Banks Failing: Is It 2008 Again?

[Euclid]

The comments...

Same comments we were saying 4 years ago when they enacted those laws


https://mishpacha.com/new-york-jilts-landlords-with-rent-overhaul/

[yelped]

Same comments we were saying 4 years ago when they enacted those laws


https://mishpacha.com/new-york-jilts-landlords-with-rent-overhaul/

Get ready for the next phase (10 times worse):

https://nypost.com/2023/03/20/new-ny-rent-control-bill-would-drive-out-small-landlords/amp/

[Abey]

If anyone saw Sternlicht on CNBC yesterday he’s arguing for MtM and how the fed created this illusion by allowing treasury at full value to sit on balance sheets at the same time raising rates devalued those assets

[ExGingi]

If anyone saw Sternlicht on CNBC yesterday he’s arguing for MtM and how the fed created this illusion by allowing treasury at full value to sit on balance sheets at the same time raising rates devalued those assets

Link?

Is Sternlicht doing as he asks others to do? Does he mark his commercial RE to market?

[Yo ssi]

[Abey]

Link?

Is Sternlicht doing as he asks others to do? Does he mark his commercial RE to market?

Are you comparing a regulator with an investor? He actually talks about CRE. Have a listen

[chevron]

https://finance.yahoo.com/news/signature-bank-deal-fdic-left-135604132.html

I thought ira zlotowitZ was trying to buy that?

[AsherO]

I thought ira zlotowitZ was trying to buy that?

You’re saying that based on what? Can he even afford it?

[chevron]

You’re saying that based on what? Can he even afford it?

It was on his LinkedIn, a group of re ppl

[Abey]

I thought ira zlotowitZ was trying to buy that?

Nah he was offering to buy some paper underpinning may of the re loans he deals with, doubt the FDIC is looking to sell to him nor his ability to properly underwrite it

[Abey]

For some perspective on how little these assets are worth on the market https://www.wsj.com/articles/first-citizens-acquires-much-of-failed-silicon-valley-bank-5a4545f
“The pur­chase in­cludes $119 bil­lion in de­posits and about $72 bil­lion of SVB’s loans at a dis­count of $16.5 bil­lion. Some $90 bil­lion of SVB’s se­cu­ri­ties will re­main in re­ceiver­ship. ”

So the *good* assets were discounted around 22.9 % and the rest left to rot…

[yuneeq]

For some perspective on how little these assets are worth on the market https://www.wsj.com/articles/first-citizens-acquires-much-of-failed-silicon-valley-bank-5a4545f
“The pur­chase in­cludes $119 bil­lion in de­posits and about $72 bil­lion of SVB’s loans at a dis­count of $16.5 bil­lion. Some $90 bil­lion of SVB’s se­cu­ri­ties will re­main in re­ceiver­ship. ”

So the *good* assets were discounted around 22.9 % and the rest left to rot…

A loan isn’t going be worth more than 100%, and in a fire sale of a large portfolio it’s definitely going to get a discount. That doesn’t meant he loans were bad loans.

[avromie7]

A loan isn’t going be worth more than 100%, and in a fire sale of a large portfolio it’s definitely going to get a discount. That doesn’t meant he loans were bad loans.

Especially if they're subject to the same interest rate problems that the bonds have.

[Abey]

A loan isn’t going be worth more than 100%, and in a fire sale of a large portfolio it’s definitely going to get a discount. That doesn’t meant he loans were bad loans.

True. Yet you can’t ignore the reality of what these are worth beyond their paper value

[CountValentine]

That doesn’t meant he loans were bad loans.

Except in this case that is exactly what it means. The talking points were this was a run on the bank and not that it made bad decisions. The fact is there was a run on the bank because it made bad decisions and was in deep sh*t.

[Joe4007]

A loan isn’t going be worth more than 100%

Not that this applies here, but theoretically it could (e.g. in the event of falling interest rates).

[Abey]

Not that this applies here, but theoretically it could (e.g. in the event of falling interest rates).

key word

[yuneeq]

True. Yet you can’t ignore the reality of what these are worth beyond their paper value

Except in this case that is exactly what it means. The talking points were this was a run on the bank and not that it made bad decisions. The fact is there was a run on the bank because it made bad decisions and was in deep sh*t.

I’m saying it’s very hard to offer true value in a lump sum fire sale with no time for anyone to sift through the individual loans that the portfolio comprises of. If anything, 23% discount sounds pretty expensive to me considering the circumstances.

[CountValentine]

I’m saying it’s very hard to offer true value in a lump sum fire sale with no time for anyone to sift through the individual loans that the portfolio comprises of. If anything, 23% discount sounds pretty expensive to me considering the circumstances.

They picked off the good stuff and received a discount. They should have paid the government for the 119 billion in deposits. I wonder why their stock went up 50% today. 

[aygart]

https://www.bloomberg.com/news/articles/2023-03-27/fdic-grants-first-citizens-rare-70-billion-credit-line-for-svb