Yesterday I posted a podcast with John Maxfield on what’s going on with banks right now. I’m obviously biased, but I thought it was excellent / well worth listening. Anyway, I think the two most frequent inbounds I am getting these days are:
wrt John's “everyone just needs to chill out and these underwater loans will be fine.” - that comment also stands out to me. I think that probably shall be taken under the context that John acted more like a historian examining Roman Empire rise and fall, and goes Emperor X lost the battle Y that year, it happened, no biggie (despite 100k people died).
I own all of these securities, thought it was a great article - and my theory was the major panic of these banks that have suffered so far were those that pay attention to the markets and social media very intently, such as VC firms causing panic overnight and looking at where to move their money. Zion specifically is located in an area where most people just want a bank they can walk into and speak with people and get a cashiers check written every once in a blue moon. its a "blue collar" bank where most people aren't in the same category as SIVB and that's why I don't believe a liquidity problem is something to worry too much about. My bullish case for Zion is that its located in Salt Lake City Utah which is seeing a lot of growth and spillover form California as of recently due to its corporate tax haven nature. I love the article Andrew and my colleagues and I enjoy listening to your podcast!!
excellent work...problem i see is that hundreds of billions will leave the banks and go into money market funds, short term bond funds, t bills. how many people reading this have made this trade already?
Great article - loans cannot be marked to market unlike securities which are in trading book or AFS. So if they have a bank run -all such banks will be in trouble but they will have access to FHLB , Fed or big banks recycling depositors - it is liquidity rather than solvency issue for most of them . former is short term problem but latter is a medium to long term
Thoughtful writeup thanks for sharing.
wrt John's “everyone just needs to chill out and these underwater loans will be fine.” - that comment also stands out to me. I think that probably shall be taken under the context that John acted more like a historian examining Roman Empire rise and fall, and goes Emperor X lost the battle Y that year, it happened, no biggie (despite 100k people died).
I own all of these securities, thought it was a great article - and my theory was the major panic of these banks that have suffered so far were those that pay attention to the markets and social media very intently, such as VC firms causing panic overnight and looking at where to move their money. Zion specifically is located in an area where most people just want a bank they can walk into and speak with people and get a cashiers check written every once in a blue moon. its a "blue collar" bank where most people aren't in the same category as SIVB and that's why I don't believe a liquidity problem is something to worry too much about. My bullish case for Zion is that its located in Salt Lake City Utah which is seeing a lot of growth and spillover form California as of recently due to its corporate tax haven nature. I love the article Andrew and my colleagues and I enjoy listening to your podcast!!
excellent work...problem i see is that hundreds of billions will leave the banks and go into money market funds, short term bond funds, t bills. how many people reading this have made this trade already?
Great article - loans cannot be marked to market unlike securities which are in trading book or AFS. So if they have a bank run -all such banks will be in trouble but they will have access to FHLB , Fed or big banks recycling depositors - it is liquidity rather than solvency issue for most of them . former is short term problem but latter is a medium to long term
based on TBV metric, why not just invest in C?