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The Institutional Risk Analyst

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Writer's pictureR. Christopher Whalen

Profile: Bank of Hawaii & QE

Updated: 5 hours ago

November 20, 2024 | Premium Service | Tomorrow the The Institutional Risk Analyst will be speaking at the 10th annual IMN Mortgage Servicing Rights forum in beautiful Brooklyn, NY. If you are attending, please do say hello. Our panel is in the afternoon tomorrow, “Company and MSR Platform Acquisitions and Dispositions: Will the Consolidation Continue?”



Below we take a look at Bank of Hawaii (BOH), which a reader of our Premium Service asked us to profile. We wrote about BOH years ago in The IRA when it was one of the best performing banks in the US, but no more. Of note, Chain Bridge Bancorp (CBNA) went public last month, the first US bank IPO since 2022. But first let’s take a question from a reader of The IRA named D:


“My niece is graduating this spring 2025 with a finance degree from Boston College. Already had a few job offers and thinks she’ll take the job in NYC. 120k/yr plus bonuses to start. My wife and I want to help her purchase a co-op apt instead of renting. There seems to be more inventory on the market right now at 300k range. Can you direct me to someone in the know who can give us the pros and cons of purchasing a co-op vs renting in Manhattan?”


First, talk to a realtor to get a sense of the market. Second, go for a condo before a co-op. Third, read our friend Jonathan Miller of Miller Samuel if you want to know what is going on in Gotham real estate. Yes, there is a lot of inventory in New York City in the $300k range, but for a reason. Parking spaces and storage lockers in Manhattan go for $300k. The median price for a NYC condo was over $1.1 million in 2023 or about the same as our four-bedroom house in Sleepy Hollow.

 

With mortgage rates near 7% and a lot of questions about the future of NYC, we’d be inclined to rent because at least you know your monthly cost. With a condo at the bottom of the price range, there is a lot of supply competing with you when you want to sell. Renting may be more expensive, but with a condo you may have a higher total monthly cost including all of the extras. Do the numbers.


Also, renting means you are short NYC real estate and, more important, progressive insanity. The big risk in New York real estate is the politics of a city than can never be “affordable.” If you rent, you can exit quickly if the city’s fiscal situation deteriorates or the politicians again decide to pander to the mob. During the COVID lockdown, let’s recall, Mayor Bill “Red” Deblasio attacked the police and gave the streets over to crazy people. If you own residential real estate in Manhattan, you are a hostage to progressive politics.  Notice what is missing in the photo below from 2021: people.


Central Park South from Columbus Circle

Thursday January 7, 2021  19:00 ET


Since the market surge after the November election, the equity markets have been going sideways due to mixed earnings results and new data that suggests future interest rate cuts may be on hold. In the past three months, the leaders in the WGA Bank Top 25 have been mid-cap names rather than the giant banks. Over the past month, the leaders in our 107 bank test group have included none of the top-10 banks by market cap. Subscribers to the Premium Service have access to the constituents of the index and the weightings. 



Bank of Hawaii

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