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He knows what we're buying since it is a joint account. KO was one of his picks since he loves Gatorade when he's working 12x6 days right now.
Janice, we've covered TFRY. What other investments have you owned?
Guiding your son's investing is entirely appropriate. No young kid is equipped right off the bat to handle all aspects of investing. I supervise my kids' accounts and run them like one big unified enterprise. I look out for the tax aspects.
For example, If I had a huge holding in one stock (say BRK), I'd discourage my sons from also owning a ton of BRK. I'm absolutely convinced that old investors do better than young investors and there's research suggesting that's the case. Plus I have plenty of time for stocks; my kids have almost no spare time. One kid is getting marred soon. Both sons are very busy and work harder than I ever worked. I do what I can to help.
The Federal Reserve is expected to hike rates one more time. What that means for you
PUBLISHED MON, MAY 1 202310:53 AM EDTUPDATED MON, MAY 1 202311:37 AM EDT
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Jessica Dickler
KEY POINTS
The Federal Reserve is still expected to hike rates by one-quarter of a percentage point at this week’s policy meeting.
Borrowing rates are already at fresh highs.
Here’s a breakdown of how the Fed’s moves have been affecting your monthly expenses and savings.
https://www.cnbc.com/2023/05/01/what-another-federal-reserve-rate-hike-means-for-you.html
Experts predict the Federal Reserve likely will approve a quarter-percentage-point interest rate increase this week.
This 0.25 percentage point hike will mark the 10th time the Fed has raised its benchmark interest rate over the past year or so, the fastest pace of tightening since the early 1980s.
Consumers are now paying more to borrow while still grappling with a high cost of living — causing them to feel increasingly worse off financially.
Even though the Fed’s rate-hiking cycle has started to cool inflation, higher prices are causing real wages to decline.
More from Personal Finance:
73% of millennials are living paycheck to paycheck
Americans are saving far less than normal
A recession may be coming — here’s how long it could last
Real average hourly earnings are down 0.7% from a year earlier, according to the latest reading from the U.S. Bureau of Labor Statistics.
Because incomes have not kept pace with inflation, household budgets are squeezed, causing more people to lean on credit just when interest rates have been rising at the fastest pace in decades.
“People are racking up debt and that’s troublesome,” said Tomas Philipson, University of Chicago economist and the former chair of the White House Council of Economic Advisers.
Here’s a breakdown of how increases in the benchmark rate have been affecting the rates consumers pay on the most common types of debt:
Average credit card rates top 20%
Most credit cards come with a variable rate, which has a direct connection to the Fed’s benchmark rate.
After a prolonged period of rate hikes, the average credit card rate is now more than 20% on average — an all-time high, while balances are higher and nearly half of credit card holders carry credit card debt from month to month, according to a Bankrate report.
“Yet another rate hike from the Fed means today’s sky-high credit card interest rates will rise even further in the very near future,” said Matt Schulz, chief credit analyst at LendingTree. Cardholders should expect their current cards’ interest rates to rise in the next billing cycle or two, he said.
Mortgage rates now average around 6.5%
Homeowners in the neighborhood of their dreams
Peopleimages | Istock | Getty Images
Although 15-year and 30-year mortgage rates are fixed, and tied to Treasury yields and the economy, anyone shopping for a new home has lost considerable purchasing power, partly because of inflation and the Fed’s policy moves.
The average rate for a 30-year, fixed-rate mortgage currently sits at 6.48%, according to Bankrate, down slightly from November’s high but still much higher than it was a year ago.
“While borrowers can save money relative to what they would have paid for a mortgage a few months ago, they’re still going to be shelling out much more than they would have had they bought a home at the start of last year,” said Jacob Channel, senior economic analyst at LendingTree.
“All in all, there’s no getting around just how tough today’s housing market is for many people to break into and navigate.”
They’re still going to be shelling out much more than they would have had they bought a home at the start of last year.
Jacob Channel
SENIOR ECONOMIC ANALYST AT LENDINGTREE
Adjustable-rate mortgages, or ARMs, and home equity lines of credit, or HELOCs, are pegged to the prime rate. As the federal funds rate rises, the prime rate does, as well, and these rates follow suit. Most ARMs adjust once a year, but a HELOC adjusts right away. Already, the average rate for a HELOC is up to 7.99%, according to Bankrate.
Auto loan rates rose to more than 6.5%
Even though auto loans are fixed, payments are getting bigger because the price for all cars is rising along with the interest rates on new loans.
The average rate on a five-year new car loan is now 6.58%, according to Bankrate.
Keeping up with the higher cost has become a challenge, research shows, with more borrowers falling behind on their monthly loan payments.
Federal student loans are already near 5%
Focused student surrounded by books in a library
Wavebreakmedia | Istock | Getty Images
Federal student loan rates are also fixed, so most borrowers aren’t immediately affected by rate hikes. The interest rate on federal student loans taken out for the 2022-23 academic year already rose to 4.99%, and any loans disbursed after July 1 will likely be even higher. Interest rates for the upcoming school year will be based on an auction of 10-Year Treasury notes later this month.
For now, anyone with existing federal education debt will benefit from rates at 0% until the payment pause ends, which the U.S. Department of Education expects to happen sometime this year.
Private student loans tend to have a variable rate tied to the Libor, prime or Treasury bill rates — and that means that, as the Fed raises rates, those borrowers will also pay more in interest. How much more, however, will vary with the benchmark.
Deposit rates at some banks are up to 4.5%
While the Fed has no direct influence on deposit rates, the yields tend to be correlated to changes in the target federal funds rate. The savings account rates at some of the largest retail banks, which were near rock bottom during most of the Covid pandemic, are currently up to 0.39%, on average.
Thanks, in part, to lower overhead expenses, top-yielding online savings account rates are as high as 4.5%, according to Bankrate.
However, if this is the Fed’s last increase for a while, then deposit rate hikes are likely to slow, according to Ken Tumin, founder of DepositAccounts.com.
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But “it’s not too late,” said Greg McBride, chief financial analyst at Bankrate.com. “We may not see much more in the way of improvement but there’s still a substantial advantage,” he said of switching to a high-yield savings account.
“There’s no advantage to staying where you are if you haven’t benefited from rising rates.”
I don't think any of us played penny stocks.
Wasn't Alydyr an accountant or something like that? I recall that he was pretty sensible about investing.
He was also good at going after scams. I hope he's well, too.. Last I heard from him, he suggested getting together for drinks. But then I didn't hear again. It must have been before COVID closures, but I think perhaps not long before.
This is primarily a stock board. If you are interested in what he does for a living send him a PM.
Are you still not grasping the profound irony of statements like this one?
The board's timing was fantastic. It just missed the 911 attack and a big part of the Dotcom/Tech Crash which started around March 2000. Tim was buying nothing but low priced junk. I don't recognize any of the low priced stocks he talked about. A few NYSE blue chips bought around that time would likely have paid off handsomely, plus 20+ years of ever growing dividends, assuming he held thru 2008/2009. That's assuming Tim didn't try to play Enron, HealthSouth and Worldcom etc for a bounce.
This is from the post to which you were replying:
And don't you think whether I have children, whether I every coached them in sports, and the rest if the stuff you and Bar were gossiping about here, is none of YOUR business?
I don't especially care what people say about me, because--as in this case--they almost always get whatever it is wrong. I got used to it long ago. But I don't think you're in any position to get huffy about "privacy".
In what conceivable way does this have to do with?....
I was discussing generalities with Bar regarding what Fidelity does for me.
In reality, it has to do with the pair of you posting rumors about me that--very ironically--you gathered from the "slobbering morons" you both claim to despise.
But you believe it's okay for you to do that, but that it's emphatically not okay for me simply to ask a couple of normal questions. Funniest thing.
Oh, I see timhyma started the board way back in December 2001. On post #11 he lists his holdings. That was a military newbie who could really use some help. Are any of those stocks still trading?
-------------------
"ll, FWIW here is what I'm holding.
FBCE @$2.50
GX @ $1.70
IBAS @$1.10
IN @$1.70
USIX @ average $.25
Debating on taking my lumps on GX or doing a double down. The rest I am comfortable with.
Recently played PALM, XING, BIGT, and ENE.
I'm enjoying the $5 and under- no OTCBB plays, LOL."
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=222128
Alydyr wasn't the original mod FWIW so your history is slightly incorrect. I knew the original mods as well as Alydyr who was a hoot when he posted about penny stocks.
His lead in was always Is this a good stock.
Alydyr, the mod, stopped posting then returned for a brief time. Over the years, the board shifted to larger caps and to general investing topics, and away from more speculative smallcaps. I'd thought about suggesting a more appropriate name for the board, but the board seems to do okay as it is.
Alydyr had an uncommon way of investing. He'd cherry pick Buffett stocks that he liked or fit into his portfolio. He didn't want BRK. That way he used Buffett/Munger to filter out junk and stocks with weak accounting and he picked among the BRK universe of about 50 non-controlled issues. That's not a bad method of stock selection, in my opinion.
Wasn't Alydyr an accountant or something like that? I recall that he was pretty sensible about investing. Hope he is well.
There is a TFRY board to discuss the stock.
https://investorshub.advfn.com/Tasty-Fries-Inc-TFRY-3817
I made one simple inquiry regarding a WSJ article and now this has turned into a clown show.
Penny stocks need to be discussed elsewhere.
Where Janice's TFRY stock went wrong. It didn't have a fire suppression system!
"in the event of a malfunction, and it also had a fire extinguisher built into it.[5]"
"The machine requires manual servicing and cleaning after around 150 orders are prepared.[1] Later developments included installation of a ventilation system that uses three filters to reduce odors emitting from the machine."
"In August 2013, an order of French fries from the machine was priced at USD $3.50.[7]" Not the $1.50 TFRY was said to change.
https://en.wikipedia.org/wiki/French_fry_vending_machine
Move it to another board please. This is primarily a stock board. If you are interested in what he does for a living send him a PM.
So you inherited a fambly biz. Gotcha.
Bizziness doing WHAT?
Charlie Munger reportedly warns of trouble for the U.S. commercial property market
PUBLISHED SUN, APR 30 202310:13 AM EDT
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Ashley Capoot
KEY POINTS
Charlie Munger reportedly believes there is trouble ahead for the U.S. commercial property market.
The 99-year-old investor told the Financial Times that U.S. banks are packed with “bad loans” that will be vulnerable as “bad times come” and property prices fall.
“It’s not nearly as bad as it was in 2008,” he told the Financial Times in an interview. “But trouble happens to banking just like trouble happens everywhere else.”
https://www.cnbc.com/2023/04/30/charlie-munger-reportedly-warns-of-trouble-for-the-us-commercial-property-market.html
Not exactly earth shattering news.
"Christiansen who tried to make that work.." In quick order the corp had run Florida tourist boats, Texas convenience stores and then Energy in WVA. They only had two C stores (with attached gas stations), but pumpers extrapolated that to taking over the 711-Universe.
They made a big deal of acquiring West Virginia coal assets... almost surely worthless disconnected slivers acquired from tax sales.
Shares rose from a nickel to above $1.50. I followed the company starting from just after it left tour boats and entered C-stores and before energy. That was my introduction to the monumental stupidity of slobbering penny players.
JPMorgan Chase Returns to a Familiar Role: Bank Rescuer
The lending giant’s shares jumped on the news that it is buying First Republic. But investors are watching to see if the deal ends the regional banking crisis.
https://www.nytimes.com/2023/05/01/business/dealbook/jpmorgan-first-republic-rescue.html
Jamie Dimon gets his pound of flesh.
JPMorgan prevailed in an auction that ran over the weekend, beating out other contenders including PNC Financial Services. As part of the deal, JPMorgan will assume the majority of First Republic’s assets, including $173 billion in loans and $30 billion in securities, as well as $92 billion in deposits.
That will spare the F.D.I.C. from a bigger rescue bill: It doesn’t need to worry about having to cover First Republic’s roughly $50 billion in uninsured deposits, since they will move over to JPMorgan. (The F.D.I.C. still estimates its insurance fund will take a $13 billion hit, and the agency reached a loss-sharing agreement with JPMorgan on some loans.)
For a while one of the companies I worked for used Bunker Ramo terminals.
https://en.wikipedia.org/wiki/Bunker_Ramo
They did make the Fortune 500 and started the first quote system for the Nasdaq.
The board name is fine but thanks for your input.
Been clear that I went to law school, passed the bar, practiced law briefly and joined a respectable family owned commercial enterprise where I prospered happily ever after. I was referring to a circa 1979 TRS-80 Model II, a costly machine designed for businesses. Plenty of law firms had them at the time.
"Tandy produced and marketed various Model II business applications ranging from accounting, medical office, legal office, payroll, inventory, order entry, and sales analysis, to general-purpose applications for word processing, database management, and later spreadsheet work. ... and still others marketed by Radio Shack, such as VisiCalc.[14] The company also offered products facilitating data transfer with IBM mainframe computers.[15]"
https://en.wikipedia.org/wiki/TRS-80_Model_II
I was discussing generalities with Bar regarding what Fidelity does for me.
As for sports every organization does it differently. The NC House should stay out of it.
https://en.wikipedia.org/wiki/Aileen_Wuornos
or Barb
https://unknownmisandry.blogspot.com/2020/04/barbara-hoffman-suspected-double-black.html
https://www.cracked.com/article_28844_the-crazy-real-story-wisconsins-massage-parlor-and-cyanide-murders.html
https://the-line-up.com/tlu-excerpt-winter-frozen-dreams-karl-harter
I think Barb is more inneresting. She puts the Bad in Badger. She's up there with Ed Gein and Jeff Dahmer.
Barb had panache.
That is very kind of you. But if I'm going to have a daughter, I'd like her to be more interesting. Pole dancing's okay, but why don't we make her more... unusual?
As they were so fervent about uncovering your past, it is reasonable to presume they have no reasons to nott be forthcoming about theirs.
Your daughter was quite alluring tho. I always tip her at least a $20 each time she has the floor for pole-dancing. Butt, as I am no masher, I have never once - nott even CONsidered - axing her for a lap dance. I - even I - have some trivial vestiges of human decency. Butt a few pitchers of beer and I can easily leave those vestiges behind in the dust.
Just as Roger Miller sang "I'm a man of means by no means", I am a man of morals by no morals. I live only for my own morale. Someday ... someday ... I shall ride a freight train and be King of the Road. Just once.
Wealthiest person on iHub - that is like George Carlin's jumbo shrinp - or being the tallest midget. On the Peninsula, upper middle class ends around $50-75M, and you need a minimum of at least $100M liquid to be considered in any way "wealthy". A Hunnert Sticks is the minimum height to ride as a playah of ANY sort here. So neither bar nori can ride the rollercoaster - we are both equally riff-raff middle classmen in this pond.
And some of DaSquaw's fambly farmers are pretty good rollers. I know one fellow got $12M net after taxes in a land swap a few years back and he has prolly $10M in equipment in ONE of his machine sheds and those are his toys - nott work gear - those are his collector pieces - like Jay Leno and cars.. Another dude has his own helicopter. Some of these "hicks" are worth a decent coin purse. Most of this land has been in DaSquawFambly for at least a hunnert years and is nott mortgaged - owned ~OUTTright in trusts or close corporations (or trusts holding shares of S or C corps)...
Oddly, I know the moderator of this board. Personally. But he hasn't posted at IHub since 2021. I hope he's okay. I like your idea for a new board name! Better than my proposal, which was "Let's Post Irrelevant Made-Up Junk About Janice"! You'd think they'd at least use PM, or email, for heaven's sake.
I, too, though Bar had been a practicing attorney for all his working life. Perhaps he'll clarify.
In view of recent developments on DissBored, I submit that it should be renamed Scamps' Sewing Circle.
I knew that vile rumor couldn't be true! You are not a masher, even of strumpets!! Which my daughter is NOTT!!
I have never caught her strumping!!
What became of Tasty Fries:
Wasn't she a baggage clerk for some airline, TWA perhaps?
No. At least by the time I encountered her, she was married to a pilot. When that meant more than it does today. She also liked guns a lot.
Also wasn't the corp in the convenience store business for a short time, between running Florida tour boats and energy?
Yes. it was John Christiansen who tried to make that work...
"PatiBob did not "go down the drain" by any means. She'd known John Christiansen for years. She was another source, and madly funny. She was VERY capable of taking care of herself."
Wasn't she a baggage clerk for some airline, TWA perhaps?
Also wasn't the corp in the convenience store business for a short time, between running Florida tour boats and energy?
Also: You don't seem to understand. I only though TFRY might succeed for 10 days or a couple of weeks.
TFRY is how I learned about penny stocks. And unlike many, I took the lesson to heart.
I too always wondered how they kept the fry machines clean and sanitary and compliant with all the local health and safety requirements. But I never saw that issue discussed.
It was often discussed, at least on the SI board. And I think at RB as well. We in fact proposed that the machines were actually run and cared for by a midget who worked inside. Still makes sense to me.
Sure the boards were full of shills. What would you expect? At SI--I think it was SI--a group of us pumped it like crazy for about a week. It was great fun.
Well... Penny companies still change their business plans frequently. Usually they change management at the same time, but in the case of MTEI, some of it hung around. John Christiansen was one; Joe Gort, who continued to do PR for the "new" MTEI, was another. I once wrote a parody disclaimer for a PR and sent it to him. He used it.
It didn't become a coal mining company; it became a gas and oil exploration company, headed up by Jack ("The Honest Oil Man") Uselton. Jack was not honest, in any sense of the word. He and pretty much all of the rest of his family were career con men. And they did eventually end up slapped with criminal charges.
You have to remember that back then the internet, chat rooms, and online brokers were shiny and new. Investors weren't as aware as they are now of the possibility their "hidden gem" was a scam. But on the other hand, not all of them were on the up-and-up. As more and more questions were asked, a group of them decided to pay a visit to company headquarters in Texas. They called themselves the "Magnificent Seven." One of them was a source for me; he kept in touch as they met at their hotel, went to meet Uselton, and got together for dinner afterwards.
At company headquarters that morning, they saw reality. It was small and unimpressive. There was a picture of dogs playing poker on the wall. Uselton was drunk, and waved them into a room where they could inspect the books. They were not happy about what they saw. They did, however, remark on one thing that pleased them: the powder room was very clean.
Over dinner, they decided not to tell the rest of the investors how bad it was until the next day, so they'd have a chance to sell first.
PatiBob did not "go down the drain" by any means. She'd known John Christiansen for years. She was another source, and madly funny. She was VERY capable of taking care of herself.
Once the SEC suspended, Uselton moaned, "How did they find all this out?"
Remember Marc Tow? The attorney? He explained to me how the fiddle had worked: he'd bought up tons of gas and oil claims for delinquent taxes. Evidently that's a sort of hobby in West Virginia. The claims were very cheap, but of course the new owner was expected to pay the delinquent taxes. Tow and Uselton had no intention of doing that, but the PRs sounded good.
The SEC sued Uselton, Tow, and others in 2003. I think they got Tow again later on.
I didn't delete your post.
"Ah they said it was good." Ok, that settles it! Can I write a check!
I too always wondered how they kept the fry machines clean and sanitary and compliant with all the local health and safety requirements. But I never saw that issue discussed. The discussion boards were wall to wall with really obvious shills.
I'd be embarrassed to have put a single cent into TFRY
Mountain Energy was among the first stocks I bashed early on and mostly on Yahoo when it was a Miami tour boat company and before it got into coal mining (no kidding).
I had never seen dumber investors. For almost all it was their initial foray into the stock market. It was interesting watching PattyiBob and others go down the drain. What a transparent scam, but it was said that several investors lost their homes.
I contacted the SEC about MTEI, but I had other scams to focus on, plus running a sizable business and yes--- coaching my son in sports. LOLOL!
That is something that would be none of your business.
Really? Then why post about it? Why post your own name, as you've done many times, if you don't want people to address you by it?
And don't you think whether I have children, whether I every coached them in sports, and the rest if the stuff you and Bar were gossiping about here, is none of YOUR business?
I don't especially care what people say about me, because--as in this case--they almost always get whatever it is wrong. I got used to it long ago. But I don't think you're in any position to get huffy about "privacy".
Interesting.
The unofficial queen of the cybervigilantes is Janice Shell, a 50-year-old art historian who lives in Milan and got hooked on busting online con men after she was burned in an Internet investment scheme two years ago
But I'm really not interested anymore and I was only curious about the WSJ article and wondered where you got your expertise from.
That is something that would be none of your business.
It's a joint account and I explain the trades to him as he learns.
You don't have kids so I'm not sure you would understand.
And since he works full time he has little time to understand the nuances of the market right now.
As for my research I just read the article posted in the WSJ and wondered how true it all was.
Then why didn't you ask ME? And as I said, there were lots of WSJ/Dow Jones articles in which I was quoted in the late '90s.
And there was this, originally published in Fortune:
https://money.cnn.com/magazines/fortune/fortune_archive/1998/10/26/250019/index.htm
There was also this:
https://www.dallasnews.com/business/2013/02/15/the-mystery-of-southridge-enterprises-and-its-ghost-executives-who-were-supposedly-murdered-in-mexico/
I still manage my play money acct and my son's acct and that is enough for me.
Why doesn't your son manage his own account? He's an adult. And he'll need to learn how to do it at some point.
Oh snap! I forgot!
I'll add that was perhaps the first investment advice I gave my sons years ago: "Never Buy Penny Stocks." That was probably followed by the word "Never," several times.
Your sons may have listened to you. But not many people here would. So I see no reason to bother. What interests me are the stories, which are often hilarious. And, of course, seeing if the regulators will be interested.
So why was my post--the one to which you're replying--deleted, and by whom?
And that wasn't quite the TFRY story. There were machines; they just needed a final bit of "retooling" over a period of 10 years. But at one time they did have an agreement with the state of New Hampshire, through the governor. Later, they installed three machines at Villanova University. I thought of trying to find one of them, but never got round to it.
There were people--not tons, but not just one or two--who'd tried the product. Surprisingly, they said it was good. It was never entirely clear what wasn't working, but I suspect it had to do with cleaning the machines. And with keeping the uncooked potatoes fresh. Were they frozen? I don't remember.
And I'd also suspect there were safety issues, since the fries were actually deep fried IN the machines.
In 2007, the SEC sued Ed Kelly and his son:
https://www.sec.gov/litigation/litreleases/2007/lr20194.htm
The SEC suspended trading in TFRY in August 2009, and that was the end.
https://www.sec.gov/litigation/suspensions/2009/34-60508.pdf
I bought DUK at $15. I still own it..
Not cherry picking. He's just being lazy with stocks that are easy to sell. No one has to explain how Target and Walmart make money even to stock newbies.
Compare with two of my holdings, Cintas and Rockwell Automation. Not many people know what those two excellent blue chips do (and have done for decades).
Regulators Prepare to Seize and Sell First Republic
JPMorgan, PNC and Bank of America are said to be interested in acquiring the troubled lender after it is seized by the Federal Deposit Insurance Corporation.
By Lauren Hirsch, Maureen Farrell and Jeanna Smialek
Published April 29, 2023
Updated April 30, 2023, 12:33 p.m. ET
Federal regulators were racing over the weekend to seize and sell the troubled First Republic Bank before financial markets open on Monday, according to people with knowledge of the matter, in a bid to put an end to a banking crisis that began last month with the collapse of Silicon Valley Bank.
The effort, led by the Federal Deposit Insurance Corporation, comes after First Republic’s shares tumbled 75 percent since Monday, when the bank disclosed that customers had withdrawn more than half of its deposits. It became clear this past week that nobody was willing to ride to First Republic’s rescue before a government seizure because larger banks were worried that buying the company would saddle them with billions of dollars in losses.
The F.D.I.C. has been talking with banks that include JPMorgan Chase, PNC Financial Services and Bank of America about a potential deal, three of the people said. A deal could be announced as soon as Sunday, these people said, cautioning the situation was rapidly evolving and might still change. Any buyer would most likely assume the deposits of First Republic, eliminating the need for a government guarantee of deposits in excess of $250,000 — the limit for deposit insurance.
As of Sunday morning, at least a few bidders had been told that they had until noon to submit their offers, according to two people familiar with the matter. The Federal Deposit Insurance Corporation did not comment.
It’s possible that an agreement won’t be reached, in which case the F.D.I.C. would need to decide if it would seize First Republic anyway and take ownership itself. In that case, federal officials could invoke a systemic risk exception to protect those bigger deposits, something they did after the failures of Silicon Valley Bank and Signature Bank in March.
If officials decided against that, some economists warned that the consequences could be serious.
“The government needs to act in a way where the uninsured depositors get their money out in whole,” Lawrence Summers, a former Treasury secretary now at Harvard, said in an interview on Saturday, either through a takeover or by a government guarantee.
Failing to do so “runs a substantial risk of setting off a wave of further withdrawals from all but the largest of institutions,” he added.
The F.D.I.C. started sounding out potential buyers late last week as it became clear that there were few options outside a government takeover, one of the people said. By Friday, it had asked potential bidders to submit binding offers by Sunday, this person said. Those potential bidders have been given access to detailed information on First Republic’s finances, one of the people said.
The people requested anonymity because the process is confidential. Bloomberg and The Wall Street Journal reported the talks earlier. The F.D.I.C. declined to comment. The F.D.I.C. is working with the financial advisory firm Guggenheim Partners on the process, according to three people with knowledge of the situation.
Regulations preclude JPMorgan Chase and Bank of America from acquiring another deposit-taking bank because of their size, and regulators would have to grant an exemption if one of those banks were to acquire First Republic.
Some progressive Democrats were not thrilled about the idea of having a large bank like JPMorgan take over First Republic, given that such a deal would make the already huge institution larger, and that probably tilted things slightly toward PNC, one person familiar with the situation said. Some other smaller regional banks also showed some interest in First Republic, this person said.
JPMorgan Chase, PNC and Bank of America were part of a consortium of 11 large banks that temporarily deposited $30 billion into First Republic last month as part of an industry effort to prop up the bank. But that lifeline did little to put to rest concerns about First Republic’s viability.
First Republic, which is based in San Francisco and has most of its branches on the coasts where it serves affluent customers who work in industries like technology and finance, has been considered the most vulnerable regional bank since the banking crisis began unfolding in March with the sudden collapse of Silicon Valley Bank. First Republic spooked investors and customers anew by revealing on Monday that it had lost $102 billion in customer deposits, much of it in just three weeks in March, not including the $30 billion in deposits it received from the 11 big banks. The outflow was well over half the $176 billion it held at the end of last year.
Like Silicon Valley Bank, First Republic has also suffered losses on its loans and investments as the Federal Reserve rapidly raised interest rates to fight inflation.
First Republic had been hoping to strike a deal before being put into F.D.I.C. receivership, because a government seizure would mean shareholders of the company and some of its bondholders would probably lose all or most of their investment. Until Thursday night, the bank and its advisers remained in conversation with the government, some banks and private equity firms about a potential deal. But neither the government nor the banks, were ultimately interested in such an arrangement, one of the people said.
By Friday morning, it was clear to everybody involved that First Republic had no option other than a government takeover, the people said. First Republic’s stock closed Friday down another 43 percent and continued falling in extended trading.
First Republic was worth just $650 million as of Friday afternoon, down from more than $20 billion before the March crisis, a reflection of investors’ realization that shareholders could be wiped out.
A sale to a larger bank would likely mean that all of First Republic’s deposits are protected since they would become accounts at the acquiring bank. That includes uninsured deposits, which stood at $50 billion at the end of March — a sum that includes the $30 billion from the 11 big banks.
By seeking to line up a buyer for First Republic before formally putting the bank into receivership, regulators appear to be hoping to avoid the tumult that characterized the fall of Silicon Valley Bank. It took several weeks for government officials to sell that bank’s remnants to First Citizens BancShares, in a deal that included about $72 billion in loans at a deeply discounted price.
And the government appeared to be learning from the fall of Silicon Valley Bank in another way: The information it provided on First Republic’s financial situation to potential buyers was much more detailed than what it provided in the case of Silicon Valley Bank, according to one of the people familiar with the matter. Government officials spent additional time putting together a more cleaned-up set of facts that mapped out the bank’s relationships and risks.
The government prefers to find a buyer for a failed bank as quickly as possible to minimize potential losses to the government’s deposit insurance fund. The longer it takes to find a buyer, the more likely that customers and employees will abandon a failed bank, leaving behind a rapidly withering business.
PNC, one of the country’s largest regional banks that is based in Pittsburgh, had previously considered buying First Republic. But PNC couldn’t make a deal work because it would have to take on large losses from First Republic’s relatively low-rate home mortgages and other loans, according to one of the people. The challenges of accounting for First Republic’s loans put off other potential buyers, too.
JPMorgan’s chief executive, Jamie Dimon, was a key architect of the plan to inject $30 billion into First Republic Bank. During the 2008 financial crisis, Mr. Dimon led the rescue of two banks — Bear Stearns and Washington Mutual.
https://www.nytimes.com/2023/04/29/business/first-republic-seizure-fdic.html
Dueling egos. lol. The lesson learned is don't take stock tips from anonymous posters.
You never know who you are dealing with.
I've written about it many times on the boards. Bar is better at research than you are, Pete. You are not at all good at it.
Please leave my name out of your online posts here.
As for my research I just read the article posted in the WSJ and wondered how true it all was.
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Today's large cap can quickly become tomorrow's small cap or vice versa. That said all stocks are fair game here except pinks.
What size is "small"? There are many definitions. Some people define a small public company as one with a market cap under $1 billion. Others define small cap as under $2 billion. And there are yet other definitions. Over the last two decades the word "small" has come to mean larger and larger companies! To confuse matters, NASDAQ's small cap market system continues to list truly small public companies, many of which would be classified as nano-cap by the definitions, below. Here are some current definitions from Investopedia and Investor Words.
Market Cap Investopedia Investor Words
Mega-Cap over $200 billion over $250 billion
Large-Cap $10 billion - $200 billion. $5 billion - $250 billion
Mid-Cap $2 billion - $10 billion $1 billion - $5 billion
Small-Cap $300 million - $2 billion $250 million - $1 billion
Micro-Cap $50 million - $300 million under 250 million
Nano-Cap under $50 million --
Some T/A sites:
http://www.americanbulls.com/
http://www.stockta.com/
http://www.stockconsultant.com./
A screener that may be useful:
http://moneycentral.msn.com/investor/finder/deluxestockscreen.aspx?query=Institutional+Ownership+Up+....
http://www.secform4.com/index.php
Please- No Pink Sheet Stocks on the board and don't disparage others and their trading. Thank you!
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