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At least five times, a biological catastrophe has engulfed the planet, killing off the vast majority of species from water and land over a relatively short geological interval. The most famous of these mass extinction events — when an asteroid slammed into Earth 66 million years ago, dooming the dinosaurs and many other species — is also the most recent. But scientists say it won’t be the last. Many researchers argue we’re in the middle of a sixth mass extinction, caused not by a city-size space rock but by the overgrowth and transformative behavior of a single species — Homo sapiens. Humans have destroyed habitats and unleashed a climate crisis. Calculations in a September study published in the journal PNAS have suggested that groups of related animal species are disappearing at a rate 35% times higher than the normally expected rate. And while every mass extinction has winners and losers, there is no reason to assume that human beings in this case would be among the survivors. Micha...

Mellan 2012 och 2021 har deras lån vuxit från drygt 1 300 till 2 300 miljarder kronor Riksbankens räntehöjningar för att bekämpa inflationen är sannolikt snart över för den här gången DI 11 maj 2023 https://www.di.se/ledare/batljans-kris-far-inte-bli-sveriges-kris/ Efter SBB:s sänkta kreditbetyg under måndagen, med ett dramatiskt kursras som följd, har stamaktierna i VD:n och storägaren Ilija Batljans bolag Ilija Batljan Invest AB nu ett värde på 0 kronor. Om Ilija Batljan Invest AB:s tillgångar såldes idag, enligt redovisade värden och aktuell börskurs, skulle bolaget realisera 2295 Mkr. Samtidigt finns 2550 Mkr kvar i skulder, inklusive en hybridobligation på 750 miljoner kronor som har företrädesrätt framför stamaktieägarna. Utöver detta har en problematisk likviditetssituation uppstått. Den planerade utdelningen från SBB som stoppades i måndags kväll, skapar ett inkomstbortfall för Ilija Batljan Invest AB på 114 miljoner kronor. Vilket i sin tur ställer ett frågetecken kring hur bo...

At the end of last year, this gap between the carrying value and fair value of its loans came to $1.78 billion. WSJ 4 May 2023 https://www.wsj.com/articles/pacwest-and-the-bank-confidence-genie-b3666c83 PacWest Bancorp  led a rebound across US regional banking stocks after a bruising week of losses, joining in a broader rally across US stocks futures ahead of jobs data due later in the day. PacWest (PACW) Leads Regional Bank Stock Rebound After Bruising Rout - Bloomberg Bank Stocks Bounce https://www.nytimes.com/2023/05/05/business/bank-stocks-rebound.html This is not like the GFC  in the sense that it doesn’t hinge on distrust in the valuations of assets on banks’ books. It isn’t that investors fear that many of their loans are toxic. Rather, the issue now concerns profits.  With interest rates where they are, the logic is that banks can only hold on to their deposits, a vital source of cheap funding, by offering rates to customers that obliterate their profits.  Th...

 “At this rate, no regional bank can survive bad news or bad data as a stock price plunge inevitably follows, insured and uninsured deposits are withdrawn and ‘pursuing strategic alternatives’ means an FDIC shutdown over the coming weekend,”  “And there is no incentive to bid until Sunday after the failure.” MarketWatch 4 May  2023 https://www.marketwatch.com/story/we-are-running-out-of-time-to-fix-this-problem-bill-ackmans-latest-warning-on-regional-banks-c8993161 It is unlikely anyone will buy PacWest because of the precedent that the FDIC has set. Why would a large bank buy a smaller bank before the FDIC seizes it? If they wait for the bank to collapse, the FDIC seizes it and then shares losses with the acquirer. On top of this, the large bank who acquires the collapsed small bank pays pennies on the Dollar for the assets. https://twitter.com/KobeissiLetter PacWest stock plummets more than 50% https://englundmacro.blogspot.com/2023/05/pacwest-stock-plummets-more-than-5...

  PacWest stock plummets more than 50% after report of potential sale; other bank stocks fall too Last Updated: May 3, 2023 at 8:10 p.m. ET PacWest stock plummets more than 50% after report of potential sale - MarketWatch SVB and First Republic are just the first of many U.S. banks that will fail — if you believe 800 years of history May 3, 2023  Mark Hulbert https://www.marketwatch.com/story/svb-and-first-republic-are-just-the-first-of-many-u-s-banks-that-will-fail-if-you-believe-800-years-of-history-a8902918

‘Shadow banks’ have grown rapidly and, like banks, are exposed to risk from higher interest rates SVB’s core problem was that it owned a lot of government debt funded by unstable deposits. As interest rates rose sharply last year, the mark-to-market value of that debt plummeted, and deposits became more expensive and scarcer. A lot of banks own similarly devalued bonds. But that is just the tip of a debt iceberg.  Since the end of 2009, total debt owed by governments, business and households has risen 90% to $68 trillion. Banks are the most visible debtholders, but, collectively, just as much debt is held by pension and mutual funds, private-credit funds, life insurers, business-development companies, hedge funds, and other nonbanks—or, as they are sometimes called, shadow banks. Shadow banks have grown considerably since the global financial crisis. The fastest-growing segment is private credit—loans to companies generally too small to issue bonds but who want to avoid more restri...

 So if you can sell the assets for about $210 billion, then the government and all of the depositors get paid back in full; if you can’t, they don’t.  (Either way, the shareholders are, uh, in trouble.) Again, the assets are worth something like $206 billion, based on First Republic’s filings in December; that would not quite be enough to pay everyone back.  But the consensus seems to be that if you actually had to go sell everything at once, things would be considerably worse, and there would be a hole of tens of billions of dollars. The most straightforward do-something option is that the FDIC could seize First Republic, sell its assets, and use the money to pay back depositors.  But there would be a hole of tens of billions of dollars.  And the FDIC would either have to fill that hole (declaring First Republic systemically important and using its deposit insurance fund to pay off the uninsured depositors), or not fill that hole (letting the uninsured deposito...

 april Vi har det värsta bakom oss, snart sjunker inflation och räntor och börsen vänder uppåt igen.  Det är det eviga budskapet från alla dem som har intresse av att få ut detta budskap. Tro dem inte  Vi har nedgången framför oss. När? Mycket snart. Börsen ser ut att tappa fart - förlorar momentum. Sedan faller börsen av sin egen tyngd. Före börsens öppning 19 april 2023 Stocks Fall as Recession Fears Grow Stocks and bond yields fell Thursday, pressured by weak corporate earnings reports and economic data that reinforced investors’ recession fears. WSJ 20 April 2023 https://www.wsj.com/articles/global-stocks-markets-dow-news-04-20-2023-65c76fdf Anders Borg har en blandad syn på marknaden och ekonomin. Han har vid flera tillfällen sagt att att ”vi har det värsta bakom oss” vad gäller inflationen, och att en räntetopp snart är här. Samtidigt beskriver han estimaten inför stundande rapportsäsong i USA som ”väldigt mörka”.  DI 21 april 2023 https://www.di.se/nyheter/and...

Silicon Valley Bank’s collapse has caused savers to seek out alternatives, but the shift poses risks to the financial system and the wider economy It's forcing a rethink about the traditional role lenders have had in the US financial system and the economy — and whether there are just too many of them. The turmoil has underscored that there are other places people and companies can park their spare cash and get a better interest rate. For more than a decade, banks had been able to pay rock-bottom rates to depositors. When the Fed slashed interest rates in the financial crisis, it opened a low-rates era that allowed banks to borrow cheaply and earn handsome profits from lending. Bloomberg 31 mars 2023 https://www.bloomberg.com/news/articles/2023-03-31/svb-crisis-has-investors-asking-where-to-keep-cash Over the past year those in commercial banks have sunk by half a trillion dollars, a fall of nearly 3%. This makes the financial system more fragile, since banks must shrink to repay t...

Data show worrisome trends in real estate, banks and private markets WSJ 26 March 2023 Where Financial Risk Lies, in 12 Charts - WSJ

Proffsen: Elva aktier att sälja nu  Händelseutvecklingen och stressen i banksystemet följer ”någon slags klassisk cykel” på hur det ser ut när bubblor spricker, menar investeraren och Börspodden-profilen Johan Isaksson. ”Jag har väldigt svårt att se att det någonstans på vägen inte kommer uppstå en riktigt akut och allvarlig kris. Min tro är att det vi sett hittills bara är en försmak på vad som komma skall.” Hans långsiktiga börssyn är klart negativ där han ser en börskrasch i korten under det kommande året.  DI 20 mars 2023 https://www.di.se/nyheter/proffsen-elva-aktier-att-salja-nu-innan-helvetet-brakar-loss/

  ”Jag känner stor tillförlit till mängden likviditet och den motståndskraft som vår banksektor har byggt upp. Och jag tror likaså att våra tillsynsmyndigheter, våra institutioner på nationell och europeisk nivå har spelat en mycket, mycket viktig roll för att stärka motståndskraften i vårt banksystem”, sa eurogruppens ordförande Pascal Donhoe. Malin Rising DI  24 mars 2023, 14:17 https://www.di.se/nyheter/olaf-scholz-manar-till-lugn-om-deutsche-bank/

  Bank of America identifies the next bubble and says investors should sell stocks rather than buy them after the last rate hike Published: March 24, 2023 at 7:47 a.m. ET They point out that assets under management for money funds has now exceeded $5.1 trillion, up over $300 billion over the past four weeks.  The last two times money-market fund assets surged — in 2008 and in 2020 — the Federal Reserve slashed interest rates.  Hartnett is fond of the saying, “markets stop panicking when central banks start panicking,” and he noted a surge in emergency Fed discount window borrowing has historically occurred around a big stock-market low. MarketWatch 24 March 2023 https://www.marketwatch.com/story/bank-of-america-identifies-the-next-bubble-and-says-investors-should-sell-stocks-rather-than-buy-them-after-the-last-rate-hike-98b803ab 1325 CET Where is the money going? The answer begins with money-market funds, low-risk investment vehicles that park money in short-term governme...

Oron för banksektorn tilltagit i spåren på att USA:s finansminister Janet Yellen på onsdagskvällen sagt att USA inte överväger några totala insättningsgarantier utan godkännande från kongressen. På torsdagskvällen sade dock Yellen att hon är redo att vidta ytterligare åtgärder vid behov för att stabilisera banksystemet. I fredagens börsöppning var UBS ned 6 procent, efter att Jefferies sänkt rekommendationen till behåll från köp och skruvat ner riktkursen, som en reaktion på det myndighetsrekommenderade förvärvet av den krisande rivalen Credit Suisse. Deutsche Bank var ned med 7,5 procent. Bloomberg noterar att bankens kreditswappar, ett finansiellt instrument som är en slags försäkring för obligationsinnehavare, rusade under torsdagen. Den lokala konkurrenten Commerzbank sjönk samtidigt 4,5 procent. Hela botten i det europeiska indexet utgjordes i princip av banker.  DI 24 mars 2023, 09:42 https://www.di.se/live/nya-nedgangar-bland-europeiska-storbankerna/ Den europeiska ”too big ...

 “This is a risk confronting all banks,”  Sheila Bair, who ran the Federal Deposit Insurance Corp. from 2006 to 2011: “I don’t see regional banks as having any particular problem,”  “All examiners need to be on alert for how interest-rate risk is being managed. If there is a run, they will need to sell these securities. Those are the kinds of things all-size banks, and all examiners should be worried about.” The FDIC estimated that U.S. banks had some $620 billion of unrealized losses from securities on their books as of the end of 2022, including longer-duration Treasurys and mortgage securities that have become worth less than their face value. MarketWatch 23 March 2023 https://www.marketwatch.com/story/regional-banks-get-the-attention-but-worries-are-more-widespread-says-ex-fdic-chief-bair-a7e7eb56 Higher rates mean falls in the price of assets with a long duration.   Plenty of people, including, we now know, some of the stricken banks, effectively bet that rates ...

Higher rates mean falls in the price of assets with a long duration.  Plenty of people, including, we now know, some of the stricken banks, effectively bet that rates would stay low forever by piling up on long-duration assets such as 10-year Treasuries.  The longer this goes on, the more banks’ solvency, and not just their liquidity, may be called into question.  The poster child for long-duration assets is the Austrian government’s “century bond John Authers Bloomberg 23 mars 2023 https://www.bloomberg.com/opinion/articles/2023-03-23/rocky-horror-fed-show-stuck-in-a-time-warp-with-janet-and-jerome All the clever clogs at the Californian bank seem to have focused their energy on the sexy business of lending to venture capitalists, rather than the boring trade of deciding where you can safely park your depositors’ cash. Buying long-term fixed-rate government bonds when you have short-term floating-rate liabilities is a very basic mismatch — so basic that everyone in finan...

Svenska banker står stadigt. Men Riksbanken är redo att agera vid behov. DI 21 mars 2021 Anna Breman: Finansiella stabiliteten är inte hotad (di.se) ”Svenska bankerna bland de starkare i Europa” Riksgäldsdirektör Karolina Ekholm SvD 21 mars 2023 https://www.svd.se/a/Moa3oK/fi-vi-har-troligen-inte-sett-det-sista-av-detta   "Riksbankens nya stjärna" - Karolina Ekholm - En lydig kvinna Englund blogg 14 februari 2009 Englund: "Riksbankens nya stjärna" - Karolina Ekholm - En lydig kvinna (englundmacro.blogspot.com)

 Credit Suisse and SVB might be just the first of many shocks.  The immediate cause is the rapid increase in official interest rates in the U.S. and other major global economies.  The true cause is the unwinding of an economic and financial structure built upon an artificially low cost of money, which gave rise to the “everything bubble” and its leveraged speculation. There are several other areas of concern. First, over recent years, investment has flowed into venture capital and early/ late stage start-ups. The driver was that abundant capital was itself a strategy. Many unprofitable start-ups require near-continuous investment.  The problem is that new inflows into private equity have declined by around two-thirds from the 2021 level of around $600 billion as a result of large losses.  While some of these companis have sufficient funds to continue operations, many will be forced to close.  Second, since the global financial crisis in 2008, regulatory res...

 This week’s desperation move to engineer the acquisition of Credit Suisse Group AG by UBS Group AG (itself formed by the mega-merger of Union Bank of Switzerland and Swiss Bank Corp. 25 years ago) leaves the nation with just one universal bank.  At the time of writing, the deal appears to have been well received in Asian markets, but there is no guarantee that this will continue. The price per share marked a 99% decline from Credit Suisse’s peak in 2007. Shareholders don’t get to vote on this. Holders of “Additional-Tier 1 (AT-1)” bonds have been wiped out.  Unfortunately, there is now quite a range of examples of big banks that needed help. Bigger banks tend to have greater pricing power and can reduce their costs as a proportion of the total. They also tend to create really serious problems for everyone when something goes wrong. Probably the greatest argument ever made against worrying about “moral hazard”was made by the CNBC commentator Jim Cramer during the summer o...

Det rapporterade priset uppgår endast till cirka 10 procent av Credit Suisses marknadsvärde i början av året vilket reser frågetecken om hur försämrade deras tillgångar bedöms vara.  En annan faktor är beslutet att till fullo skriva av innehaven i ”Additional Tier 1 (AT1)”-obligationer, vilket skulle kunna påverkade denna tillgångsklass, särskilt om andra institut hamnar i problem.  DI 20 mars 2023, 08:52 https://www.di.se/live/capital-economics-systemkris-gar-att-undvika/ Risky Credit Suisse Bond Wipeout Upends $275 Billion Market Holders of AT1 bonds get nothing as shareholders get billions Investors in a key corner of bank-funding market left reeling Among the biggest losers in the shotgun sale of Credit Suisse Group AG are investors in the firm’s riskiest bonds, known as AT1s, worth $17 billion.  These money managers are set to be wiped out — potentially sending that $275 billion market for bank funding into a tailspin One UK bank CEO put it even more bluntly: The Swi...