Regional Banks in the Spotlight
Submitted by
CalculatedRisk on Mon, 07/14/2008 - 7:59am (55 comments)
in
Shopping at Amazon?
Wait! If you click on the Amazon banner link at the top of the page first, HCN will get a percentage of anything you purchase for 24 hours!
Open predictions
Our local book authors
User login
Who's online
There are currently 36 members and 176 guests online.
Currently online
- CalculatedRisk
- Weeping Willow
- dr munch
- Lobbyist Ben Dover
- Rob Dawg
- traderwalt
- Dr. Funkenstein
- poic
- Miffed
- Spatch
- dryfly
- Tom Stone
- glimmerman
- energyecon
- aleister perdurabo
- Which is worse - bankers ...
- Comrade Janošik
- Substace Over Form
- Black Star Ranch
- some investor guy
- ResistanceIsFeudal
- DCRogers
- Comrade Elmer Fudd
- TJ and The Bear
- adornosghost
- Former Idealist
- Gatsby
- pythia
- MaryAnn
- RayOnTheFarm
- NorthStar
- black dog
- RE
- gruntled
- JP
- steelhead
Recent Recommendations
Nervous-est!
Oh my SKF! :>)
The bank runs have begun. I was talking to a very conservative buy and hold kind of a guy yesterday and he was asking me how to convert and distribute his cash positions to get full FDIC protection.
Looks like a tough Monday ahead.
So NatCity had the NYSE halt its trading to issue a press release saying, "Don't worry; everything's fine!"
Fascinating.
P.S. Hey CR, maybe your metaphor should have been "crosshairs" instead of "spotlight".
Better get your 4 percent, FDIC insured Wamu CDs while you still can!
Nemo,
Instead of crosshairs, I think "blast radius" may have been more appropriate.
Nemo, good suggestion. I had an image of cockroaches in a spotlight scrambling for cover ... I see WaMu issued a statement too about no unusual depositor activity.
Best wishes.
Jim Rogers on Bloomberg today.
Bloomberg News Video
I shorted some ZION today.
Time for Mr. Kerry K. Killinger to issue a statement about how Wamu is well-capitalized.
We need some Northern Rock type photos outside all of these banks...
National City: no unusual depositor, creditor activity
By Alistair Barr
Last update: 12:13 p.m. EDT July 14, 2008Comments: 5
SAN FRANCISCO (MarketWatch) -- National City Corp. (NCC:National City Corporation
News, chart, profile, more
Last: 3.14-1.28-28.96%
12:21pm 07/14/2008
Delayed quote dataAdd to portfolio
Analyst
Create alertInsider
Discuss
Financials
Sponsored by:
NCC 3.14, -1.28, -29.0%) said on Monday that it's experiencing no unusual activity by depositors or creditors as the regional bank tried to calm investors. At the end of last week, the bank said it had more than $12 billion of excess short-term liquidity. After raising $7 billion in new capital earlier this year, National City has one of the highest Tier 1 regulatory capital ratios among large banks, the company added. National City shares fell 28% to $3.20 on Monday before being halted. Shares of Washington Mutual (WM:WM
News, chart, profile, more
Last:
Delayed quote dataAdd to portfolio
Analyst
Create alertInsider
Discuss
Financials
Sponsored by:
WM, , ) , another large bank, dropped 26% to $3.66.
Per Paulson (just announced) "THe US will buy shares of NCC..."
you better linky that sheeet crispy!
*that was a joke - BTW
crispy&cole writes:
*that was a joke - BTW
Pretty sad that no one can tell anymore.
that noise behind you is the SEC coming after you for rumors...a bit jumpy today.
"that was a joke - BTW"
The joke today is tomorrow's news.
BBT kicked down 7% on news "Mount Airy bank robbed for second time this year" -- Winston-Salem Journal.
Or maybe they're all getting tarred with the same brush.
Somebody posted here a while back about picking up good regionals in an earlier recession at 4 times earnings. We're not there yet but getting closer.
UGHH.
Although I would not be surprised if they were working on some new scam
MLEC
Super SIV
etc....
Benny better get the bailout plan in place. Dumbest fool at the poker table.
Re: "I see WaMu issued a statement too about no unusual depositor activity.
"
Me doth think the ladies need to get better at PR and not protest about being so innocent!
regarding false rumors being damaging, where can we go to file the claim with the SEC on the Fed spokesperson who incorrectly denied late Friday that Bernanke had promised Freddie Mac access to the discount window if necessary?
I was surprised to read that something like 1/3 of the IndyMac depositors were over the $100k FDIC limit and will take losses on their deposits. To the extent that's repeated elsewhere in the financial system, it detracts heavily from stability . . . .
Merrill Lynch & Co Inc · 10-Q · For 3/28/08
http://www.secinfo.com/dsvr4.t51a.htm
Level 3 assets are primarily comprised of:
mortgage related positions, both residential and commercial, within trading assets of $9.3 billion, derivative assets of $20.6 billion and loans measured at fair value on a non-recurring basis of $12.5 billion;
credit derivatives of $18.0 billion on corporate and other non-mortgage underlyings that incorporate unobservable correlation;
corporate bonds and loans within trading assets of $6.2 billion (including $1.6 billion of auction rate securities);
private equity and principal investment positions of $4.3 billion within investment securities;
equity, currency and commodity derivative contracts of $7.6 billion, that are long-dated and/or have unobservable correlation.
Level 3 liabilities are primarily comprised of:
mortgage related derivative liabilities, both residential and commercial, of $25.0 billion;
credit derivatives of $16.9 billion on corporate and other non-mortgage underlyings that incorporate unobservable correlation;
equity and currency derivative contracts of $7.5 billion that are long-dated and/or have unobservable correlation;
structured notes classified as long term borrowings of $5.7 billion with embedded equity and commodity derivatives that are long-dated and/or have unobservable correlation; and
non-recourse debt arrangements classified as long term borrowings of $1.7 billion related to certain non-recourse long-term borrowings issued by consolidated SPEs.
To WaMu to quote the Bard "Me thinketh thou protestest too much"
A run on the banks on Bastille Day? Oh, how history rhymes.
Depositors could storm the banks only to find that all the money they thought was there, is not in fact there. And all the prisoners that were thought to be in the Bastille? Nope, they weren't there, either.
Perhaps the fractional reserve system should be on the guillotine.
I've made two short calls on regional banks.
First Mariner in MD: Will First Mariner Bancorp (FMAR) be the next small bank to go bankrupt? « Greg’s Law & Economics Blog
And First Federal in CA (down 30% today, down 80% since I made my call 5 weeks ago):
9 Reasons to Short FirstFed Financial -- Seeking Alpha
By the time this is played out, I think the banks that fail first will turn out to have been the safest. Later failures, when the FDIC runs out of cash, might be worse for depositors.
Kindof like being in the first wave of engineers/brokers/etc to get laid off - they usually can find jobs with other companies. Later waves have no place to go.
Just a thought.
For accuracy:
"The lady doth protest too much, methinks."
Hamlet Act 3, scene 2
WaaaaMuuuuu now down 31% @ $3.43. Ouch.
Dr. N
Why pick on me....huh??
I waited in line all day to get my money out of America
Just did a scan across Schwab's CD purchase feature and found that Wachovia is offering the highest rates for almost all maturities.
I'm a sheeple and I'm worried-
I have my personal and business banking at M&T Bank. IT's all under $100,000 or FDIC guraantee.
So. . . . anyone have any thoughts on what I should do?
Is M&T on the banks going bust list???
Thanks.
SK
I don't mean to promote my bank, but I'm wondering what everyone in this forum, including CR & Tanta think of Flagstar Bank (FBC)? The bank is posting some good numbers, the stock is going up, but nobody in any media seems to want to mention it. Why? FBC - Flagstar Bancorp Inc Stock quote - CNNMoney.com
dammit I was going to short WaMu first thing this morning too... too late, hoping for a dead cat bounce now...
"No unusual depositor activity"
Ahh, but what about withdrawor activity???
think of Flagstar Bank
never seen a branch office in my travels so why should I care?
Hi everyone, I'm a longtime lurker, first time poster, and this thread has me a little worried - enough so that I have a question hopefully someone will answer. And just so you know, I have absolutely no background in real estate or finance - I'm a regular schmoe who loves the blog - so please forgive me if my question sounds naive. Anyway, if I have money in a WaMu savings account, is that money safe? If not, what to do with it and how soon? Thanks in advance.
Troy -- Flagstar bank is in Troy (your namesake), MI and is a regional bank. http://www.flagstar.com That said, why isn't anybody including Flagstar in the regional bank stories especially since it's located in a similar marketplace like a National City and continues to lend nationally under the federal charter? Just because you haven't been to Michigan, Indiana, or Georgia doesn't mean this isn't something to look at. It's bucking the "trend" that the media has highlighted of regional banks sucking wind. That said, I wonder why it's not garnering any attention.
Anyway, if I have money in a WaMu savings account, is that money safe?
If it's under $100,000, then yes, it's safer than under your bed.
The whole point of the FDIC is to avoid bank runs so if I were you I'd just let the savings account be, assuming you're under $100,000.
@Trail
BBT just raised their dividend, are they just trying to keep the baloon aloft, or are they gonna make it through with minimal bumps and bruises?
Dave E:
Re: Flagstar
I stopped by there today. The account Rep said execs worked over the weekend to to publish a positive press release this AM after the Indymac failure was announced late Friday. Stock is up 10% today.
Truth or damage control?
I report, you decide.
.
Last one to the bank run is a rotten egg!!!
Tripleplay -- Interesting theory. You do have to consider your sources. Quite frankly, I'm not trying to pump up the stock price. I could care less just so long as I still have an employer and a bank to put my loans through. But I think someone has to look at this and wonder what's going on? Is what this (probably disgruntled) account exec is saying true? I have no clue. All I know is all of the disclosed insider trading has been on the purchase side dating back to November 2007. Something has to be going right and I'm wondering why nobody is looking into it. I'm not making any stock suggestions. If anything, it would be nice to know from an objective source (and this account exec is far from objective) what's going on here. Am I stupid to want to know what's going on with the company I work for?
But I think someone has to look at this and wonder what's going on?
Financial institutions that tried to do a replay of the loose lending of the 80s are going to find themselves busted up like the S & L crisis.
If Flagrock or whatever has a solid book they'll probably survive fine unless this decade and/or next turns out to be GD2.
Well, your savings account up to $100,000 is safe as long as the FDIC doesn't have to draw down its funds to zero before they get to your bank. Not a likely event, but not inconceivable.
$52 Billion backing up $4.x Trillion? Wouldn't have to go too deep to tap that.
Wouldn't they just crank interest rates to attract what they need to cover?
Jett - My gut is that BBT will be a survivor - but there will be plenty of time to buy, no need to jump in until things get clearer. The dividend increase is largely symbolic, they take pride in raising the dividend each year. These conservative old-line Moravians in Winston-Salem make good bankers - just look at Wachovia til the minute they got taken out by First Union and moved to Charlotte...People with connections to NC banking know that Wachovia is Wachovia in name only - no connection to the old bank in spirit...First Union wanted to capitalize on the reputational value when they bought out Wachovia (First Union's name had negative value...)
what are the financials going to do in the last hour of trading?
I would suggest The Bank of Kentucky BKYF price to earnings under ten.
DaveE,
For what it is worth, I have a buddy who worked for subprime mortgage company as a loan officer and said Flagstar was a huge lender for them for A paper.