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
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The Institutional Risk Analyst
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Banks | Markets | Finance
R. Christopher Whalen
May 21, 20232 min read
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
989 views
R. Christopher Whalen
May 15, 20236 min read
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.
3,858 views
R. Christopher Whalen
May 7, 20236 min read
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?
3,508 views
R. Christopher Whalen
May 4, 20234 min read
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.
2,416 views
R. Christopher Whalen
May 1, 20236 min read
The False Narrative on First Republic Bank
Until Chairman Powell comes clean with the Congress and the American people, more banks will inevitably fail.
5,205 views
R. Christopher Whalen
Apr 12, 20238 min read
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
1,032 views
R. Christopher Whalen
Apr 9, 202312 min read
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
4,219 views
R. Christopher Whalen
Apr 3, 20236 min read
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
4,364 views
R. Christopher Whalen
Mar 30, 20236 min read
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.
2,254 views
R. Christopher Whalen
Mar 26, 202310 min read
Update: New York Community Bank
We liked the NYCB + Flagstar story prior to the transaction with the FDIC for the assets and deposits of Signature Bank.
1,155 views
R. Christopher Whalen
Mar 23, 20236 min read
FOMC Doubles Down on Market Risk
Treasury Secretary Janet Yellen and Fed Chairman Jerome Powell are another bank failure or two away from returning to the private sector.
2,927 views
R. Christopher Whalen
Mar 21, 20235 min read
Winners & Losers in the New Gilded Age
Mark Twain called Washington ''the grand old benevolent National Asylum for the Helpless'' in his classic "The Gilded Age."
1,766 views
R. Christopher Whalen
Mar 17, 20238 min read
Mark-to-Market on Bank America; Update on Credit Suisse & Guild Holdings
We recently added Western Alliance (WAL) and GHLD to our portfolio
2,718 views
R. Christopher Whalen
Mar 14, 20238 min read
QE & the Yellen Banking Crisis
By any reasonable standard, Janet Yellen should have already resigned, but not in the strange world of Washington.
3,157 views
R. Christopher Whalen
Mar 11, 20236 min read
Who Killed Silicon Valley Bank?; The IRA Bank Book Q1 2023
Last week not a single member of the Big Media managed to ask Fed Chairman Jerome Powell about the state of the US banking system
8,991 views
R. Christopher Whalen
Feb 27, 20236 min read
QT & Powell's Liquidity Trap
The Federal Open Market Committee has arguably lost control of monetary policy and has placed America's banks in grave risk.
8,675 views
R. Christopher Whalen
Feb 23, 20237 min read
The Return of Credit Risk
Fact is, Dr. Brainard has primary culpability in the growing economic pain being felt around the country.
2,384 views
R. Christopher Whalen
Feb 16, 20235 min read
Will We See Double-Digit Residential Mortgage Rates -- Again?
As the FOMC moves short-term rates towards 6%, we expect to take another run at double-digit rates for prime residential mortgage loans.
1,427 views
R. Christopher Whalen
Feb 3, 20239 min read
Two Inflation Narratives; Credit Suisse & Ginnie Mae MSRs
The big take away from Q4 2022 earnings is that credit expenses are headed higher and at a brisk pace
842 views
Christopher Whalen
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