The Institutional Risk Analyst

UBS ultimately seems intent upon running off the remaining US mortgage assets, including a few billion in Ginnie Mae MSR financings

The public behavior and decision-making processes of SoftBank suggest that the organization is in trouble.

GS has the weakest position in terms of funding of the top-ten banks and no real narrative for the business post-Marcus.

The Q2 2023 disclosure for PACW suggests an institution that is bleeding cash and operating in extremis...

The US banking industry has seen now two consecutive down quarters for net income caused by the Fed’s massive open market operations

When you are in a big crowd, nothing else matters.

Sadly for the bears in the audience, nothing would make the banks happier than if consumers would use more credit....

We continue to believe that combining Citi and GS may make sense in terms of consolidating two capital markets businesses

With industry losses on every loan closed well north of 200 bp, you might ask yourself why WAL would still be buying conventional loans.

TCBI needs to keep efficiency in the 50s if they want to survive the coming drought in mortgage lending.

So when we ask why large banks are so big, the answer is that the Federal Reserve Board allows large BHCs to use more leverage

We expect to see USB trading at a discount to JPM and Peer Group 1 until the bank improves its operating leverage to pre-COVID levels.

We all dodged a bullet in Q2 2023 because the repricing of assets and deposits slowed from the crazy levels seen at the end of March.

JPM has an impressive lead in earnings and growth over WFC and C, neither one of which is positioned to catch up with Jamie Dimon in 2023.

The sad fact is that even with another 2% capital, most US banks are arguably insolvent thanks to the Fed “going big.”

The “winners” in the mortgage sector will be those larger players with equally large servicing books that can access bank funding

JPM is really a large mutual fund with a bank attached, as shown in the table below.

If the FOMC raises the target rate for fed funds further, then banks like CMA are likely to come under renewed selling pressure.

If you agree with our view that the short-selling of the stock was mistaken, then the discount for SCHW is unwarranted.

If the FOMC raises fed funds further, bank failures and perhaps even a market access crisis for the Treasury are next.