First Republic Rescued, Dimon Met With Yellen

America's top bankers and key government officials seemed pretty pleased with themselves in the US on Thursday afternoon, when Wall Street came together to rescue First Republic, the struggling San Francisco-based lender seen as a possible next domino in America's mini-banking crisis. The country's largest financial institutions together deposited $30 billion+ with First Republic, $25 billion of which was split between JPMorgan, Bank of America, Citi, Wells Fargo, Goldman and Morgan Stanley. Th

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14 thoughts on “First Republic Rescued, Dimon Met With Yellen

  1. $300BN borrowing this week from discount window, BTFP, FDIC. Add $50BN for CS and $70BN JPM-led for FRC. The money firehose directed at putting out the bank fire is huge and, I think, sufficient.

    Similarly huge stop-out flush of trades/positions of CTAs, hedge funds, and I suspect traders of many stripes incl commodity.

    Focus turns to implications
    – for Fed inflation actions and rates
    – for bank sector profitability, capital raises, lending, consolidation
    – for markets broadly

    I don’t think inflation has gone away as a driving factor of CB action, nor that Tech or the closely related ConsDisc and CommSrvc sectors somehow became defensive havens to safely hide in. Whined as one who’s sure been on the wrong side of the trade recently.

      1. I was reminiscing about the years 2007-2009 with someone, and the conversation turned to how those who made it through look back on those years with something approaching fond nostalgia, even though at the time it was stress, fear, and exhaustion. Naturally we started wondering if we’ll look back at 2022-2024 the same way. It gets easier, with each trip through the rodeo.

  2. “In a statement, Founder and Exceutive Chairman Jim Herbert and CEO Mike Roffler (both of whom sold shares over the past few months, according to the Wall Street Journal) conveyed their ‘deep appreciation’ for the support.”

    No kidding, Sherlock.

  3. H-Man, the issue is the small banks. They are underwater if you have to liquidate the portfolios. A run on these banks means a lot of support Fed.
    If the Fed raises rates. those bank portfolios, call them holdings, decrease more in value. More bad news from the small banks
    This all suggests no further hikes for the time being.

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