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monocle, not according to this article: A quote from Goldman Sachs on March 20, 2023: "Goldman Sachs said Wednesday that growing stress in the banking sector has boosted the odds of a US recession within the next 12 months. The bank now believes that the American economy has a 35% chance of entering a recession within a year, up from 25% before the banking sector meltdown started."
https://www.cnn.com/2023/03/17/business/global-banking-crisis-explained/index.html
With regard to SPAC redemptions, I found this article. "SPACs began to wane in popularity in 2022 and the first half of 2023." though there were 11 SPAC IPO deals that came together in the first quarter 2023 vs 8 SPAC IPOS that came together in first quarter 2022.
So, Scooter was right to some degree.
https://www.skadden.com/-/media/files/publications/2023/06/de_spac_transaction_trends_in_2023.pdf
John, what proof can you provide that NioCorp is close to bankruptcy. Asking for a friend.
Why would they? The opportunity to convert their shares was over more than 1 year ago. The banking crisis blew up the deal IMO and then the share price started collapsing. Why would they jump in seeing the share price collapse? They have moved on. Now is the time to get back in with the share price being so low and NioCorp seemingly on the cusp of major financing, not immediately after the failed merger or anytime until the share price fell below $3.00/share IMO. The merger was a disaster.
You still have not provided an alternative reason backed up with facts why those dollars never came to NioCorp even though approx 97% of GX shareholders voted for the merger.
In all fairness, mgt has not done a good job at staying on timelines. That's a fact.
PR, no need to ignore anyone. If you can provide facts to back up your position, they become indisputable. Opinions are only as good as facts to back them up otherwise, it's just opinion and speculation.
No, my guess is Neil Shah ran for Mayor Pro-Tem as an act of civic pride in response to the devastating fires that raged through the town of Superior Colorado in 2021.
https://www.cpr.org/2021/12/30/boulder-county-grass-fires/
"The fire ..... became the most destructive fire in Colorado history in terms of buildings destroyed,[quantify] surpassing the 2013 Black Forest fire."
https://en.wikipedia.org/wiki/Marshall_Fire
No, the combination of GX shareholder money and move to NASDAQ prior to the merger was promising. Unfortunately, NioCorp received only a small fraction of the $200,000,000 in GX shareholder money but did succeed in moving to NASDAQ which qualified NioCorp to join the Russell 3000 where institutions were required to purchase a certain # of NioCorp shares in order to stay on the Russell 3000 and gave NioCorp access to more financial opportunities. Those additional opportunities would never have presented themselves staying on the OTC (Over the Counter Market). The current EXIM and Stellantis financing opportunities were not announced until after NioCorps move to NASDAQ.
https://www.forbes.com/advisor/investing/russell-3000-index/
The index measures the performance of the largest 3,000 U.S. companies representing approximately 96% of the investable U.S. equity market.
Why would they? The opportunity to convert their shares was over more than 1 year ago. The banking crisis blew up the deal IMO and then the share price started collapsing. Why would they jump in seeing the share price collapse? They have moved on. Now is the time to get back in with the share price being so low and NioCorp seemingly on the cusp of major financing, not immediately after the failed merger or anytime until the share price fell below $3.00/share IMO. The merger was a disaster.
You still have not provided an alternative reason backed up with facts why those dollars never came to NioCorp even though approx 97% of GX shareholders voted for the merger.
OI, I would have to review that clip again. I believe what he inferred in that video clip was that prior to coming to an agreement with GX he had a built in reluctance to SPACS but after speaking with GX, he changed his mind and thought merging with the GX SPAC would be a success. I am paraphrasing not quoting. Unfortunately for him and us, the bank failure put a kibosh on up to $200,000,000 in funding moving to NioCorp and blindsided everyone in the process: NioCorp, GX, the Federal Reserve, global industry regulators and banks Worldwide. This was not a small matter isolated to one state. My bringing this up is not a defense of mgt, this is a defense of indisputable facts of a major financial crisis occurring just days prior to GX shareholders election to convert or redeem and a plausible explanation for why we never saw those GX dollars flow in to NioCorps coffers. If anyone has an alternative explanation, please share and back up your position with facts not just opinions.
"To prevent the situation from affecting more banks, global industry regulators, including the Federal Reserve, the Bank of Canada, Bank of England, Bank of Japan, European Central Bank, and Swiss National Bank intervened to provide extraordinary liquidity."
Good morning T&T and thank you for replying. Again, If you do not agree with my assessment, please by all means provide your own reason why you think GX shareholders did not convert their shares to NioCorp shares but to lend credibility to your position, please support your position with articles or other fact based independent material to support your theory. I am open minded and all ears.
In the meantime until you have gathered your research and provide material backing your position, here are the indisputable facts of what occurred just days leading up to the election of GX shareholders to convert or redeem their shares. As a reminder, the vast majority of GX shareholders had previously voted in favor of the merger as did NioCorp shareholders. .
I should footnote that First Republic Bank also had 6 branches in New York City and branches in 6 states and that First Republic was the largest bank to fail since 2008.
https://daily.gazette.com/article/282050511850390
The 3 bank failures were severe enough that they threatened banks Worldwide as evidenced in the article below: "To prevent the situation from affecting more banks, global industry regulators, including the Federal Reserve, the Bank of Canada, Bank of England, Bank of Japan, European Central Bank, and Swiss National Bank intervened to provide extraordinary liquidity."
2023 United States banking crisis
The 2023 United States banking crisis was a series of bank failures and bankruptcies that took place in early 2023, with the United States federal government ultimately intervening in several ways. Over the course of five days in March 2023, three small-to-mid size U.S. banks failed, triggering a sharp decline in global bank stock prices and swift response by regulators to prevent potential global contagion. Silicon Valley Bank (SVB) failed when a bank run was triggered after it sold its Treasury bond portfolio at a large loss, causing depositor concerns about the bank's liquidity. The bonds had lost significant value as market interest rates rose after the bank had shifted its portfolio to longer-maturity bonds. The bank's clientele was primarily technology companies and wealthy individuals holding large deposits, but balances exceeding $250,000 were not insured by the Federal Deposit Insurance Corporation (FDIC). Silvergate Bank and Signature Bank, both with significant exposure to cryptocurrency, failed in the midst of turbulence in that market.
In response to the bank failures, the three major U.S. federal bank regulators announced in a joint communiqué that extraordinary measures would be taken to ensure that all deposits at Silicon Valley Bank and Signature Bank would be honored.[1] The Federal Reserve established a Bank Term Funding Program (BTFP) to offer loans of up to one year to eligible depository institutions pledging qualifying assets as collateral.[2][3]
To prevent the situation from affecting more banks, global industry regulators, including the Federal Reserve, the Bank of Canada, Bank of England, Bank of Japan, European Central Bank, and Swiss National Bank intervened to provide extraordinary liquidity.[4][5][6]
By March 16, large interbank flows of funds were occurring to shore up bank balance sheets and some analysts were talking of a possibly broader U.S. banking crisis.[7] The Federal Reserve discount window liquidity facility had experienced approximately $150 billion in borrowing from various banks by March 16.[8]
Soon after the bank run at SVB, depositors quickly began withdrawing cash from San Francisco-based First Republic Bank (FRB), which focused on private banking to wealthy clientele. Like SVB, FRB had substantial uninsured deposits exceeding $250,000; such deposits constituted 68% of the bank's total at year-end 2022, declining to 27% by the end of March, as $100 billion in uninsured deposits were withdrawn. Despite a $30 billion capital infusion from a group of major banks in March, FRB continued to destabilize and its stock price plummeted as the FDIC prepared to take it into receivership and find a buyer on April 29.[9][10] On May 1, the FDIC announced that First Republic had been closed and sold to JPMorgan Chase.[11][12]
In the lead-up period, many banks within the United States had invested their reserves in U.S. Treasury securities, which had been paying low interest rates for several years. As the Federal Reserve began raising interest rates in 2022 in response to the 2021–2023 inflation surge, bond prices declined, decreasing the market value of bank capital reserves, causing some banks to incur unrealized losses; to maintain liquidity, Silicon Valley Bank sold its bonds to realize steep losses.[7] Also, several banks gained market exposure to cryptocurrency and cryptocurrency-related firms prior to and during the COVID-19 pandemic;[13] the 2020–2022 cryptocurrency bubble popped in late 2022.[14] In this environment, three such banks failed or were shut down by regulators: The first bank to fail, cryptocurrency-focused Silvergate Bank, announced it would wind down on March 8, 2023, due to losses suffered in its loan portfolio.[15][16] Two days later, upon announcement of an attempt to raise capital, a bank run occurred at Silicon Valley Bank, causing it to collapse and be seized by regulators that day.[15] Signature Bank, a bank that frequently did business with cryptocurrency firms, was closed by regulators two days later on March 12, with regulators citing systemic risks.[15][17][18] The collapses of First Republic Bank, Silicon Valley Bank and Signature Bank were the second-, third- and fourth-largest bank failures in the history of the United States, respectively, smaller only than the collapse of Washington Mutual during the 2007–2008 financial crisis.[19][failed verification]
In 2019, the Federal Reserve's "Tailoring rules" changed, increasing minimum asset threshold from $50 billion to $100 billion and reduced the number of required stress testing scenarios, allowing banks with under $100 billion to have reduced liquidity standards.[20] Signature Bank and First Republic Bank were under the $100 billion total assets for the Federal Reserve's tailoring rules, allowing the banks to have reduced regulation for liquidity.[21][22][23] Some have questioned if First Republic Bank would have had a bank run if there were similar regulation to EU countries in the United States.[24]
Liquidation of Silvergate Bank
Further information: Silvergate Bank § Liquidation
Background
Silvergate Bank is a California-based bank that began operations in 1988 as a savings and loan association. In the 2010s, the bank began to provide banking services to players within the cryptocurrency market. The bank sought regulatory approval in the summer of 2014 to do business with cryptocurrency firms. The bank expanded the assets on its balance sheet significantly—doubling its assets in its 2017 fiscal year to $1.9 billion—by servicing cryptocurrency exchanges and other companies who were involved in the cryptocurrency business that could not secure financing from larger, more conservative banks. Despite its rapid growth, the company maintained a small physical footprint; in 2018, the bank had only three branches, all located in Southern California.[25] By the fourth quarter of 2022, 90% of the bank's deposits had become cryptocurrency-related, with over $1 billion in deposits being tied to Sam Bankman-Fried.[26]
In addition to providing traditional banking services to its cryptocurrency clients, the bank operated as a clearinghouse for its banking clients; it involved itself in the business of resolving and settling transactions in real-time through its proprietary Silvergate Exchange Network. The network allowed a client to send payments in U.S. dollars from its accounts with Silvergate to those of another client of the bank without requiring an interbank wire transfer. A large number of cryptocurrency companies set up accounts with the bank to take advantage of Silvergate's relatively quick transaction settling times.[25]
Silvergate stock price (2019–2023)
Despite conducting the majority of its business with cryptocurrency companies, Silvergate's investment portfolio was fairly conservative; the company took large positions in mortgage-backed securities as well as U.S. bonds.[27] These sorts of assets, while reliable to be paid-in-full through their maturity date, carry risks associated with changes in interest rates; there is an inverse relationship between the mark-to-market value of a bond and the bond's yield. As interest rates shot up during the 2021–2023 inflation surge, the mark-to-market price of these securities decreased significantly. When these losses are unrealized, this does not typically cause the bank to cease operating, as the bank will receive payment-in-full under the original terms of the bond. However, if forced to sell these securities at a lower mark-to-market price, the losses on these types of assets become realized, posing significant risks to the bank's ability to continue to operate.[27]
Events
Silvergate was hit with a bank run in the wake of the bankruptcy of FTX; deposits from cryptocurrency-related firms dropped by 68% at the bank, with the bank facing requests from its clients to withdraw upwards of $8 billion in deposits.[26] As Silvergate did not have enough cash-on-hand to satisfy the deposit withdrawals, the bank began to sell its assets at a steep loss; the company realized a loss of $718 million on withdrawal-related asset sales in the fourth fiscal quarter of 2022 alone.[26][27][28] The bank, in a public statement, said that it was solvent at the end of Q4 2022, with an asset sheet containing assets of $4.6 billion in cash and $5.6 billion in liquid debt securities, with $3.8 billion in deposit obligations.[26] Silvergate faced tight financial constraints in the coming months, selling assets at a loss and borrowing $3.6 billion from the Federal Home Loan Bank of San Francisco to maintain its liquidity.[29] Silvergate wrote in a regulatory filing on March 1 that the bank risked losing its status as a well-capitalized bank and that the bank faced risks relating to its ability to continue operating.[16][30]
Facing continued losses from sales of securities at mark-to-market price, Silvergate released a public notice on March 8, 2023, saying that it would undergo voluntary liquidation and would return all deposited funds to their respective owners.[16][18][27]
Collapse of Silicon Valley Bank
Main article: Collapse of Silicon Valley Bank
Background
Silicon Valley Bank (SVB) was a commercial bank founded in 1983 and headquartered in Santa Clara, California. Until its collapse, SVB was the 16th largest bank in the United States and was heavily skewed toward serving companies and individuals from the technology industry.[31][32][33] Nearly half of U.S. venture capital-backed healthcare and technology companies were financed by SVB.[34] Companies such as Airbnb, Cisco, Fitbit, Pinterest, and Block, Inc. have been clients of the bank.[35] In addition to financing venture-backed companies, SVB was well known as a source of private banking, personal credit lines, and mortgages to tech entrepreneurs.[36] According to the FDIC, it had $209 billion in assets at the end of 2022.[37]
Silicon Valley Bank recorded an increase of its deposit holdings during the COVID-19 pandemic, when the tech sector experienced a period of growth. In 2021, it purchased long-term Treasury bonds to capitalize on the increased deposits. However, the current market value of these bonds decreased as the Federal Reserve raised interest rates to curb the 2021–2023 inflation surge.[38] Higher interest rates also raised borrowing costs throughout the economy and some Silicon Valley Bank clients started pulling money out to meet their liquidity needs.[39]
Events
To raise cash to pay withdrawals by its depositors, SVB announced on March 8 that it had sold over US$21 billion worth of securities, borrowed US$15 billion, and would hold an emergency sale of some of its treasury stock to raise US$2.25 billion. The announcement, coupled with warnings from prominent Silicon Valley investors, caused a bank run as customers withdrew funds totaling US$42 billion by the following day.[39]
On March 10, 2023, as a result of the bank run, the California Department of Financial Protection and Innovation (DFPI) seized SVB and placed it under the receivership of the FDIC. The FDIC established a deposit insurance national bank, the Deposit Insurance National Bank of Santa Clara, to service insured deposits and announced that it would start paying dividends for uninsured deposits the following week; the dividends were funded by proceeds from the sale of SVB assets. Some 89 percent of the bank's US$172 billion in deposit liabilities exceeded the maximum insured by the FDIC.[40][41] Two days after the failure, the FDIC received exceptional authority from the Treasury and announced jointly with other agencies that all depositors would have full access to their funds the next morning.[42][43] An initial auction of Silicon Valley Bank assets on the same day attracted a single bid,[44] after PNC Financial Services and RBC Bank backed away from making offers.[45][46] The FDIC rejected this offer and plans to hold a second auction to attract bids from major banks, now that the bank's systemic risk designation allowed the FDIC to insure all deposits.[44] The bank was later reopened as a newly organized bridge bank, Silicon Valley Bridge Bank, National bank|N. A.[47]
On March 26, 2023, the FDIC announced that First Citizens BancShares would acquire the commercial banking business of SVB.[48][49] As part of the deal, First Citizens brought around $56.5 billion in deposits and $72 billion of SVB's loans discounted by $16.5 billion, while around $90 billion of SVB's securities continue to remain in receivership.[50] The FDIC received about $500 million-worth of equity appreciation rights linked to First Citizens' shares.[51] SVB's 17 branches reopened under the First Citizens brand the next day, with all SVB depositors becoming depositors of First Citizens. SVB Private was initially going to be auctioned separately but First Citizens later acquired the business as well.[52] The UK arm of SVB was acquired by HSBC, which announced it would rename the business to HSBC Innovation Banking.[53][54]
Collapse of Signature Bank
Further information: Signature Bank § Collapse
Background
Signature Bank stock price (2006–2023)
Signature Bank was a New York City-based bank founded in 2001.[17] The bank began as a subsidiary of Bank Hapoalim that took on clients with assets of around $250,000, lending to small businesses based in New York City and in the surrounding metropolitan area.[55] The bank provided financing within the multifamily residential rental housing market in the New York metropolitan area beginning in 2007,[56][57] though it began to reduce its exposure to the market during the 2010s.[58] By 2019, just over four-tenths of the value of the bank's loans were made to multifamily homeowners in the New York metropolitan area, comprising $15.8 billion of the bank's then-$38.9 billion in net loans.[58][59]
Beginning in 2018, Signature Bank began to court customers in the cryptocurrency industry, securing hires that were experienced in the area with the goal of moving away from its dependence on real estate lending.[60] The quantity of deposits held at the bank expanded significantly, with deposits increasing from about $36.3 billion at the end of the 2018 fiscal year to $104 billion by August 2022; that month, over one-quarter of the bank's deposits held were those of cryptocurrency companies.[59][60] Its cryptocurrency-sector clients included large cryptocurrency exchange operators, such as Celsius Network and Binance.[18][60] By early 2023, Signature Bank had become the second largest provider of banking services to the cryptocurrency industry—second only to Silvergate Bank.[61]
In addition to providing traditional banking services to cryptocurrency clients, Signature Bank opened a proprietary payment network for use among its cryptocurrency clients. The payment network, Signet, had opened in 2019 for approved clients, and allowed the real-time gross settlement of fund transfers through the blockchain without third parties or transaction fees. By the conclusion of 2020, Signature Bank had 740 clients using Signet.[62][63] The network continued to expand during the following years; both Coinbase and the TrueUSD dollar-pegged stablecoin had become integrated with Signet in 2022 and 2021, respectively.[64]
Events
Reporters swarm a woman in white hair directly outside of an entrance to a bank.
Reporters ask questions to Signature Bank customers exiting a New York location.
As cryptocurrency prices dropped significantly in 2022, particularly so after the collapse of cryptocurrency exchange FTX; depositors in Signature Bank began to withdraw deposits in the tune of billions of dollars; by the end of 2022, deposits in the bank totaled around $88.6 billion, down from $106.1 billion in deposits held at the beginning of the year—a time when over one-quarter of deposits were held by digital asset-related entities.[18][59] Towards the end of 2022, Signature Bank cut business ties with cryptocurrency exchange Binance, seeking to reduce the bank's exposure to risk associated with the cryptocurrency market.[18] According to Signature Bank board member Barney Frank, Signature Bank was hit with a multi-billion dollar bank run on Friday, March 10, with depositors expressing concern about cryptocurrency-related risks affecting the bank.[18] Investor confidence in the bank was also badly shaken, and the bank's stock declined by 23% on that Friday—the day on which Silicon Valley bank collapsed—marking the then-largest single-day decline of the Signature Bank's value in its 22-year history.[65]
On March 12, 2023, two days after the collapse of Silicon Valley Bank, Signature Bank was closed by regulators from the New York State Department of Financial Services in what is the third-biggest banking collapse in U.S. history.[15][18] The bank proved unable to close a sale or otherwise bolster its finances before markets opened on Monday morning in order to protect its assets after customers began withdrawing their deposits in favor of bigger institutions,[18] and shareholders of the bank lost all invested funds.[66] The bank was placed under receivership by the FDIC, which immediately established Signature Bridge Bank, National bank|N. A. to operate its marketed assets to bidders.[67]
Signature Bank had been under multiple federal investigations, ongoing at the time of the bank's collapse, regarding the rigor of its anti-money laundering measures. The U.S. Department of Justice had opened a criminal probe into whether the firm was performing due diligence when opening up new accounts and whether it was doing enough to detect and report potential criminal activity by its clients. The U.S. Securities and Exchange Commission had opened a separate, related civil probe.[68][69]
On March 19, the New York Community Bank (NYCB) agreed to purchase around $38.4 billion in Signature's assets for $2.7 billion. Due to the deal, 40 Signature branches were rebranded to Flagstar Bank, one of NYCB's subsidiaries.[70]
Collapse of First Republic Bank
Further information: First Republic Bank § Collapse
First Republic Bank Stock Price
Background
[icon]
This section needs expansion with: a summary with a level of detail about the general operations and history equivalent to the other banks. You can help by adding to it. (May 2023)
First Republic Bank (FRB) was based in San Francisco as a commercial bank and provider of wealth management services. It catered to high-net-worth individuals and operated 93 offices in 11 states, primarily in New York, California, Massachusetts, and Florida.[22] It was the 14th largest U.S. bank at the end of 2022.[71]
Events
Intense scrutiny and pressure were applied to other U.S. banks, including FRB.[72] On March 13, its shares fell by 62%.[73] As the bank faced significant liquidity issues, on March 16, it received a $30 billion lifeline in the form of deposits from a number of major U.S. banks, on top of a $70 billion financing facility provided by JPMorgan Chase & Co.[74][75] Eleven of the largest U.S. banks participated in the rescue effort,[76] under the direction of Jamie Dimon.[77]
On March 19, S&P Global downgraded the credit rating of First Republic Bank further into junk by three notches saying that the private-sector rescue effort "may not solve the substantial business, liquidity, funding, and profitability challenges that we believe the bank is now likely facing."[78] In its quarterly report in April, the bank said that deposits had plunged by more than $100 billion. The announcement caused the bank's share price to fall by more than 20%.[79]
On April 28, the bank announced plans to begin selling its bonds and securities at a loss to raise equity and also begin laying off people.[80] Multiple advisor teams began to leave the bank as well.[81] On that day, it was announced that the FDIC was considering seizing the bank, causing its stock price to plunge another 43% to $3.50.[80][82] After falling another 42% in after hours trading, the FDIC confirmed its imminent takeover of the bank.[83][84] In 2023, the cumulative decrease in stock price was 97%.[85] The next day, the FDIC approached various banks, including JPMorgan Chase, PNC and Bank of America, saying they had until April 30 to place bids for First Republic Bank.[86]
On the morning of May 1, the California Department of Financial Protection and Innovation announced that FRB had been closed, and its assets were sold to JPMorgan for $10.6 billion.[87]
Aftermath
This section needs to be updated. The reason given is: Past events appear to be in the future tense due to reporting at the time of writing. The section could use an update with more recent sources to better reflect what happened looking back. Please help update this article to reflect recent events or newly available information. (December 2023)
Bank Term Funding Program
In response to the bank failures of March, the government took extraordinary measures to mitigate fallout across the banking sector.[18] On March 12, Federal Reserve created the Bank Term Funding Program (BTFP), an emergency lending program providing loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions.[2][3][88] The program was designed to provide liquidity to financial institutions following the collapse of Silicon Valley Bank and other bank failures, and to reduce the risks associated with current unrealized losses in the U.S. banking system that totaled over $600 billion at the time of the program's launch.[89] Funded through the Deposit Insurance Fund,[90] the program offered loans of up to one year to eligible borrowers who pledged as collateral certain types of securities including U.S. Treasuries, agency debt, and mortgage-backed securities.[91] The collateral was valued at par instead of open-market value, so a bank could borrow on asset values that have not been impaired by a series of interest rate hikes since 2022. The Federal Reserve also eased conditions at its discount window. The Department of the Treasury said it would make available up to $25 billion from its Exchange Stabilization Fund as a backstop for the program.[92] In January 2024, the Federal Reserve raised the interest rate on new BTFP loans, stating loans outstanding in the program as of January 17 were $161.5 billion.[93] The program ceased offering new loans on March 11, 2024.[94]
Government discussion of other funding
In addition to working with their counterparts at the FDIC and U.S. Treasury to provide liquidity to banks through the BTFP, by March 2023, the Federal Reserve had begun to internally discuss implementing stricter capital reserve and liquidity requirements for banks with between $100 billion and $250 billion in assets on their balance sheets.[95] A review of regulations affecting regional banks had been ongoing since 2022, as Federal Reserve vice chairman Michael Barr and other officials in the Biden Administration had become increasingly concerned about the risk posed to the financial system by the rapidly increasing size of regional banks.[95][96]
U.S. investigations
The collapse of Silicon Valley Bank itself also spurred federal investigations from the U.S. Securities and Exchange Commission as well as the United States Department of Justice. Within the scope of both probes is the sales of stock made by senior officers of Silicon Valley Bank shortly before the bank failed, while the SEC's investigation also includes a review of past financial-related and other risk-related disclosures made by Silicon Valley Bank to evaluate their accuracy and completeness.[97]
Internal investigations at the FDIC and Federal Reserve noted that deregulation, not subjecting medium-sized banks to high scrutiny, reduced enforcement of remaining regulations, and government staffing shortages weakened oversight and allowed mismanagement of banks to cause their collapse.[98]
Economic impact
As depositors began to move money en masse from smaller banks to larger banks,[18][72] on Monday, March 13, shares of regional banks fell.[73]
PacWest Bank stock price
Western Alliance Bancorporation
stock price
Citizens Business Bank (CVBF)
Stock Price
Pacific Premier Bancorp (PPBI) stock price
Bank of Hope (HOPE) Stock Price
Valley Bank (VLY) Stock Price
Bitcoin price
Following SVB and Signature's collapses, Western Alliance Bancorporation share price fell 47% and PacWest Bancorp was down 21% recovering after their trading was halted.[99][100] Moody's downgraded its outlook on the U.S. banking system to negative, citing what it described as "rapid deterioration" of the sector's financial footing.[101] It also downgraded the credit ratings of several regional banks, including Western Alliance, First Republic, Intrust Bank, Comerica, UMB Financial Corporation, and Zions Bancorporation.[102] Large declines in regional bank stocks continued after First Republic's failure.[103]
U.S. President Joe Biden made a statement about the first three bank failures on March 13, and asserted that government intervention was not a bailout and that the banking system was stable.[104][105]
The initial bank failures led to speculation on March 13 that the Federal Reserve could pause or halt rate hikes.[106] Beginning on March 13, traders began modifying their strategies in the expectation that fewer hikes than previously expected would occur.[107] Some financial experts suggested that the BTFP, combined with a recent practice of finding buyers who would cover all deposits, may have effectively removed the FDIC's $250,000 deposit insurance limit.[108] However, Treasury Secretary Janet Yellen clarified that any guarantee beyond that limit would need the approval of the Biden administration and Federal regulators.[109]
The initial three bank failures and resulting pressures on other U.S. regional banks were expected to reduce available financing in the commercial real estate market and further slow commercial property development.[110] The Federal Reserve's discount window liquidity facility saw around $150 billion in borrowing from various banks by March 16,[8] more than 12 times the $12 billion that the BTFP provided.[111] Since the majority of First Republic's long term assets were in municipal bonds, it was unable to make full use of the BTFP as those assets did not qualify as an eligible collateral.[112]
By March 16, large inter-bank flows of funds were occurring to shore up bank balance sheets and numerous analysts were reporting on a more general U.S. banking crisis. Many banks had invested their reserves in U.S. Treasury securities, which had been paying low interest rates. As the Federal Reserve began raising rates in 2022, bond prices declined decreasing the market value of bank capital reserves, leading some banks to sell the bonds at steep losses as yields on new bonds were much higher.[7]
On March 17, President Joe Biden stated that the banking crisis had calmed down,[113] while the New York Times said that the March banking crisis was hanging over the economy and had rekindled fear of recession as business borrowing would become more difficult as many regional and community banks would have to reduce lending.[114][115]
Late on Sunday, the Federal Reserve and several other central banks announced significant USD liquidity measures in order to calm market turmoil.[116] In a "coordinated action to enhance the provision of liquidity through the standing U.S. dollar swap line arrangements", the U.S. Federal Reserve, the Bank of Canada, Bank of Japan, European Central Bank, and Swiss National Bank joined to organize daily U.S. dollar swap operations. These swaps had previously been set up to occur on a weekly cadence.[117]
The share price of PacWest had fallen sharply on 3 May after the bank announced that it was 'considering strategic options including a sale'. On 4 May share trading was suspended as the sell-off marked a further 42% loss with other US regional banks, including First Horizon, Metropolitan Bank and Western Alliance, also being affected.[118][119]
In May 2023, FDIC proposed imposing higher fees on an estimated 113 of the largest banks to cover the costs of bailing out uninsured depositors.[120]
International impact
By 19 March, concerns about the banking sector internationally had increased.[4][5][6][121][122] That day, Swiss bank UBS Group AG bought its smaller competitor Credit Suisse in an emergency arrangement brokered by the Swiss government. One month before the events in the United States, Credit Suisse had announced its largest annual loss since the 2008 financial crisis, as clients continued withdrawing their cash at a rapid pace; $147 billion had been withdrawn in the fourth quarter of 2022. It also disclosed it had found "material weaknesses" in its financial reporting. Its largest investor, Saudi National Bank, announced on March 15 that it would not provide more support to Credit Suisse. Its share price plunged 25% on the news and UBS stepped in to buy the bank. Axel Lehmann, former chairman of the bank, later sought to blame the American bank failures for triggering Credit Suisse's demise, though other analysts disputed that characterization. The bank had experienced many years of multi-billion dollar losses, scandals, executive turnover and weak business strategy.[123]
Late on Sunday the Federal Reserve and several other central banks announced significant USD liquidity measures in order to calm market turmoil.[121] In a "coordinated action to enhance the provision of liquidity through the standing U.S. dollar swap line arrangements", the U.S. Federal Reserve, the Bank of Canada, Bank of Japan, European Central Bank (ECB) and Swiss National Bank joined to organize daily U.S. dollar swap operations. These swaps had previously been set up to occur on a weekly cadence.[117]
On 21 March, The Business Times reported that Asian central banks were "unlikely to be greatly influenced by the banking crisis in the United States and Europe",[124] but Australia's central bank governors met and publicly indicated a potential pause in recent rate hikes. ABC News reported that the challenge for central banks is determining if the "banking turmoil close to crashing the real economy, or is inflation still the greater threat."[125] In Japan the three main lenders, Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group, lost share value between 10% and 12% due to the market turmoil and their exposure to the bond market.[126] Japan's central bank held a crisis meeting in mid-March while the Topix banks index fell 17%. The fall was led by fears over the SVB collapse and the risks in Japan's regional banking sector, partly because of exposure to US interest rate hikes.[127]
The cost to insure against default on Deutsche Bank debt rose substantially on Friday, 24 March, with the 5-year CDS for the bank's debt rising 70%.[128] The ECB and other European central banks raised interest rates the same day.[129] The European STOXX 600 index fell around 4% with shares in Deutsche Bank down more than 14% at one point, closing the day at a loss of around 8%.[130] The UK's banking index also fell around 3% led by falls of around 6% for both Barclays and Standard Chartered and a 4% drop for NatWest. Shares in other European banks also fell, among them Commerzbank, Austria's Raiffeisen Bank and the French Société Générale.[131][132][133] According to the European Commission's Paolo Gentiloni, finance ministers in the Euro zone called on the commission to close loopholes in Crisis Management and Deposit Insurance (CMDI) provision, starting in the second quarter of 2023.[134]
Chinese banks experienced little negative effect. According to Bloomberg News, almost all of the 166 top performers during the market turmoil were in China. The banking crisis in the U.S. and Europe highlighted the relative stability of the Chinese banking system. While China's recovery from the pandemic remains fragile, inflation there is muted, and the People's Bank of China had adjusted interest rates at a slower pace than Western central banks.[135]
The turbulence in the financial system caused India's central bank to put any further hikes in interest rate on hold on 6 April, with governor Shaktikanta Das saying "it's a pause not a pivot". A 25 basis point increase had been widely expected. Central banks in Australia, Canada and Indonesia also paused any further increases.[136]
While rising interest rates give banks greater returns on customer's loans, the tighter financial conditions meant the sector saw a downturn in equity funding, with the S&P 500 bank index (SPXBK) in April down 14% year to date on expectation of lower quarterly earnings for some US banks.[137] Effects on the secondary market were also expected.[138] On 11 April the International Monetary Fund downgraded its forecast for GDP growth globally in 2023 from 2.9% to 2.8%, saying "Uncertainty is high and the balance of risks has shifted firmly to the downside so long as the financial sector remains unsettled". The forecast marked a slowdown from 3.4% in 2022, but predicted growth could rise modestly to 3.0% in 2024.[139] The IMF had been cutting its forecast since spring 2022.
I have never spoken to NioCorp about what transpired in the merger. I posted within days or weeks after the merger when the majority of GX shareholders elected not to convert that I felt it was due to the banking crisis. This is not a new position. I have held that opinion for over 1 year long before NioCorp commented why dollars didn't come in and I never spoke to NioCorp about it. It was also not a small banking crisis. The SVB crisis spread to Fist Republic and another bank and bank depositors starting pulling their money out of those banks. SVB and First Republic were solid banks with multi million and billion dollar clients who started pulling their money from both banks and forced both banks in to such a weak position after so many profitable years that the Federal Govt had to intervene. Chase Bank then swooped in and acquired First Republic. If that was the 3rd worst banking crisis and 2nd largest bank failure since the Depression and the Recession, why is it so hard to believe it was the catalyst for disrupting the GX conversion? At the time, I felt we were slipping in to another banking crisis akin to 2008. Not sure why some folks are minimizing the seriousness of what transpired just prior to GX shareholders electing to convert their shares in to NioCorp shares or redeem their investment dollars in GX. And that banking crisis lingered for many months afterwards as a threat to both the banking world and to many small banks throughout the US.
The link below backs up my opinion as to the catalyst for the GX shareholders failure to convert their shares to NioCorp. Please feel free to read through the material.
https://en.wikipedia.org/wiki/2023_United_States_banking_crisis
If this was not the reason why GX shareholders did not convert, please share your theory and please provide articles or material to support your theory? I'm open minded and all ears.
I will not discount that suggestion. Not sure how the deal came to be.
Sorry NorCal. Not countering what you said. Just expressing my perspective not discounting yours. By all means, hold on to your opinion. I'm not giving mgt or GX a pass. Just observing that in the middle of the conversion, out of the blue, a banking crisis emerged and crippled the plan to bring GX shareholder dollars over to NioCorp. If anyone can convince with proof that there was another reason, by all means, state your case.
The only benefit I see was the move to NASDAQ which likely elevated the company’s stature to qualify for financing from more prominent and higher profile institutions the likes of EXIM and Stellantis though it is unclear who introduced NioCorp. Was it GX? JS certainly had a lot contacts in DC and who knows, maybe the Belgium group introduced Stellantis? Maybe IBC business MS had in the mid west stumbled on Stellantis or the BOD Peter Oliver from Australia. Perhaps our friends in Belgium can get clarity. Doesn’t matter who made introductions and won’t change anything but only curious. If GX made 1 or more introductions then that would be nice to know. Other than that it looks like the merger and move to NASDAQ salted the path moving to NASDAQ to gain stature and attract bigger financing financing fish though the stock took a beating without the GX shareholders investment. If EXIM and Stellantis come through it will compensate for the lost uptick on share price that NB would have gotten had GX moved over but not lost time. Se la vie.
The only benefit I see was a move to NASDAQ which likely elevated the company’s stature to qualify for alternative financing such as EXIM and Stellantis though it is unclear who introduced NioCorp. Was it GX? JS certainly had a lot contacts in DC and who knows, did the Belgium
group introduce Stellantis? Maybe IBC business MS had in the mid west stumbled on Stellantis or the BOD from Australia. Perhaps our friends in Belgium can get clarity. Doesn’t matter who made introductions and won’t change anything but only curious. If GX made 1 or more introductions then that would be nice to know. Other than that it looks like the merger salted the path moving to NASDAQ to gain stature and attract bigger financing fish.
Everybody has an opinion and I respect your stance that it’s mgts fault but I feel GX shareholders not converting to NB shares was not in NBs control. . The SVB bank collapse coinciding with the decision to move money from GX to NB was the 3rd largest bank failure in US history. I stand by my opinion that the imploding banking crisis spooked the entire stock market at the time and the reaction of GX shareholders was a flight to safety in redeeming their shares and holding on to cash rather than convert their shares under a looming and uncertain banking and stock market in March 23. That list that Skiluc or SkiFunds provided us of GX shareholders included a lot of banks and hedge funds. Personally, I was also worried about the stock market at the time of the announcement that SVB was going belly up and fear of a banking domino collapse. Understandable IMO that GX institutions decided to play it safe and not convert their shares to NB and take the cash instead. I said nothing about mgt. in my post. Only why I believe GX shareholders did not bring their money over. That wasn’t NioCorps decision. That was GX shareholders decision. I don’t think mgt had any control in the matter but ended up taking the hit for what happened. Just bad timing. I blame it on SVB and the many foreign SVB (guess what country?) banking customers who pulled all their money out not to mention SVB. Just bad timing. Can’t undo it. Hopefully, EXIM and Stellantis come through so we can right this ship.
https://en.m.wikipedia.org/wiki/Collapse_of_Silicon_Valley_Bank
NASDAQ wasn’t the issue. It was that the majority of GX shareholders did not bring the full $200,000,000 because they were spooked by a banking crisis that erupted at the same time as the vote to convert their GX shares to NB shares. It’s taken NioCorp a year or more to recover and develop new financing opportunities through EXIM Bank and Stellantis. Hoping for some good news soon. Everyone admittedly is disappointed by the delays but for the most part hanging in there. Hope your having a great day!
They are working on it Al. Have a great day!
Share price recovering today. Bought a few shares. Lets hope NioCorp doesn't drag this financing effort out and yes, these next few months are critical. Just like the minerals. hehe. Time to act NioCorp. You can do this!
That same thought crossed my mind Putz. That govt policy tied to EXIM may have some requirement of recycling as a condition to getting the loan. So be it, as long as they get the loan.
They do say though the recycling research is concurrent with finishing the FS, but, I agree, as my old co worker used to say. "Do the most important thing first."
"This investigation is expected to be conducted separately from the Company's ongoing work to update its Elk Creek Project Feasibility Study."
If they can finally get the financing we have waited so many years for, the share price improves and NioCorp can make people rich, maybe not as rich as we originally thought, it's amazing how quick people can forget the past. They have a a big mountain to climb but they can do this.
Great idea. Glad to hear you’re taking those steps. After todays new purchases, I am evaluating if I want to acquire more myself. Will see.
Glad to know our CEO has not changed his name to TCEO. Haha. Yes, I agree, incorporating IBC in to the NioCorp fold will only make NioCorp more profitable and provide finished products from mine to auto, aviation, ship and space manufacturers. Curious what’s in store for NioCorp and IBC in the field of solar energy and technology. Who knows how far they can take the enterprise.
Putzmueler, I would have gladly done some research on the merger and posted but I reached my maximum # of posts for Wednesday. Just got access again. Thanks for posting about the subject!
Happy to give you a big hug back at ground breaking OmahaInvestor. Your posts are always a breath of fresh air and we need your unique and important opinions as part of the mix IMO.
T&T, I understand your concerns. Jamie Dimon recently brought that concern up shedding light on the subject. His conclusion, keeping companies public keeps them transparent. The silver lining in a govt loan is that hopefully, that’s one of the stipulations of the loan. I don’t know GX mgt but from interactions I’ve had with NioCorp mgt I can’t imagine they would vote that in. A good question for folks in Belgium to ask Mark Smith at the upcoming conference.
US, great name by the way. Sorry if you feel that way. I only want what’s best for everyone but understand you can’t make everyone happy nor should you try. Just keep it professional. Attacks will only cause the board to clam up. That’s not what we want because there’s too much valuable information that can be shared and learned.
Ok T&T. That’s your opinion. I can’t imagine any adult behaving in the ways I’ve seen on this message board but there’s room for growth so keep an open mind.
Ok, that’s your opinion. Thank you for sharing.
I believe what I said. If it makes you feel better to vent, then by all means go ahead, but, please don’t berate other posters let them also have their day without fear of reprisal. Alls good Matt. We may have been a dysfunctional message board but we don’t have to continue in that vein. At one time in the not so distant past, the NioCorp message board was the envy of other IHUB message boards. I think we can be that again and even better. Looks like things are also getting for NioCorp with EXIM and Stellantis so time for a change of tune.
My posts are not about me. I am just one of many catalysts on this message board to start a healthy debate. A healthy debate has been missing from this forum for a very very long time. Somebody has to get control of this board. Its out of control. If you prefer moderators instead, they then need to speak up and pull people back in when they get thrown over the guard rails and kick out bad actors or give them a warning on how to behave civilly in an online forum so ideas can be shared and respected by everyone. Don't expect IHUB to keep this board civil. They are just the cavalry that get pulled in when the board reaches a crisis. I think this board has definitely reached a crisis. Time for a re start.
I'd like to see a debate more akin to the debates of the Constitutional Convention,
Bring back the brilliant minds and alternative opinions. As long as the debate is civil, everyone should have a voice. That means any investor old or new.
https://americanfounding.org/entries/introduction-to-the-constitutional-convention/
This is where you will find the comprehensive list of all the achievements that Mark Smith and his Team have made that have benefitted both the company and its shareholders. Not all PR's spiked on news but many over the years. None of that will compare though to what's likely coming down the pike, share price wise, upon major financing news. I believe this list goes back 11 years starting in 2013, maybe 12 years back to 2012.
https://www.niocorp.com/news-releases/
I totally agree Radar. Optics are important. Not defending MS but I can see why he holds on to the IBC CEO position. It's additional revenue for sure but I am not unconvinced that IBC is not part of the NioCorp supply chain master plan which I have been saying for years. When they were at MolyCorp, the company acquired a parts company much like IBC so disbanding from IBC is probably not realistic. What he could do however is once financing is in place is hire someone to run IBC even if NioCorp acquires IBC. I do not see MS moving to Indiana, PA or wherever the other factory is. I think he likes Denver because its a big business hub and well absolutely beautiful, meaning the nearby Rocky Mountain range. That discussion may have already come up in negotiations with EXIM and I would guess definitely among mgt at NioCorp and the BOD. I like the idea of assigning an experienced veteran from Stellantis heading IBC but its not just scandium/aluminum ingots that IBC could be making for the Big 3 or just Stellantis but they also fabricate jet parts so not sure if a Stellantis only CEO or President would work unless they had a President for auto parts manufacturing and another President for jet parts manufacturing. That all is negotiable among the various parties.I think it is near impossible to run NioCorp and IBC once financing is in place unless he lets Scott Honan take on more responsibilities at NioCorp which would be pretty time intensive for Scott as he is already President of Elk Creek Resources (the mine) and it will be extensive managing getting the mine up and running. If NioCorp does merge with IBC and or NioCorp acquires IBC, perhaps MS can find another Scott Honan type to be President of IBC while MS just retains the overall CEO position over both affiliated companies (Elk Creek Resources and IBC) under the banner of NioCorp and then hire 2 Presidents for IBC running mineral and mine development vs parts;alloy raw material manufacturing). In fact, they are likely having those kind of discussions right now would be my guess. Waiting until financing to decide how to allocate his time between NB and IBC is not prudent. This operation and project which has gone through so many iterations over the years could end up being quite a powerhouse and a much larger and complex corporation than anyone could imagine. Potentially bigger than Mountain Pass. Time will tell and they will tell us when they are ready and not a moment before.
If what I wrote you already suggested please excuse the oversight and thank you for bringing this up. Its an important subject. I looked at your post and may not have absorbed everything and just locked on to the key takeaway which is how does a CEO manage 2 expanding companies once financing is in place.
Thanks for posting Lard. Plausible and likely leading reason.
I could be wrong but I think GMAN was highlighting the absurdity of those who relentlessly mock Mark Smith. Tongue in cheek was my take anyway.
Now for a little amusement break along this rocky road.................................
Chris Farley As Bennett Brauer - Saturday Night Live
Can't disagree with that being the main reason. Thanks Lard. Adttl reasons as mentioned earlier, curious if centralizing the trading exchange domestically in the US is helpful in EXIM negotiations. It will definitely help to reduce costs as one person posted.
Not useless noise. Pushing back on posters who squelch debate through personal attack is not useless. You think I am a day trader. How funny because I always thought you might be short selling. Go figure. Anyways, no offense but pushing back on folks who try to dominate and run people off the message board is not healthy. My push back allowed folks like Lard and OmahaInvestor to feel safe enough to post without getting trounced by bashers. This is the way this board should be run. Express opinion. If your not in agreement with that opinion then state your own opinion but do not attack the other person in he process. There are rules of engagement and etiquette. Its called IHUBS Terms of Service. If IHUB doesn't enforce the rules then people are going to stand up for themself and push back if someone egregiously abuses another poster. That's their right. So don't count on IHUB to enforce the rules unless you report a violation by clicking on the "More" tab at the top of the message. You may however have to make the request a few times until IHUB responds. It would be nice to get back to a lively debate on this message board like yesteryear about today, not spending 80-90% of the time talking about the past which nobody know how much they repeat themself will ever change the past. That's what IR is for not the message board. Its not like we haven't heard the same complaints over and over and over and over. GMAN in my opinion has mastered the art of posting combining Zen fused with logic fused with research, current and pertinent events and information all with a dose of good humor. This rocky road of waiting for financing can be tiring so we could all use a little humor once in a while.
Looks like you want to run an argument in to a rabbit hole. Not taking the bait. All I can say is talk to the company. Investors are not your issue. Your issue is with the company. If you are dissatisfied, that is what Investor Relations is for. Contact them. Can't help you there.