The Economy

NYCB Tumbles on Report Bank Is Trying to Raise Equity Capital

The irony is that Jay Powell has been testifying in front of Congress in his bi annual Humphrey Hawkins testimony (which is always entertaining and scary at the same time), and he has been asked multiple times about banks and commercial real estate. He assures everyone, it is all under control.

 

They just put out a press release saying they have raised $1 billion. ... a group that includes Steve Mnuchin's firm.

Also announced a new CEO.

They are doing everything they can to sure up confidence.

Of course the group that just bought probably precipitated the stock price drop in order to get a bargain.

What I don't get is why there hasn't been a run on deposits. People must be so conditioned to think that the FDIC / Federal government will make everyone whole (with what, though?) that they no longer worry.

Weird times.

 

2008 didn't really see much by way of bank failures. They forced sales and did bailouts -- socializing the problem (look at the $34 trillion of debt we're all on the hook for and a little more than $1 trillion is probably attributable to the system continuing to "roll along," as you put it). The actual bank failures, which continued for a few years afterward were relatively contained. Only a small percentage had uninsured depositors who weren't made whole. I'd still argue that if you were one of those depositors it wasn't an "oh well" event to you.

Have you ever looked at the FDIC balance sheet? It's a joke. It has a whopping $125 billion that is somehow supposed to be securing $7 to $10 trillion in deposits today. And when SVB and Signature Bank went under last year, Janet Yellen gave an implicit promise that all deposits would be made whole in order to bring in calm. If there are actual bank failures of any significance, where is the actual money in that implict guarantee coming from? Our government right now is already adding a trillion dollars of new debt every 100 days.

 

But, but, but ... February beat expectations.

 

Yup.

Quietly, they revised the bullshit number from January down by 107K (nearly a third of the supposed jobs). ... you know the one I was saying was nonsensical and didn't add up from the actual household survey anyhow. I have pointed this out for the last two years. They report bullshit, then revise down when nobody is watching.

This stuff isn't accidental. They report some crafted number that bears no relationship to any reality, they get a headline, someone comes on here and does the "bad news for Biden!" post(like Joe Biden employs anyone), and I get jumped on for anything I post.

This month they allowed the unemployment rate to tick up to 3.9 percent (which is still full employment, even as huge numbers of people have stopped working or looking for work and we have millions of people working multiple part-time jobs, which they count as multiple jobs!). It works really nicely for the "soft landing, nothing extreme, so back to easy money" narrative that has aleady been preordained.

 

Interesting thing you can pull from their report. Taking away their seasonal adjustment which allows them to create whatever number they want, and just working with the numbers in the survey: Year over year, native-born workers have seen a decline in 900K jobs; Foreign-born workers have seen a gain in 1.5 million jobs!

It makes sense. ... the new jobs that are actually getting filled (aside from government jobs which are now one of the biggest components of every report) are low wage, low skill jobs. And we have a lot of migants who have come into the country. It's actually good for the country -- it's why they came here, looking for jobs.

But I am pointing it out because it gives fodder to the ignorant anti-foreigner stuff.