It would take a Swifty to know Swifties and their individual demand curves.
Bank Buyers Wait For FDIC Subsidy
A rose-colored glasses wearing Jamie Dimon said on May 11th as paraphrased by CNBC, “Regional banks are “quite strong” and will have good financial results, but managers are worried because of the bank runs that have taken down three firms, he said.”
Depositors are not listening to Mr. Dimon and neither are regional bank shareholders.
Privatize Gains, Socialize Losses
That last boldfaced item is “$50 loan from the FDIC.” The deposit insurer doesn’t have that kind of money. The FDIC borrowed it from the Fed (which doesn’t have it either but can conjure it up out of thin air) to lend to JP Morgan Chase. JPM then paid off the $30 billion it and the other 10 big banks placed on deposit as First Republic was circling the drain.
The Agony Out There
As Snider points out, “There is so much hubris attached to [CLOs] because they are basically made to be quantified by mathematical models.” So, the Fed can lower rates but that won’t save real estate. Real estate will continue to crash and THAT will bring down rates.
First Republic Count Down
Yes, the taxpayers will be the unwitting holders of First Republic’s bad assets, while one of the FDIC’s favored bidders gets the good stuff at a discount. Jamie Dimon’s J.P. Morgan already has ten percent of the nation’s deposits making that bank ineligible to pick up First Republic but don’t be surprised if Jamie receives a “special government waiver” if he submits the winning bid.
Peak Environmentalism
“No. I think EV is going to be something you're going to go to a museum with my kids and be like, wow, that was an evolutionary dead.”
How Does a Bank Collapse in 48 Hours?
If you watched the Fed Chair Jerome Powell testify before the senate and the house early last week you heard over and over that banks are well capitalized. The non-sequitur inspiring the Shakespearean quote “Methinks you protest too much.”
Retail Investors Positioned For Thrashing
Individual investors are fighting the Fed trading options that expire the same day they begin trading. “This week, volume for contracts that expire on the same day they’re traded hit a record 50% share of all the options transactions on the S&P 500, data from CBOE and Nomura show.”
L.A. Walk Away
CoStar News reports, “The loan defaults are another sign of struggle for office real estate owners in the nation's second-largest city as remote working policies enacted in the pandemic hamper demand. National office real estate demand has been curtailed since 2020, with vacancy at 12.8%, its highest since the Great Recession, according to CoStar data.”
White Collar Canary
Tech and other corporate layoffs are announced everyday, but closer to your local courthouse, law firms are feeling the pinch.
Increased Interest Rates Erode Bank Capital
Many banks bought mortgage-backed securities during the zero-rate days to “juice income,” but now, on a mark-to-market basis those MBS are trading for a fraction of purchase prices, creating losses of 50 to 60 percent of capital. “Regulators are not pleased.”
Movements to Rackets: The Falwells Rise and Fall
The common thread of the four stories, three from the speech plus the Falwells, is as the movement becomes a racket each and every time power turns to money turns to sexual exploits.
The Confidence Man Runs Again
Unlike the many recent books about Trump, Haberman connects Donald’s early years with his presidential term and aftermath. Haberman has reported on Trump her entire career and is the only person who could write “Confidence Man.”
Crypto Meltdown and Pension Assets
However, as MarcoMaven’s Steph Pomboy tweeted Wednesday, “For my money, the most interesting…and foreboding…aspect of the downfall of Blankman-Freed’s FTX is the «revelation» that the Ontario Teachers Pension was a major investor. The coming pension crisis is going to be massive…and the switch to QE by global cbks whiplash-inducing.”
"Poison Ivy" Zelman's says "Stuck Factor" has Housing Market Stuck
Existing home sales are undergoing a historic sharp contraction in sales. And, what will keep the residential market sluggish is what Zelman calls the “Stuck Factor.”An incredible 92% of homeowners with mortgages have a 5% rate or lower.
Trump and The Age of Ignorance
My questioner, another prominent libertarian attorney, replied with words to the effect,”Trump showed no respect for the government strictures and laws we all hate. He was good because he showed no respect for the government.” While I put up no argument at the time, Trump’s disrespect reflected no libertarian principles, but only 300 pounds (okay 239 according to the White House physician) of walking, talking personal character defects.
Whistling Past the Graveyard
So, the average consumer’s home buying power has been cut in half. Two real estate broker friends, one specializing in high end, the other, a notch below, say the market in Las Vegas is dead.
Stormy Monday or Finally a Pivot?
FXHedge tweeted Saturday, “CREDIBLE SOURCE SAYS A MAJOR INTERNATIONAL INVESTMENT BANK ON THE BRINK -ABC AUSTRALIA “
Housing: Is it a Correction or Worse?
Big builder Lennar sent out a sales flier via email, advertising 3.99% mortgage interest from Lennar Home mortgage plus price reductions of $40,000 to $50,000 a unit. These reductions included units in subdivisions selling from the $300,000s all the way to over $1,000,000.
Political Strategists On the Road
once relatively anonymous political strategists now have star power that had previously only been accessible to those at the tippy-top of the presidential strategist ladder, people like Lee Atwater or Karl Rove or James Carville or Paul Begala,” Miller writes.