The Institutional Risk Analyst

GS is a securities dealer first and foremost and has no comparative advantage as a bank.

Our view is that the BKI purchase is a horrible deal for ICE shareholders, a value killer of epic proportions

The risk-adjusted return on capital for BK is negative and probably lower than Goldman, the highest risk large US bank

The big take away from Q4 2022 earnings is that credit expenses are headed higher and at a brisk pace

Ally is still more finance company than bank and really has no core deposit base worthy of the name.

We hear in the channel that regulators are making their views of future loss probabilities very clear in guidance to the top banks

The Fed’s de facto embrace of inflation encourages misallocation of economic resources on a grand scale....

But nothing lasts forever in mortgage land or in financials. Stay tuned and pay attention to LT rates and spreads...

Will Fannie Mae and Freddie Mac require another federal rescue in 2023 or beyond?

Like most nonbanks (and Goldman Sachs is predominantly a nonbank), volumes are falling and funding costs are rising.

Whether we are talking about corporate credit exposures or housing, the short trade may be the place to be over the next year.

Rapidly rising interest rates in Q3 2022 pushed down the tangible capital for the US banking industry to negative $1.9 trillion

The US banking industry has been rendered insolvent by the Federal Open Market Committee

There are literally dozens of banks in the US made insolvent by the policy moves of the FOMC over the past year.

Little attention is being paid to the collateral damage being done by the FOMC to the debt capital markets

Will the market risk created by quantitative tightening (QT) tip over a large bank or nonbank financial firm?

A number of readers have asked us to talk about the winners and losers among large banks in the current interest rate environment.

The nightmare scenario in the government loan market is that FHA loan delinquency rises to the point where issuers become insolvent

We expect to see reasonably strong earnings for commercial lenders in Q3 2022 as loan yields slowly rise...

Investors who were buying large caps at 2x book value a year ago are now running away from bank stocks just as fundamentals improve...