Likely already baked in to the market, as Powell has generally been telegraphing his rate hike plan.
I do agree that Janet Yellen’s communication about a June 1 debt default is what’s different/additive today vs yesterday when we had the first republic failure/fire sale.
One would think, but I tend to be literally on the market trading most days when I’m not working at school or traveling and it’s common for the day before a hike to go down a bit. It can recover when the hike is made if it didn’t go deeper than expected, but for whatever reason, there’s a correlation the day before.
That said, I think people are figuring out the two sides might continue their spat and starting to get worried.
Yes, and June 1 is soon. And McCarthy is out of town right now, and Biden is going to Japan and Australia later in the month. Hope the May 9 meeting happens and negotiations start in earnest.
A slight dip is common. However, this morning several regional banks are down between 20%-35%. That’s a lot more than a dip and might indicate another failure is imminent. The SEC has had to put circuit breaker stops on several bank stocks this morning. 
Please choose what is weighing down the banking center:
A- Pending Fed decision that will likely result in raised rates and further declines in hold to maturity mortgage securities.
B- One less “White Knight” to absorb troubled banks post JPM/FR. Fear continues and becomes self perpetuating.
C- Looming debt ceiling noise is the best case with worst case that we default. No longer impossible to consider given the vitriol from both sides.
D- All of the above
In my opinion it is a cumulative result of asymmetric news. Lots of confirmed and likely bad news on the horizon with no definable likely near term good news. Cash suddenly looks pretty good at these money market rates even for large institutional investors.
You worded my thoughts better than I did.
I’m glad I’m not invested, nor have ever been, in any banking stocks.
Congress is scheduled to be in session for 12 days between now and June 1.
I went multiple choice but as is the case in life these days everything is test optional.
A page on the legislative and regulatory background of the SVB and FRB failures:
https://www.fastcompany.com/90889743/what-went-wrong-at-first-republic-bank
Briefly:
Not in the above page, but it looks from the banks’ older financial reports that First Republic Bank crossed the $100 billion level in 2019, and Silicon Valley Bank crossed that level in 2020. They crossed the older $50 billion level in 2015 and 2017 respectively.
I neglected to include the looming concerns regarding banks exposures to commercial real estate loans and mortgages (particularly in the office space sector) in cities such as Seattle, LA,Chicago, NY, and SF. These cities are still experiencing occupancy rates of between 30-50%.
Consequently a significant number of these loans are materially underwater and will ultimately require restructuring or be defaulted upon.
Either way these are big numbers and will likely hit the big banks. I think this will weigh on any upside in the bank sector until some end is in sight which will likely take the balance of this interest rate cycle.
Sorry to be all doom and gloom.
Probably the first of many.
IMO, the root cause of the bank failures is inflation. Get that down fast, and the bank issue – being underwater – goes away.
(Of course, the Fed was really slow to start addressing inflation and has been slow with the rate hikes. Meanwhile, federal spending continues to increase and contribute to higher inflation.)
Bank failures are always interesting to see what happens next. It’s very predictable. Every time they happen, there’s fewer and fewer banks left, and the big banks just get more and more massive as they swallow these smaller banks whole. As they get bigger, I trust them less and less. That’s why I use a local credit union.
Are they better?
National Credit Union Administration (NCUA) credit unions had seven conservatorships/liquidations in 2022 and two so far in 2023.
In a previous thread you began titled “Do you trust banks” you wrote…
I understand a prudent consideration for who you use for financial services and being cautious with the institutions where you deposit hard earned money.
With that said you seem to be attributing some sort of nefarious or conspiratorial intent. What exactly do you think the banks are doing with your data?
On the other thread you erroneously suggested the First Republic sale was a taxpayer funded bailout so I am trying to understand if there is any real basis for your concerns or if as you suggest you are just paranoid.
In uncertain and tumulus times it is normal to be confused and feel vulnerable it is not however appropriate to make unfounded accusations based on demonstrably inaccurate facts of illegality against an entire profession.
Good point, no guarantees, but fingers crossed. I won’t give a dime to greedy, evil, satanic, Chase/Bank of America 
I used to work in banking for 10 years. All the conspiracies you heard are all true, and are 3x worse. I can tell you as someone who worked for a banking conglomerate (I shall not name) they can’t be trusted. 
FDIC and government control DO go hand-in-hand no matter what they love to tell you wink-wink!
Weird. I know people who work in banking now and have for the last couple of decades who don’t share your beliefs. They’re out to earn money, no doubt, but so is practically every business.
Nonetheless, I’ve nothing against credit unions if you prefer those. I belong to two currently - and one bank, plus credit cards with a couple others.
Actually if memory serves you were a self described in past posts low level mortgage originator during the run up to the real estate crash at which time your job ceased to exist. Thankfully you found a second career as an IT professional and programmer. I understand how that could produce a degree of bitterness.
But let’s be honest you didn’t understand how the FDIC is funded having repeatedly stated it was from taxpayers funds. Now while offering no examples you are coming up with conspiracy theories and name calling and saying literally trust me wink wink.
You won’t even specify your specific accusations much less provide a concrete example. Reminds me of a certain post election Rudy Giuliani press conference😀
I think if you had the goods you would spill the goods.
I have been a banker for 30+ years and while I have come across a few crooks, the vast majority of people I have worked with are principled professionals who work hard. Nothing more and nothing worthy of name calling.
True Congress isn’t directly allocating funds to the FDIC account so no taxpayer money there.
But taxpayers are depositors and borrowers so it’s likely some of the fees they pay to the bank on their accounts and loans help fund the payments banks make to the FDIC. Ultimately we all pay in some way for these failures.