First Take on FDIC Bank Data
If we assume that asset returns will continue to rise, but that bank funding costs will rise 5x asset returns, then US banks have a problem
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The Institutional Risk Analyst
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Banks | Markets | Fintech
Christopher Whalen
R. Christopher Whalen
- 3 days ago
- 7 min
Calculate the WAC of Bank of America
If you believe that the Fed is going to keep interest rates at or above current levels through to 2024, then we have a problem....
2,234 views
R. Christopher Whalen
- May 25
- 8 min
Interest Rates, MSRs, Mortgage Putbacks & FICO Scores
Persistent talk about a 5.5% 30-year mortgage rate later this year is badly wrong as TBAs flip from 5.5% to 6% coupons for delivery in June
1,013 views
R. Christopher Whalen
- May 23
- 7 min
PacWest Bancorp & Fed Hawks
To survive long-term, both WAL and PACW need to get that beta back down below 2 and closer to 1, but the hawks on the FOMC may not cooperate
2,224 views
R. Christopher Whalen
- May 21
- 2 min
Mortgage Rates Headed for 7% as Residential Defaults Slowly Rise
We think that further Fed tightening, plus sales of MBS from FDIC and banks generally, may force mortgage rates higher into the 7% range
884 views
R. Christopher Whalen
- May 17
- 5 min
Banks, Commercial Real Estate & Credit
The Fed's 5.5% increase in short-term interest rates has thrown the pricing for trillions of dollars in real estate into disarray.
1,058 views
R. Christopher Whalen
- May 15
- 6 min
Fed Asymmetry Threatens Credit Crisis
The price volatility injected into markets by the Fed is a primary reason why the FDIC cannot easily find buyers for smaller banks.
3,391 views
R. Christopher Whalen
- May 10
- 8 min
Is USA still a "AAA" Credit? Really? Update: Rithm Capital
When interest rates eventually fall those late vintage mortgage loans with 6% coupons will evaporate like spring snow in the sunshine
1,449 views
R. Christopher Whalen
- May 7
- 6 min
Measuring Powell's Bank Rate Shock
Q: What happens to net-interest margin for banks when the rate of change in funding costs doubles or more in a single quarter?
3,335 views
R. Christopher Whalen
- May 4
- 4 min
Banks, Interest Rates & Fed Chairs
Imagine how President Joe Biden will react if Chair Powell needs to announce formal limits on access to US bank deposits.
2,206 views
R. Christopher Whalen
- May 1
- 6 min
The False Narrative on First Republic Bank
Until Chairman Powell comes clean with the Congress and the American people, more banks will inevitably fail.
5,029 views
R. Christopher Whalen
- Apr 30
- 6 min
Update: Mr. Cooper & PennyMac Financial
Both PFSI and COOP are navigating the current market well, but we have questions about where the former is headed.
1,154 views
R. Christopher Whalen
- Apr 26
- 6 min
Who Killed First Republic Bank?
The Treasury and Fed cannot admit fault for fear of bringing the whole house of cards crashing down.
3,206 views
R. Christopher Whalen
- Apr 24
- 6 min
Commercial Real Estate & Bank OZK
Banks that do not aggressively reprice liabilities and assets as OZK did in Q1 2023 may be left behind.
1,136 views
R. Christopher Whalen
- Apr 19
- 7 min
The Bank Deposit Run Is Not Over
The funding crisis affecting US banks is not over and very definitely not limited to smaller banks.
4,510 views
R. Christopher Whalen
- Apr 17
- 4 min
Funding & Credit: Q1 2023 Bank Earnings Takeaways
The issue is not whether your bank is getting smaller, but whether credit expenses are being managed as funding costs inevitably rise.
1,104 views
R. Christopher Whalen
- Apr 12
- 8 min
Q1 2023 Bank Earnings: Lower for Longer | JPM USB C WFC BAC
Given that the US Treasury is paying 4% for 90-day T-bills, you can see how far banks have to go to become competitive on rates
1,019 views
R. Christopher Whalen
- Apr 9
- 12 min
Powell's Duration Trap, Banks and the US Treasury
The Fed by definition cannot make a profit and is always an expense to the Treasury, thus operating losses are a expense to the taxpayer
3,914 views
R. Christopher Whalen
- Apr 3
- 6 min
Update: Charles Schwab (SCHW); Sagent Presentation
Most major banks grew larger during quantitative easing. Now many of these banks will shrink in terms of assets and also earnings in Q1 2023
4,100 views
R. Christopher Whalen
- Mar 30
- 6 min
QT, Interest Rates & Bank Solvency
At the Fed, because “confidence” is considered a factor in “policy,” it is OK to fib and obfuscate about the true cost of monetary policy.
2,208 views
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