The Institutional Risk Analyst

The net losses disclosed by BAC and the other large banks at the end of Q4 2023 are significantly understated...

We see higher credit costs, narrowing NIM and still rising funding costs squeezing the banking industry in Q1 2024...

Not all banks or companies are the same and not all follow the herd.

We think that the whole banking industry could be driven into multiple periods of loss as they divert income to loss provisions. 

AXP is a premium stock that is best acquired when people think, incorrectly, that the world is ending.

Look for falling rates sooner rather than later as the Fed and other agencies prepare to resolve more bank failures in 2024.

Citigroup picked up almost 10 points of book value since the end of Q3 2023.

If you conduct a fire sale analysis of BAC's balance sheet as of Q3 2023, the result more than wipes out the bank's tangible equity

Was the breakdown of the normally stable and, indeed, routine workings of the Clearinghouse the result of bad actors?

We look for modest rate cuts in 2025, followed by an equally modest boom in mortgage lending

If a bank has 6% debt to assets, what is the equity of the parent BHC worth?

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

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.

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

With inflation fears moderating, look for Buy Side managers to buy bank stocks – even if earnings remain constrained...

If we assume that asset returns will continue to rise, but that bank funding costs will rise 5x asset returns, then US banks have a problem

If you believe that the Fed is going to keep interest rates at or above current levels through to 2024, then we have a problem....

The funding crisis affecting US banks is not over and very definitely not limited to smaller banks.

Given that the US Treasury is paying 4% for 90-day T-bills, you can see how far banks have to go to become competitive on rates

The Fed by definition cannot make a profit and is always an expense to the Treasury, thus operating losses are a expense to the taxpayer