Money and Finance

[gearhog]

The FDIC just published this document regarding its preparations for the failure of a Global Systemically Important Banking (GSIB) organization headquartered in the U.S. with complex global operations.

https://www.fdic.gov/sites/default/files/2024-04/spapr1024b_0.pdf

It basically outlines how the Sec of the Treasury, Federal Reserve, and President will transfer all the assets to a Bridge Financial Company. I thought it interesting that they mention they plan to put the company into FDIC receivership on a Friday evening so as to be able to mobilize the plan and prevent a contagion by Monday morning.

"The appointment as receiver late Friday afternoon would provide time, while most global financial markets are closed, to form a Bridge Financial Company, mobilize resources needed to conduct business beginning on Monday morning, and communicate with key constituencies (including employees, counterparties, and claimants) around the globe. The FDIC recognizes that a Friday night appointment may not be possible in all instances, and the timing will be highly dependent on the nature of the failing institution, how it fails, and market conditions at the time."

The plan says it ensures that only claimants (shareholders and creditors) would incur losses and that US taxpayers would incur no liability. Translation: they'll print the money.

"The ability of the FDIC and other regulatory authorities to manage the orderly resolution of large, complex financial institutions remains foundational to U.S. financial stability. While recognizing the progress that has been made toward enabling such a resolution and ending “too big to fail,” we also recognize that the resolution of a GSIB has not yet been undertaken. When it becomes necessary to do so, carrying out such a resolution will come with a unique set of challenges and risks."

Any bets on who it's gonna be?

Edited April 28 by gearhog

[BashiChuni]

we are so fucked

[SurelySerious]

The FDIC just published this document regarding its preparations for the failure of a Global Systemically Important Banking (GSIB) organization headquartered in the U.S. with complex global operations.
https://www.fdic.gov/sites/default/files/2024-04/spapr1024b_0.pdf
It basically outlines how the Sec of the Treasury, Federal Reserve, and President will transfer all the assets to a Bridge Financial Company. I thought it interesting that they mention they plan to put the company into FDIC receivership on a Friday evening so as to be able to mobilize the plan and prevent a contagion by Monday morning.
"The appointment as receiver late Friday afternoon would provide time, while most global financial markets are closed, to form a Bridge Financial Company, mobilize resources needed to conduct business beginning on Monday morning, and communicate with key constituencies (including employees, counterparties, and claimants) around the globe. The FDIC recognizes that a Friday night appointment may not be possible in all instances, and the timing will be highly dependent on the nature of the failing institution, how it fails, and market conditions at the time."
The plan says it ensures that only claimants (shareholders and creditors) would incur losses and that US taxpayers would incur no liability. Translation: they'll print the money.
"The ability of the FDIC and other regulatory authorities to manage the orderly resolution of large, complex financial institutions remains foundational to U.S. financial stability. While recognizing the progress that has been made toward enabling such a resolution and ending “too big to fail,” we also recognize that the resolution of a GSIB has not yet been undertaken. When it becomes necessary to do so, carrying out such a resolution will come with a unique set of challenges and risks."
Any bets on who it's gonna be?

[Swizzle]

12 hours ago, gearhog said:

The FDIC just published this document regarding its preparations for the failure of a Global Systemically Important Banking (GSIB) organization headquartered in the U.S. with complex global operations.

https://www.fdic.gov/sites/default/files/2024-04/spapr1024b_0.pdf

It basically outlines how the Sec of the Treasury, Federal Reserve, and President will transfer all the assets to a Bridge Financial Company. I thought it interesting that they mention they plan to put the company into FDIC receivership on a Friday evening so as to be able to mobilize the plan and prevent a contagion by Monday morning.

"The appointment as receiver late Friday afternoon would provide time, while most global financial markets are closed, to form a Bridge Financial Company, mobilize resources needed to conduct business beginning on Monday morning, and communicate with key constituencies (including employees, counterparties, and claimants) around the globe. The FDIC recognizes that a Friday night appointment may not be possible in all instances, and the timing will be highly dependent on the nature of the failing institution, how it fails, and market conditions at the time."

The plan says it ensures that only claimants (shareholders and creditors) would incur losses and that US taxpayers would incur no liability. Translation: they'll print the money.

"The ability of the FDIC and other regulatory authorities to manage the orderly resolution of large, complex financial institutions remains foundational to U.S. financial stability. While recognizing the progress that has been made toward enabling such a resolution and ending “too big to fail,” we also recognize that the resolution of a GSIB has not yet been undertaken. When it becomes necessary to do so, carrying out such a resolution will come with a unique set of challenges and risks."

Any bets on who it's gonna be?

UBS has a NYC Americas HQ, big HQ not USA, and...

Switzerland says UBS may need more cash. The bank is fuming

A year after the failure of Credit Suisse, the Swiss government says UBS may have to find as much as $27 billion to absorb potential losses and protect taxpayers from ever having to bail out a major bank, reports my colleague Hanna Ziady.

Now, the giant Swiss lender is hitting back, saying its finances are robust and warning that the proposal could harm Switzerland’s standing as a global financial center.

[gearhog]

Buckle up.

We got a bag day ahead of us.

[ClearedHot]

7 hours ago, gearhog said:

Buckle up.

We got a bag day ahead of us.

You are racist...Bidenomics is good.

[Lord Ratner]

It's interesting, the narrative on housing seems to have flipped a few weeks ago, lots of talk of falling prices and soaring inventory. Florida and Texas especially. Are the AirBNB hosts starting to see values drop? Those who own the houses should feel great right now. Those with mortgages might be starting to sweat. 

 

Now suddenly we went from no landing to an "emergency landing" in a week. The Japanese carry trade is dying, and suddenly everyone is taking about an "AI" bubble. 

 

Plus, with the election coming up it's almost certain that any sort of sudden crash in the market will not be rescued by fiscal policy. I assume the Republicans would love a "Biden/Harris recession" going into November. 

 

Just another blip, or are we finally about to pay pay for the absolutely Insanity of the past 5 years?

[Smokin]

Why would those with mortgages be starting to sweat?  If someone has bought a house since the rates went up then the market dropping should cut consumer spending and help with inflation, so rates should drop.  The only reason I see starting to sweat during a market drop is if I need money in the near future that I have invested or if I'm concerned about my job.

[ClearedHot]

1 hour ago, Lord Ratner said:

It's interesting, the narrative on housing seems to have flipped a few weeks ago, lots of talk of falling prices and soaring inventory. Florida and Texas especially. Are the AirBNB hosts starting to see values drop? Those who own the houses should feel great right now. Those with mortgages might be starting to sweat.

Florida inventory is up a little and prices are slowly coming down.

Airbnb values drop?  Who cares, I am WAY ahead AND my Airbnbs have been rocking for six straight years.  Now I get 60 day winter rentals that cover my expenses for the entire year.  I ran the numbers last month and after expenses I am generating on average 32% profit based on the current value of the homes.

I own six homes outright and have one home with a mortgage, the last thing I am doing is sweating...especially after doing a IRRRL and locking in at 1.75%.

[Lord Ratner]

36 minutes ago, ClearedHot said:

I own six homes outright and have one home with a mortgage, the last thing I am doing is sweating...especially after doing a IRRRL and locking in at 1.75%

Well that is kinda the point I was making. If you own them, you're good.

A lot of the late-entry AirBNB owners are in adjustable rate mortgages. *Very* different calculus for them. You were in this game before the pandemic, right? I might be thinking of someone else. 

 

As always, unless you are a big enough player ($billions) that you know Uncle Sam will have your back in an emergency, owning > borrowing.

 

The inventories and price cuts in listings in North Texas are skyrocketing. It'll be a great chance to rebalance the market *if* the unemployment monster rears it's head in the next 6 months or so. Today will look like an appetizer compared to what's coming if the consumer comes under pressure. But that's a very big "if" as far as I can tell.

 

[ClearedHot]

4 hours ago, Lord Ratner said:

Well that is kinda the point I was making. If you own them, you're good.

A lot of the late-entry AirBNB owners are in adjustable rate mortgages. *Very* different calculus for them. You were in this game before the pandemic, right? I might be thinking of someone else.

Well before the pandemic...in one case 23 years before the pandemic.  Bought last two in 2019 before a big run up.

4 hours ago, Lord Ratner said:

The inventories and price cuts in listings in North Texas are skyrocketing. It'll be a great chance to rebalance the market *if* the unemployment monster rears it's head in the next 6 months or so. Today will look like an appetizer compared to what's coming if the consumer comes under pressure. But that's a very big "if" as far as I can tell.

Data for North Texas (Dallas), does not match what you are saying...yet.  Prices are actually up the past few months.  I'd have to see a significant price correction if I was going to buy more properties out there.  Unemployment will be a tipping point, this month was bad, prognosticators trying to shape next report will be good...I am not convinced based on other indicators.  To me untrained eye it appears consumption is falling and we know where that leads.

I am still looking for a large plot of land...was close on 320 acres but holding out for goldielocks location.

[BFM this]

On 8/5/2024 at 12:59 AM, gearhog said:

Buckle up.

We got a bag day ahead of us.

 

[Lord Ratner]

14 hours ago, ClearedHot said:

Well before the pandemic...in one case 23 years before the pandemic.  Bought last two in 2019 before a big run up.

Data for North Texas (Dallas), does not match what you are saying...yet.  Prices are actually up the past few months.  I'd have to see a significant price correction if I was going to buy more properties out there.  Unemployment will be a tipping point, this month was bad, prognosticators trying to shape next report will be good...I am not convinced based on other indicators.  To me untrained eye it appears consumption is falling and we know where that leads.

I am still looking for a large plot of land...was close on 320 acres but holding out for goldielocks location.

Yeah you're looking at final sales prices, I was referring to listings with price cuts. More of an early sign, including total listings in general. 

 

The "kid" who runs www.reventure.app is a bit of a sky-is-falling type, but his program makes it very easy to look at the more interesting and relevant metrics for setting market changes early. Things like listing price cuts and time-on-market. 

 

Separately, because all data is garbage and nothing is real, the chart you posted completely ignores new-construction incentives. Almost $50k per house in some cases. That would be a lot more than a 2% blip in the price of it was factored in. https://wolfstreet.com/2024/07/04/whats-the-cost-of-mortgage-rate-buydowns-and-other-incentives-to-homebuilders-lennar-discloses-the-numbers/

 

Once they start fucking with the books, look out. It'll still take a couple years because housing isn't like the stock market, it doesn't go down like an elevator. But between the demographic shift of ownership and the general impossibility for the younger generation to afford homes at these prices, a major correction is long overdue and is *possible* seeing the beginning.