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Evan
@evangower
Banking in Crisis 🏦 The banking crisis has already inflicted massive monaterry losses and casualties to names such as Silicon Valley Bank $SIVB First Republic $FRC and there could be more on the horizon. What's happening: PacWest Bancorp $PACW plan to explore strategic options while reports suggest Western Alliance Bancorpelation $WAL are looking at options too. Though deposit flows have been steady for both companies compared to Silicon Valley Bank and First Republic, fear and short sellers diving in have hammered shares prices for both companies ($PACW down -50%, $WAL down -69% ytd) and has made concerns they might be put in recievership just like First Republic. By the numbers: The four regional institutions that collapsed, Silicon Valley, Signature, Silvergate, and First Republic have seen massive losses and have wiped out bondsholders and shareholders. Total losses - $54 billion Market cap erased - $46.9 billion Bonds/preferred shares losses - $7.5 billion Remaning share value - $725 million What their saying: Financial heavyweight hedge fund billionaire Bill Ackman is among those warning of more banking stress to come. Speaking before PacWest’s news, Ackman said he thought the whole US regional banking system is at risk.“Confidence in a financial institution is built over decades and destroyed in days,” Ackman, chief executive officer of Pershing Square, said on Twitter. “As each domino falls, the next weakest bank begins to wobble.” To note: When its comes to banks failing, the presedent has been set as bigger banks can lie in wait for the FDIC to take over and buy their assets for a steep discount. JPMorgan $JPM will make a $10.6 billion payment to the FDIC for First Republic's portfolio, which has about $173 billion of First Republic's loans, $30 billion of securities and $92 billion of deposits. First Republic at the peak was valued north of $40 billion. The bottom line: Don't expect a return to normalcy in the next few weeks for the banking industry, things are still in chaos, more banks could fail and it will take time for the whole industry to recover from this turmoil. Sources: Bloomberg, Moring Brew, Reuters, Yahoo Finance #bankingcrisis #financials #sivb #frc #marketmovers #stats
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