bonds at the low rates when they had exceeds deposits but now some banks are paying customers as high as 4.5% in their savings and checkings, obviously people will be tempted to withdraw their funds and move it to another bank which is ready to pay more.

secondly, pandemic lo printing valla, banks got so much excess cash, SVB got in excess of 3X usually they have in their reserves, these banks are not regular banks and very sensitive to lending like credit cards, consumer loans etc, they cannot keep holding money either because they will need to pay depositors nominal interest even if it is 1% or less than 1% hence bought long term bonds.

ade anna, they couldnt tackle that huge influx of Cash at hand...and at same time couldnt dispose it off properly...and went with Bond investment...

vere banks were able to provide 4-4.5% ante...they did some peoper moves according to the market, and SVB/FRC lacked that.

[Guest]

2 hours ago, Spartan said:

because the deal is not yet done..

and the amount is subject to change..

Deal ayna kuda it’s just a band aid. No way it’ll go back to previous state

[hyperbole]

8 minutes ago, Spartan said:

ade anna, they couldnt tackle that huge influx of Cash at hand...and at same time couldnt dispose it off properly...and went with Bond investment...

vere banks were able to provide 4-4.5% ante...they did some peoper moves according to the market, and SVB/FRC lacked that.

MBS Bonds are deemed as very safe since underlying securities are guaranteed by government through Fannie and Freddie. Bonds are guaranteed money but locked in at the same time. Loans are risky escpeically unsecured dept like credit cards and personal loans.

An healthy bank should have a right mix of bonds, loans and other investments. 

No bank will be able to survive if 30-40% withdraw money in a short time.

WaMu was $100 billion market cap bank, in 10 days, $40 billion was withdrawn and it went under, Same with SVB in 2 days $48 billion was withdrawn

 

[Anta Assamey]

Ee thread lo edo high level financial discussion jarugutundi ga... 

[hyperbole]

12 minutes ago, Guest said:

Deal ayna kuda it’s just a band aid. No way it’ll go back to previous state

They bought enough time to find a deal to sell themselves.

They have a very unique proposition and none of the big the big banks have such a concentrated amount of high net worth customers.

They are leaders in Private banking , basically if a depositor calls for some reason then it is not routed to 1800 numbers but a reliationship manager gets on the call and solves their issues. Also they do a lot of estate and wealth management and makes most of their profits from wealth management portfolios. They don’t do cards, unsecured loans or anything of that sort. Also their customer base is deep rooted and mostly referral based. They are a class apart when it comes to banking and customer service and the main reason high net worth candidates stick around with them.

 

[dasari4kntr]

3 hours ago, dasari4kntr said:

is it loan or deposit just like that..?

either way this is interesting…almost 6 months back…musk wanted a loan…but these banks rejected and showed high interest rates cause…

now it makes sense…