from thefreeonline on 13th MarcH 2023 By Wolf Richter  for WOLF STREET  13 Comments

Banks as stock-pump schemes in the era of consensual hallucination.

More US Banks CRASH- Bank Runs escalate in Panic, The Fed bailed out 100’s of Billions in SVB but shareholders LOSE THEIR CASH! + LATE NEWS

First Republic Bank, headquartered in San Francisco, and Western Alliance Bank, headquartered in Phoenix, are on the forefront of the regional banks that haven’t collapsed yet. Their shares continued their plunge today as trading was halted on and off. Other bank stocks got hammered too, but not to this extent.

First Republic is intricately tied to the Free-Money party in Silicon Valley and San Francisco – “a leading private bank and wealth management company,” it calls itself. The stock had doubled from 2019 to peak consensual hallucination in November 2021. It had quadrupled from 2014 – a bank stock! Which shows how crazy this consensual hallucination was.

>U.S. regional banks First Republic and PacWest sink | Fortune

And because it was tied to this party, it is tied to the end of the party. Since the high in November, the Nasdaq Composite has plunged by 30%. The shares of many startups that had gone public via IPO or SPAC collapsed.

Cryptos plunged. Silicon Valley Bank, which was instrumental in all this, collapsed on Friday.

Many people whose wealth was tied to startups are finding themselves less wealthy. And First Republic catered to them.

Shares [FRC] collapsed 61% for the day, and were down by 86% from their high in November 2021, therefore making it into my glorious pantheon of Imploded Stocks (data via YCharts):

https://1853789679cc78108efdfda354d4ecf5.safeframe.googlesyndication.com/safeframe/1-0-40/html/container.html

Note that shares, currently at around $31, are back where they’d been in 2013, which really isn’t a biggie – why should shares of a bank quadruple every four years? A bank is a government-regulated taxpayer-backed financial utility, not a stock pump scheme.

First Republic experienced an intense run on the bank by the same folks it so energetically catered to: the wealthy.

They were yanking their cash out of their bank accounts at First Republic by the millions of dollars at a time – same thing that accelerated the fall of Silicon Valley Bank when cash-rich companies, often pushed by their venture-capital investors, yanked their millions and hundreds of millions out.

On Sunday, the Fed came out with a program to shore up teetering banks like First Republic, by providing additional loans through a new facility.

Also on Sunday, First Republic announced that it had received additional funding from JPMorgan, on top of the funding it had from the Fed, and “continued access to funding through the Federal Home Loan Bank.” It said that its “total available, unused liquidity to fund operations is now more than $70 billion.”

First Republic Bank falls nearly 70%, trading halted after collapse of SVB, Signature

First Republic Bank is not a conservatively run bank. It represents the worst excesses in the Free-Money party.

During the Financial Crisis, Bank of America ended up with it when it purchased Merrill Lynch, which had acquired it in 2007. In 2009, Bank of America sold First Republic to a group of investors that included private equity firms Colony Capital and General Atlantic.

They sold it to the public via an IPO in December 2010. And then the Free Money party began.

>Full List of Bank Shares That Halted Trading as Panic Spreads

The primary purpose was to pump up the stock price.

First Republic went after the wealth management and private banking business, particularly in Silicon Valley and San Francisco, and then spread out from there.

It provided all kinds of services, such as making loans to startup founders who were sitting on illiquid shares that were at the time highly valued – by Softbank, LOL.

If they wanted to plow several million into a fancy home or needed cash otherwise, they could pledge their illiquid shares as collateral.

But the Free-Money era is over.

Startup valuations have plunged, venture capital has dried up, Softbank’s Venture funds have taken huge losses, many startups are facing an existential crisis and will fold, and they’re laying off people to lengthen the time they can operate, and shares of many startups that went public via IPO or SPAC have collapsed.

Western Alliance Bancorp is another magnificent stock-pump mirage of the Free Money party.

Its shares more than doubled between early 2020 and peak consensual hallucination in November 2021, and they multiplied by a factor of six since 2014 – a bank stock, for crying out loud!

>Bank Runs Set To Accelerate As Fear And Panic Spreads 13th March

Its shares [WAL] plunged 47% today and since the high in November 2021 are down by 79%, thereby making it into my pantheon of Imploded Stocks.

Like Republic Bank, the chart of Western Alliance shows what kind of stock-pump scheme it was in the era of consensual hallucination (data via YCharts):

Western Alliance, like Silicon Valley Bank, is heavily focused on catering to businesses through various subsidiaries in different Western States, including Western Alliance Bank.

Its subsidiary Bridge Bank in the San Francisco Bay Area is into “startup banking – tech,” and also caters to companies in commercial real estate, biotech, etc. Yup.

Western Alliance too was hit by a magnificent run on the bank.

On March 10, when Silicon Valley Bank collapsed, Western Alliance released “updated financial figures” to show that deposits “remain strong,” liquidity “remains robust,” and capital remains “strong,” with various numbers attached, upon which its shares plunged.

>Bank Runs Set To Accelerate As Fear And Panic Proliferate 13th March

This morning, Western Alliance issued an “updated” 8-K filing with the SEC, which included this statement:

“Since the statement we released last week, Western Alliance has taken additional steps to strengthen its liquidity position to ensure that we are in a position to meet all of our client funding needs, including increasing our borrowing capacity.

As of this morning, cash reserves exceed $25 billion and are growing, while deposit outflows have been moderate. Including accounts eligible for pass-through insurance, insured deposits exceed 50% of total deposits.”

Upon which its shares collapsed 47%.!!

late news SVB Bank’s Uninsured Depositors Bailed Out. Crypto Signature Bank Shut Down, All Depositors Bailed Out.Bank Runs escalate as Panic Spreads

from thefreeonline on 13th March 2023 from Wolf Street and Banned Agency

late late news…. Another Bank Goes BUST…Signature Bank was shut down on Sunday by New York Department of Financial Services, which announced that it took possession of the bank

Full List of Bank Shares That Halted Trading as Panic Spreads

Billionaire US investor and hedge fund manager Bill Ackman on Saturday warned the US of dire consequences facing its banking sector and the broader economy following the implosion of Silicon Valley Bank (SVB), a major US lender focused on tech and startups.

Ackman wrote on his Twitter account that US authorities should not have allowed SVB to collapse without protecting all depositors. Official figures showed that only 11% of SVB’s $175.4 billion in deposits were insured at the time of the bank’s failure. note: see Late News

Many other banks were also hit already by the collapse of Silicon Valley Bank and Signature Bank, including First Republic, the 16th-largest U.S. bank with more than $ 180 billion in assets, which plunged 50% on Friday before closing with a 15% drop on the day (a 34%drop on the week).).

First Republic Shares Drop 70% as Regional Bank Worry Goes Viral 13th March

Non insured depositors will probably all be bailed out by the Fed printing billions. Investors and shareholders will lose everything. The Rating Agencies gave no warning of the collapse.

On Wednesday March 8, Moody’s, for example, still had an A3 rating on SVB Financial, owner of the now defunct Silicon Valley Bank, as it was already collapsing for all to see. Four notches into investment grade – a very respectable rating! On Friday it fell 20 notches to zero, but too late to get money out.

SVB Collapse: Roku Had $487 Million In Cash At Failed Bank

Shareholders got bailed in and face a total loss. They’re the ones who are “bailed in” automatically when the FDIC takes over. Other investors may have a partial loss.

According to the investor, with the lender’s failure “the world has woken up to what an uninsured deposit is – an unsecured illiquid claim on a failed bank.” This means that when the banks reopen on Monday, “the giant sucking sound you will hear will be the withdrawal of substantially all uninsured deposits from all but the ‘systemically important banks’ (SIBs).”

The situation will lead to an economic meltdown, as the withdrawals “will drain liquidity from community, regional and other banks and begin the destruction of these important institutions,” Ackman says, adding that “thousands of the fastest growing, most innovative venture-backed companies in the US will begin to fail to make payroll next week.”

According to the investor, US authorities should either find a buyer for SVB before the banks open on Mond… note: see update

Continue reading “More US Banks CRASH- Bank Runs escalate in Panic, The Fed bailed out 100’s of Billions in SVB but shareholders LOSE THEIR CASH! + LATE NEWS”

Hunt saboteurs have disrupted the second day of a secretive, week-long hare killing festival organised by the Somerset-based Ilminster Beagles.

from thefreeonline on March 9, 2023 by NWHSA

On Tuesday, sabs swung into action as around 30 hunters from the host pack were about to set off.

On first sight of sabs, the hunters high-tailed it back to their kennels with one of them commenting, “You’ve done the job, we’re packing up!”

The Ilminster Beagles have invited several other hare-hunting packs to hunt their ‘country’ over the course of this week. Hunt saboteurs from across the region – including specialist spotting teams – were out in force across Devon yesterday.

However, snow, sabs, or a combination of the two deterred the visiting pack from attending. Sabs will resume operations today to ensure the rest of the festival does not go ahead.

“You’ve done the job, we’re packing up!”

This is the second time the Ilminster Beagles have attempted to organise a hare-hunting festival and the second time it has ended in dismal failure.

Their March 2019 event lasted all of 20 minutes, before 50 sabs descended on their opening meet by the Ryeford Chase Bassets.

His face says it all.

Hare hunting festivals used to be common across the country, particularly for getting hounds into shape before the start of the main season.

Hunt sabs have prioritised sabbing these highly secretive events in recent years and have great success against Alston Hare Week, the Northumberland Beagling Festival, the Severn Vale Visitors Week, and several others.

Flashback: sabs bring Ilminster Hare Week 2019 to an abrupt end.

A sab spokesperson commented from the scene,

“Local people have furnished us with excellent intelligence about this so-called festival, which is due to run for the rest of the week. The fact that the Ilminster Beagles packed up immediately shows they cannot hunt legally – we stopped them on Tuesday, and we’ll stop any other pack foolish enough to travel to this event. Our advice to the packs invited to hunt and kill Devon’s hares is simple: expect us.”

late news SVB Bank’s Uninsured Depositors Bailed Out. Crypto Signature Bank Shut Down, All Depositors Bailed Out.

late late news…. Another Bank Goes BUST…Signature Bank was shut down on Sunday by New York Department of Financial Services, which announced that it took possession of the bank

Billionaire warns of SVB collapse aftermath. ‘Only 11% of SVB’s $175.4 Billion deposits will certainly be paid’.

from thefreeonline on 12th March 2023 from Wolf Street and Banned Agency

Bill Ackman says the government made “a-soon-to-be-irreversible mistake” in its treatment of the failed bank.

Billionaire US investor and hedge fund manager Bill Ackman on Saturday warned the US of dire consequences facing its banking sector and the broader economy following the implosion of Silicon Valley Bank (SVB), a major US lender focused on tech and startups.

Ackman wrote on his Twitter account that US authorities should not have allowed SVB to collapse without protecting all depositors. Official figures showed that only 11% of SVB’s $175.4 billion in deposits were insured at the time of the bank’s failure.

Other banks were also hit already by the collapse of Silicon Valley Bank, including First Republic, the 16th-largest U.S. bank with more than $ 180 billion in assets, which plunged 50% on Friday before closing with a 15% drop on the day (a 34% drop on the week).).

Non insured depositors will probably lose most of their money, depending on how any remaining assets are eventually divided up. Investors and sharehiolderts will lose everything. The Rating Agencies gave no warning of the collapse. On Wednesday March 8, Moody’s, for example, still had an A3 rating on SVB Financial, owner of the now defunct Silicon Valley Bank, as it was already collapsing for all to see. Four notches into investment grade – a very respectable rating! On Friday it fell 20 notches to zero, but too late to get money out.

SVB Collapse: Roku Had $487 Million In Cash At Failed Bank

Shareholders got bailed in and face a total loss. They’re the ones who are “bailed in” automatically when the FDIC takes over. Other investors may have a partial loss.

According to the investor, with the lender’s failure “the world has woken up to what an uninsured deposit is – an unsecured illiquid claim on a failed bank.” This means that when the banks reopen on Monday, “the giant sucking sound you will hear will be the withdrawal of substantially all uninsured deposits from all but the ‘systemically important banks’ (SIBs).”

The situation will lead to an economic meltdown, as the withdrawals “will drain liquidity from community, regional and other banks and begin the destruction of these important institutions,” Ackman says, adding that “thousands of the fastest growing, most innovative venture-backed companies in the US will begin to fail to make payroll next week.”

According to the investor, US authorities should either find a buyer for SVB before the banks open on Monday, a prospect he believes to be unlikely, or to guarantee all of SVB’s deposits.

SVB shares only began to collapse on Thursday during the day, and they continued to collapse after hours, and they continued to collapse before regular trading Friday morning, until trading was halted – and trading remains halted forever

“Had the gov’t stepped in on Friday to guarantee SVB’s deposits (in exchange for penny warrants which would have wiped out the substantial majority of its equity value) this could have been avoided and SVB’s 40-year franchise value could have been preserved and transferred to a new owner in exchange for an equity injection… This approach would have minimized the risk of any gov’t losses, and created the potential for substantial profits from the rescue,” he writes.

READ MORE: US mulls ways to secure bank deposits after SVB collapse – Bloomberg

SVB collapsed last Friday, after its shares plunged amid a massive bank run. Depositors rushed to withdraw their funds following SVB’s announcement that it had lost $1.8 billion on asset sales made in an attempt to raise capital.

“SVB’s senior management made a basic mistake. They invested short-term deposits in longer-term, fixed-rate assets. Thereafter short-term rates went up and a bank run ensued. Senior management screwed up and they should lose their jobs,” Ackman said.

He added, however, that US authorities were also at fault for the bank’s failure, as their job is to monitor the banking system for risk and SVB “should have been high on their watch list with more than $200B of assets and $170B of deposits from business borrowers in effectively the same industry.”

US Banks may CRASH this week – Run on the Banks likely as 89% of uninsured Depositors in failed SGB lose their cash https://t.co/5PUDEQb665 pic.twitter.com/dV8MSSr0ky

— Mike Gilliland (@MikeGilliland11) March 12, 2023

Israeli startups tumble in wake of Silicon Valley Bank collapse

rage-driven Mistake – despite a Chinese peace mediation offer that the State Department was quick to dismiss

from thefreeonlinee on March 12, 2023 by Ms. Cat7 agencies

Punishing China will likely backfire against the dollar and unleash a de-dollarization wave that could knock it off the reserve status. Here’s what you must know! America’s Ultimate Mistake via Sean Foo

https://youtube.com/watch?v=hFY_cBBJeww%3Fversion%3D3%26rel%3D1%26showsearch%3D0%26showinfo%3D1%26iv_load_policy%3D1%26fs%3D1%26hl%3Den%26autohide%3D2%26wmode%3Dtransparent

If the United States and its allies impose Russian style blanket sanctions on China, this could be the greatest financial mistake in all of its modern history. Unlike Russia, China is enormous and more resilient and has deeper ties across the global economy.

“China’s economy is 10 times larger than that of Russia. Its banking sector is 30 times larger than that of Russia.

It’s the largest manufactured goods exporter in the world by a very large margin.

It has a dominant position in many different critical supply chains, solar panels, EV batteries, machine tools, 5G, even parts of the semiconductor supply chain like assembly and packaging.

It also has nearly a pure status with us on foundational technologies like AI, biotech and even quantum computing,” he said.

China Has Friends, More Than US

“China has also accumulated a lot of soft power since the Belt & Road Initiative was initiated in 2013.

It’s the largest lender to emerging market countries, two times as much as all other Western governments combined, and much more than the World Bank.”

General Li Shangfu, China’s new miltary commander, at a session of the National People’s Congress in Beijing, March 12, 2023.

Putin’s popularity is higher than Biden’s. America’s support for Ukraine is in decline.

70% of the world has a favorable view of Russia and China. The ‘good news‘, most of the world prefers American-style “freedom” to Chinese-style “autocracy.

See also. … China could outmaneuver US ‘without firing a shot’ – retired general..