Tag Archives: banking industry

Michael Snyder points to the real question that we need to be asking about the Banking Industry

Revelations 18:9-11 “The kings of the earth who committed fornication and lived luxuriously with her will weep and lament for her, when they see the smoke of her burning, 10 standing at a distance for fear of her torment, saying, ‘Alas, alas, that great city Babylon, that mighty city! For in one hour your judgment has come.’ 11 “And the merchants of the earth will weep and mourn over her, for no one buys their merchandise anymore

Important Takeaways:

  • The Big Banks Have Bailed Out First Republic, But Who Is Going To Bail Out The Big Banks When They Start Failing?
  • Citi group posted on their website : Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, BNY-Mellon, PNC Bank, State Street, Truist and U.S. Bank to make uninsured deposits totaling $30 billion into First Republic Bank
    • So why was First Republic in so much trouble?
    • Well, just like Silicon Valley Bank and Signature Bank, they were sitting on enormous unrealized losses because the government bonds that they were holding had lost a ton of value thanks to rapidly rising interest rates.
    • Ultimately, those unrealized losses made a potential purchase of First Republic quite “unappealing” to the “too big to fail” banks…
    • But the “too big to fail” banks are collectively sitting on hundreds of billions of dollars in unrealized losses themselves.
    • And they also have trillions of dollars’ worth of exposure to the derivatives bubble.
    • So who is going to bail them out when they start failing?
    • That is a question that we all need to start asking.
    • In order for our current economic system to function effectively, we need stable banks, and we need people to have faith in those banks.
    • For the moment, most ordinary Americans say that they still have faith in the institutions where they are currently doing their banking…
    • USA today say’s 7 in 10 still have faith in our banks
    • But the same can’t be said for those at the top of the economic food chain.
    • In fact, many of them are now transferring vast sums out of their banks while they still can…
    • This crisis is just getting started.

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The real SVB crisis could be just the beginning with bank branches around the world

SVB Drop

Revelations 18:11 “And the merchants of the earth will weep and mourn over her, for no one buys their merchandise anymore:

Important Takeaways:

  • SVB Fallout Spreads Around World From London to Singapore
  • Startup founders in California’s Bay Area are panicking about access to money and paying employees. Fears of contagion have reached Canada, India and China. In the UK, SVB’s unit is set to be declared insolvent, has already ceased trading and is no longer taking new customers. On Saturday, the leaders of roughly 180 tech companies sent a letter calling on UK Chancellor Jeremy Hunt to intervene.
  • “The loss of deposits has the potential to cripple the sector and set the ecosystem back 20 years,” they said in the letter seen by Bloomberg. “Many businesses will be sent into involuntary liquidation overnight.”
  • This is just the beginning. SVB had branches in China, Denmark, Germany, India, Israel and Sweden, too. Founders are warning that the bank’s failure could wipe out startups around the world without government intervention. SVB’s joint venture in China, SPD Silicon Valley Bank Co., was seeking to calm local clients overnight by reminding them that operations have been independent and stable.

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Chaos in the Banking Industry while Biden tries to ensure trust

Revelations 18:9-11 “The kings of the earth who committed fornication and lived luxuriously with her will weep and lament for her, when they see the smoke of her burning, 10 standing at a distance for fear of her torment, saying, ‘Alas, alas, that great city Babylon, that mighty city! For in one hour your judgment has come.’  11 “And the merchants of the earth will weep and mourn over her, for no one buys their merchandise anymore

Important Takeaways:

  • Bank shares plummet up to 74% in pre-market trading despite Biden’s guarantee scheme for SVB (Silicon Valley Bank) and Signature Bank – amid fears of a banking rout mount when stock market opens at 9.30am
  • First Republic Bank’s shares dropped as low as $21.50 from a high of $81.76 amid fears of a banking rout when Wall Street opens trading at 9.30am
  • Biden spoke shortly before 9am in an attempt to shore up trust in the sector after the White House yesterday guaranteed it would make SVB customers ‘whole’ and that ‘no losses will be borne by the taxpayer.’
  • PacWest Bancorp’s stock tumbled 41 percent
  • Western Alliance Bancorp’s shares slid 33 percent
  • Bank of America’s stock fell 4 percent.
  • The dollar slid too as Wall Street heavyweights such as Goldman Sachs predicted the Fed would no longer lift interest rates next week, capping the biggest three-day rally for short-dated Treasuries since 1987.

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Morgan Stanley launches Black recruitment program to boost trading unit’s diversity

By Imani Moise

(Reuters) – Morgan Stanley is piloting a program to recruit Black talent in its sales and trading division, executives told Reuters, in corporate America’s latest initiative to improve diversity after nationwide protests against racial inequality.

The Morgan Stanley Experienced Professional Program within its Fixed Income & Business Resource Management Divisions is seeking Black professionals with at least two years’ full-time work experience in any field who want to work in finance.

“As long as you have the skill set around communication, analytical abilities, interpersonal skills, and you are willing to work hard, you could have a strong career,” Derek Melvin, a managing director who designed the program, said in an interview on Wednesday.

The banking industry has been scrutinized for its lack of racial diversity since the May 25 death in police custody of George Floyd, a Black man, sparked demonstrations and prompted deep introspection at companies across the country.

That has led to fresh pledges to improve diversity and tie executive compensation to meeting related targets. However, such action has triggered concern from authorities.

Last week, Wells Fargo & Co defended its diversity initiatives after the U.S. Labor Department questioned whether they were unlawful or discriminatory.

Morgan Stanley’s program is only open for up to 20 people. Melvin said he hopes the program, if successful, will be replicated across the firm’s institutional securities business.

That division, the bank’s largest breadwinner, reported a 21% jump in revenue for the third quarter on Thursday, helping the bank breeze past Wall Street estimates.

Successful applicants will get a month of training before doing 10-week rotations on different trading desks, leading to a full-time job.

Feedback on the program so far has been overwhelming, Melvin said. Since advertising it at the end of September, his team has received over 700 applications. Successful applicants will be chosen by the end of the year.

“Our expectations were that after a month, we’d have about 100 to work through,” Melvin said in an interview. “But we’ve been surprised to the upside here.”

(Reporting by Imani Moise; Editing by Christopher Cushing and Paul Simao)