Which Banks Will Get Hit Worst?
 

Which banks are gonna be hit the worst by this credit crisis? Might be helpful to speculate now before the shit hits the fan.

We heard today about Bear Stearns, who's next for the chopping block?

Citi, Bear, Lehman, Merrill Lynch, JP Morgan

Everyone except Goldman Sachs, because they were smart enough to cover their ass

Banks dont get hit. their depositors do.

Well, it also helps that the current administration of the US gov is basically a revolving door for ex Goldman top execs, Treasury Secretary etc

What do you mean? Profits down or heavy losses. Bank stocks way down. They are getting hit pretty hard. You see WaMu today?


Banks got hit really hard during S and L crisis.

Sumitomo owns a large block of Goldman Sachs, their influence helped avoid the current credit mess. I rent commercial space to Sumitomo and they are strong.

Here is the first victim:
http://www.fdic.gov/bank/individual/failed/Hume.html

Colin, you are reffering to something BEFORE your opponent was born
:)

My last girlfriend was in 6th grade during 9/11 and barely remembers it. It's getting weird, Serge.

This is where Peaches' plan is important. make sure you don't have more than the FDIC limit at any one institution.

1000+ failed S&L's.

For those who don't remember or know ...
http://en.wikipedia.org/wiki/Savings_and_Loan_crisis

Not true. You can go around it if you have revocable trust with your close blood relatives as beneficiaries.

As for g/f and 9/11.....do you use Viagra to keep up wiht her or does she take vitamins to keep up with you!?
;)

WAMU looks like the one that is going to get hit the worst.

Citi and Merrill are going to recover over time.

I do have a revocable trust. I didn't/don't understand the element you are talking about but just set it up so will speak to attorneys. Thanks.

She is not the GF anymore but I needed viagra to keep up. ;-)

Yeah of the majors WaMu is looking bad. WFC is looking pretty good.

CFC has a banking component and is obviously severely hurt and being acquired.

Bear and sterns took a dump today.. down almost 50% in one day..

The lesson to be learned IMO? be careful of investing based on what the CEO says. even just a few days ago. Similarly with CFC earlier in the year.

netbank was shutdown last year too...

Makes you wonder since one of the Keating 5 is now the Rep candidate for President

http://en.wikipedia.org/wiki/Keating_five

Hmmmm. So it is only $100k per beneficiary?

It's a bizarre world, isn't it?

Northern Rock didn't do too well but strange ending. We counting that one?

Maybe if hundreds of millions in bonuses aren't paid each year investment banks would have a higher reserve for down times. Cocksuckers.

Well said. Forgive me if ive got this all wrong as i dont completely understand the issues, but wouldnt they also be helping their liquidity problems by offering much higher interest rates and yields on their savings products?

Instead of being forced to run to the Fed and other banks and crash their share price and ruin their brand, they could take a minor hit on earnings by offering very high rates?

basically...yes. I had to investigate today as I have 2 CD's with lehman brothers which was down 15% today.
You KNOW the things are bad when you start worrying about FDIC insurance and what it covers.

When I worked for the Federal Reserve and they came in asking for a bank's current balance, you knew someone was in trouble.

I'm sure there's a lot of that going on today as it seemed to happen most often on Fridays.

I wont probably please you, but LEH is rumored to be second bank going down. Compare todays stock slides of all IB and LEH.
They had biggest slide of all banks except BSC - 14.63% . They were probably smashed down for a reason too. Implied Volatity of LEH options wents nuts just today, before the big slide.
The crash on BSC start to be rumoured because of insane put options actions one week ago. There were big money made on BSC put options by all people who knew whats was going on behind scenes.
I made around 500% on my BSC put options too...

Anyway, WM, CFC and LEH are my favorites for going under as the next ones.
LEH, because they held similar things like BSC and they are really overleveraged.

and by the way, if these guys go under, add BSC to the mix and you can be sure there will be a massive casade failures of other institutions too...

So at the end it doesnt matter much who will goes under as first, second or third, because they will trigger massive defaults of other institutions too....

http://www.fdic.gov/bank/individual/.../banklist.html

Wow, no bank failures between 2004 and 2007. Now there are 5 failures since Feb 2007. Scary stuff.

just read this about BSC
"``Bear Stearns is a big counterparty in the credit derivatives universe,'' said Jochen Felsenheimer, head of credit strategy at UniCredit SpA in Munich. ``If it were to default, definitely that situation is a horror. There would be huge distortions in the market. That is why the monetary authorities are trying to avoid any failure of banks.'

Barclays Capital analysts last month estimated that if a financial institution that had $2 trillion in credit-default swap trades outstanding were to fail, it may spark between $36 billion and $47 billion in losses for those that traded with the firm. That doesn't include ``large, potentially concentrated'' market value losses others would face, the analysts, led by Arup Ghosh in London, wrote on Feb. 20.
'

maybe if BSC isnt saved, they will be first to trigger massive casade of failures...

but of course BSC isnt the only one to be saved, there are more banks slowly the way..and not enough dough to save them all.

i work at the Northen rock and the run was absolute fucking hell.
I really hope Bear stearns pulls through all of this

:thumbsup Banks can't bancrupt so who fucking cares

Wamu stock is worthless.............

well,
I just got word from the broker that LEH is calling one of 2 CD's back on March 20th, but even if they didn't, both CD's are FDIC insured, thus even if they go under, yours truly won't suffer much.

My biggest holding in banks is Bank of America, the biggest of them all in USA.
If they fail, the life the way we know will seize to exist anyway, so who cares? We live in interesting times when the question of failing banks is on the front page of GFY for 24 hours

the fed and the american people

Yes, this is exactly what Countrywide has been doing. Dunno if it will be enough but the idea is absolutely correct.

Me too. BAC and WFC. BAC is a nice play on Chinese banking too with their stake in CCB.

you know the biggest problem with all big banks is counterparty exposure, cause if Bearn Sterns would go into BK or any other bank with high derivate exposure, it could force a lot of other companies go into BK too.
Bearn Sterns alone has $13 trillion in counterparty risk.


LEH story from official source:
Lehman Brothers Obtains $2 Billion Bank Credit Line (Update2)

By Andrew Frye

March 14 (Bloomberg) -- Lehman Brothers Holdings Inc. obtained a $2 billion credit line as the investment bank tried to blunt the stock's worst drop in almost eight years and assure investors the firm isn't short on cash.

The unsecured, three-year facility from 40 banks replaces an existing credit line, New York-based Lehman said today in a statement. JPMorgan Chase & Co. and Citigroup Inc., also based in New York, led the effort, the firm said.

Lehman announced the financing hours after Bear Stearns Cos. said it agreed to an emergency bailout by JPMorgan Chase and the New York Federal Reserve. Bear Stearns, which fell 47 percent in New York trading, said its cash position had ``significantly deteriorated'' in the past 24 hours, raising concern among investors that more financial firms may face a liquidity shortage.

``Nothing speaks like cash in a crisis, and they have the cash,'' said James Ellman, president of San Francisco-based Seacliff Capital LLC, which has about $150 million under management. ``In these financial markets, locking in three-year money is long-term. Usually we call it medium-term, but now that's very long-term.''

Lehman fell $6.73, or 15 percent, to $39.26 at 4:15 p.m. in New York Stock Exchange composite trading, the most since April 2000, leaving the stock down 40 percent this year.

``We are extremely pleased with the success of the syndicated facility and view this as a strong signal from the market and our key bank relationships,'' said Paolo Tonucci, Lehman's global treasurer, in the statement.

To contact the reporter on this story: Andrew Frye in New York at [email protected]
Last Updated: March 14, 2008 16:50 EDT




another interesting comment from somewhere else....

"You can safely assume that Bear is not alone here," said an interest rate strategist at one European investment bank in London, who declined to be identified.

"We have been setting prices in swaps markets in recent days that were designed to say 'no deal' and at least one other U.S. investment bank -- not Bear -- dealt. That is very worrying if they needed the cash that badly. We have been forced to review our counterparty limits ever since."

http://uk.reuters.com/article/newsOn...andCha nnel=0

I read some analyst who wrote about BS counterparties, if BS was allowed to go BK , there would be around 50-60 billion loss from derivates.

good overview of banks derivate exposure.
http://bp2.blogger.com/_H2DePAZe2gA/...0-h/OCCpg1.png

any of these big companies going BK will force a lot of other counter parties BK too and so on....

So you're saying that if any of those go down and are allowed to fail, it would start a chain reaction resulting in the collapse of many institutions...... just loaded the Diana Ross song "Chain Reaction" and lit a cuban.

Amazing how relevant the lyrics are.... :1orglaugh

Insightful. I like reading your posts.

Online article? Have a link?

finally after few months I saw article, which mention it:

"Barclays Capital recently estimated that the failure of a dealer with $2 trillion in CDS contracts outstanding could potentially lead to losses of between $36 billion and $47 billion for counterparties. This underlines the potential concentration risks that are present. "

from a great article about Credit Default Swaps:
http://www.wilmott.com/blogs/satyaji...ex.cfm/General

so simply said, if they would allow one similar bank to fail, the rest of banks would become bankrupt candidates immediately.