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The hell of it is...with mandatory EFT for payroll and other income, there's not a practical way to de-bank one's self.Bail-ins support banks
Moral hazard unleashed
Socialized losses
... Savage.
FDIC honcho faces Senate panel today...
Simon White - Bloomberg macro strategist said:... over the last two years small banks have doubled down on their CRE exposure to almost a third of assets - with barely a pause after SVB – while large banks have reduced theirs down to 6.5%.
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Not all CRE is bad, and not all banks will find themselves in trouble from souring commercial loans. But it is highly conceivable some will. Those with most exposure to office space, given rising delinquency rates, and to multifamily residential due to collapsing apartment prices, are a good place to start.
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Furthermore, banks that make lots of loans quickly often run into issues down the line as underwriting standards can slip in haste (or are willfully overlooked to gain market share). Thus another first approach is to look at the banks who have seen their exposure to CRE rise the most since SVB’s bankruptcy.
Perhaps not uncoincidentally, some of the most shorted regional banks are those that have seen the fastest growth in commercial real estate loans, including Arkansa-based Bank OZK and BOK Financial Corporation.
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Einstein’s definition of insanity was doing the same thing over and over again and expecting a different outcome. Smaller banks in the US continue to lose money on commercial real estate, face heavy losses on securities portfolios as yields push higher, and are just as exposed in the aggregate to bank runs from uninsured deposits. Sanity thus demands being ready for more bank failures.
George Gleason, a lawyer at the Rose Law Firm, bought Bank of Ozark in 1979 when it had $28 million in assets and changed its name to Bank of the Ozarks. In 1994 the bank had five locations but began expanding. The headquarters moved to Little Rock in 1995Just in time. Pretty sure we've discussed Bank OZK before. Perhaps not. They have an outsized CRE loan position.
Well today Citibank analyst just lowered their rating (from a March 2024 Buy) ALL the way down to Sell. These guys Never put out a sell. Watch this bank closely.