https://www.fau.edu/newsdesk/articles/unbooked-losses-banks-capital-equity
Over 50 US banks had losses greater than 50% of their equity capital.
4 US Banks with Bigger Unrealized Losses than their Equity Capital
byu/jarstiffler inwallstreetbets
Posted by jarstiffler
26 Comments
How many times do I need to say it? It’s not a loss until you sell
“Well, *on paper* it might look like we’re insolvent, but we have every confidence…”
It’s super cool that the article doesn’t list the 50 banks.
What does this mean. Charles Schwab is the most concerning… for… reasons….
Paper losses, if they don’t sell they won’t incur it.
Naturally puts.
So calls should print.
Oh, jeeze Charles Schwab and USAA on here. I’m fuqed
Calls on JPM?
Show us some loss p0rn?
Shoutout FAU
If only Peter Sullivan was here to explain it to us what this means.
“…And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”
3rd president of US in letter to J. Taylor
Pasting the key part of the article below to save you all some time.
Also some commentary is that this might seem like big numbers but as the article alludes to it’s just unrealized treasury holding losses. Yes this could be like Silicon Valley bank, or it could be just normal stuff that solves itself over time. If you believe that rate cuts will happen, and these banks have enough access to working capital, then this is a nothing burger. If you trade treasuries you know that if you can hold it to maturity then there is no losses, that’s the key part. (Granted those four small banks might fail, they don’t have the same access to capital).
> ”
> Four banks had losses that exceeded their equity capital: Union City SVGS Bank, where unbooked losses equaled 172.7%; Citizens ST Bank, where unbooked losses equaled 121.4%; Green Dot Bank, where unbooked losses equaled 108.6%; and First America TR, where unbooked losses equaled 104%.
> Larger banks on the list with more than $10 billion in equity had unbooked security losses more than their equity capital: Charles Schwab, where unbooked losses equaled 64%; USAA Federal Savings Bank, where unbooked losses equaled 67% of their equity capital; and Bank of America NA, where unbooked losses equaled 58%.
> “
The list is here https://business.fau.edu/departments/finance/banking-initiative/unrealized-losses-investment-securities/
Green Dot? I think that’s where I buy my weed.
Finally some good fucking research
So what’s the action?
Fire up the printers boys, we need more inflation.
I like the “close up of a bank” picture with a building with “Bank” written on it 🤣
You see , in 10-20 years they can be solvent again , let’s just hope in that time people won’t decide to withdraw their money and force the banks to realize the uppermentioned losses.
The balance in nature is such a fragile think it’s almost beautiful
(Insert little girl smiling at burning house here) 🏠🔥👧🏼
> Larger banks on the list with more than $10 billion in equity had unbooked security losses more than their equity capital:
– Charles Schwab, where unbooked losses equaled 64%;
– USAA Federal Savings Bank, where unbooked losses equaled 67% of their equity capital; and
– Bank of America NA, where unbooked losses equaled 58%.
This is related to securities – how the banks have invested – has nothing to do with how much money they are making… which is waaaaaaaaay more
Isn’t really an issue unless they have a need to sell. They just let time eat away at these unrealized losses.
This article is very troubling. Looks like more bank issues on the horizon
Most likely long end T-bonds from before interest rate hikes, if they can ride it out for another 5 years they’d be ok ( assuming it’s all 10 years). Let’s just hope no liquidity crunch, coz that market does not move. The only silver lining is there is big pile sitting in reverse repo and treasury is buying some back to provide further liquidity, but you gotta be desperate to be taking the hit now.
Every other BofA has their ATMs CLOSED in my area. Went to a city 50 minutes north of me a few months back – same shit there too.
**about time to go puts on XLF**