Investing in the stock market - Discussion

[Warhippy]

22 minutes ago, Elias Pettersson said:

Several more banks on the brink...

 

MCB - Metropolitan Bank - $21.24 today, 52 week high is $94.60

PACW - PacWest Bancorp - $6.55 today, 52 week high is $34.68

WAL - Western Alliance - $30.93 today, 52 week high is $86.87

 

PACW was $12 a week ago, so it's dropped 50% in the last week.  Contagion has set in...

Interesting to see what is coming then if this is the case.  Will people be protected?  Businesses?  if so how wealthy and what size will they need to be?  Larger companies and wealthier people will be immune of course but it will be interesting to see where they make the cut off

[Elias Pettersson]

3 hours ago, Warhippy said:

Interesting to see what is coming then if this is the case.  Will people be protected?  Businesses?  if so how wealthy and what size will they need to be?  Larger companies and wealthier people will be immune of course but it will be interesting to see where they make the cut off

IMO all of the small banks are gonna get wiped out. With FRB, they needed JP Morgan to buy them out. There was no way the FDIC was able to pay out the depositors. The FDIC has already run out of money. Only way for them to get more money is from the printing press. 
 

The problem though with the big banks buying out these smaller banks is that they have to buy up not only the assets but also the debts. And the assets are not prime assets. In the case of SVB, a large part of their portfolio was in long term treasury bonds, which are horrible investments in this rising rate environment. 
 

JP Morgan buying up the assets of FRB only moves the bad investments from one bank to another, it doesn’t really fix the problem. 
 

It will be interesting to see where all of these smaller banks end up in the next two months. 

[Elias Pettersson]

 

[TopChed]

 

Oh no my cheddar!

 

Big Cheese  SAPuto down 3% since april 28th

Edited May 3, 2023 by TopChed

[johngould21]

7 hours ago, Elias Pettersson said:

 

Another Trump MAGA policy that's completely failed. Banks loaning Musk et al mortgages near 1%. How the US of A manages to be the beacon of light is beyond me. Only for the well connected, and mega wealthy.

[Boudrias]

15 hours ago, Elias Pettersson said:

IMO all of the small banks are gonna get wiped out. With FRB, they needed JP Morgan to buy them out. There was no way the FDIC was able to pay out the depositors. The FDIC has already run out of money. Only way for them to get more money is from the printing press. 
 

The problem though with the big banks buying out these smaller banks is that they have to buy up not only the assets but also the debts. And the assets are not prime assets. In the case of SVB, a large part of their portfolio was in long term treasury bonds, which are horrible investments in this rising rate environment. 
 

JP Morgan buying up the assets of FRB only moves the bad investments from one bank to another, it doesn’t really fix the problem. 
 

It will be interesting to see where all of these smaller banks end up in the next two months. 

In essence Canada has 6 major banks. The USA has multi thousands. Regulators have resisted any M&A. TD has been trying to buy First Horizon in the US South East and been blocked. There is an argument that bigger reduces costs but that efficiency often costs jobs. The amount of investment in tech is huge. Not sure how regional banks can stay competitive. In Canada the credit Unions might be a comparable. They don't have to comply with reserve funds to the same level the main banks do. In our area 7 credit unions looked at merging and all dropped out except for 2 because they thought the cost outweighed the benefits. I don't see that being the case but what do I know. Maybe more about management trying to save their jobs. 

 

I have been buying GSY instead of the major banks.   

[TopChed]

7 minutes ago, Boudrias said:

In essence Canada has 6 major banks. The USA has multi thousands. Regulators have resisted any M&A. TD has been trying to buy First Horizon in the US South East and been blocked. There is an argument that bigger reduces costs but that efficiency often costs jobs. The amount of investment in tech is huge. Not sure how regional banks can stay competitive. In Canada the credit Unions might be a comparable. They don't have to comply with reserve funds to the same level the main banks do. In our area 7 credit unions looked at merging and all dropped out except for 2 because they thought the cost outweighed the benefits. I don't see that being the case but what do I know. Maybe more about management trying to save their jobs. 

 

I have been buying GSY instead of the major banks.   

Might want to Go Easy they've been going down hard since March. 

[Boudrias]

2 minutes ago, TopChed said:

Might want to Go Easy they've been going down hard since March. 

Ya, it hurts. Averaging down.  

[ronthecivil]

20 hours ago, Elias Pettersson said:

Several more banks on the brink...

 

MCB - Metropolitan Bank - $21.24 today, 52 week high is $94.60

PACW - PacWest Bancorp - $6.55 today, 52 week high is $34.68

WAL - Western Alliance - $30.93 today, 52 week high is $86.87

 

PACW was $12 a week ago, so it's dropped 50% in the last week.  Contagion has set in...

Oh they are ALL way down in value. Some more might go belly up? But all of them? I don't think so......

 

There is an ETF of the regional banks that I have thought of putting a small amount into because you know, where others are fearful, be greedy.

 

I am just not sure if they are scared enough YET.

[Elias Pettersson]

The smaller banks are getting absolutely hammered in after hours trading. Will we have another bank collapse on Friday?  Will JP Morgan have to buy up another bank?

 

[Elias Pettersson]

My bet is on PACW to collapse on Friday.  It’s currently trading at $3.05.  52 week high is $34.68, so it’s down 91%…

[Boudrias]

12 hours ago, Elias Pettersson said:

My bet is on PACW to collapse on Friday.  It’s currently trading at $3.05.  52 week high is $34.68, so it’s down 91%…

TD backed out of their purchase of First Horizon, a $13 Billion deal. TD said it was because of weakness in the regional bank market. I am more inclined to think they will pick it up for half the amount. 

 

Cannot remember the building name but a office building in SanFran valued at $300 million in 2019 went on the market at $60 million last week. Office space in SanFran is 30% empty. 

[Warhippy]

54 minutes ago, Boudrias said:

TD backed out of their purchase of First Horizon, a $13 Billion deal. TD said it was because of weakness in the regional bank market. I am more inclined to think they will pick it up for half the amount. 

 

Cannot remember the building name but a office building in SanFran valued at $300 million in 2019 went on the market at $60 million last week. Office space in SanFran is 30% empty. 

The issue with unfettered crony capitalism predicated on infinite growth is that there will always be a point in which the weak are devoured by the large in a system in which they barely stood a chance to begin with

[ronthecivil]

1 hour ago, Warhippy said:

The issue with unfettered crony capitalism predicated on infinite growth is that there will always be a point in which the weak are devoured by the large in a system in which they barely stood a chance to begin with

Infinite growth? So long as the population is going up there will be growth....

 

A FEATURE of capitalism is the weak portions die! It's usually the small guys, but sometimes it's the big guys! Sometimes the little guys getting devoured get a big payout too. You know, the get rich joke of "Oh no our business is failing" to "Oh wait! We just got bought by Google!!!!!!" to loud cheers.

 

The problem with other systems, is that if you have a bad system, it just sits there, sucking, to "protect jobs" and "maintain services" and it's efficiency and ability to perform can degrade over time and it's hard to fix it. It's a feature of government programs but it can happen in big corporations too! Like Bed Bath and Beyond going belly up.

 

So go out and profiteer on some cheep sheets and what not if you need them! 

Edited May 4, 2023 by ronthecivil
spelling

[ronthecivil]

2 hours ago, Boudrias said:

TD backed out of their purchase of First Horizon, a $13 Billion deal. TD said it was because of weakness in the regional bank market. I am more inclined to think they will pick it up for half the amount. 

 

Cannot remember the building name but a office building in SanFran valued at $300 million in 2019 went on the market at $60 million last week. Office space in SanFran is 30% empty. 

Just wait for empty bank branches to show up (you know like closed but has a vault and stuff) and buy up the properties and just open up TD branches in them. Grow organically instead. And slowly but surely accumulate stock in the big guys.

 

I am surprised the US hasn't gotten upset about the slow but certain acquisition of the American banking system by the Canadian one lol. 

[Elias Pettersson]

Down they go, where they stop nobody knows...

 

 

 

[Elias Pettersson]

Wow...

 

 

Edited May 4, 2023 by Elias Pettersson

[Boudrias]

3 hours ago, Warhippy said:

The issue with unfettered crony capitalism predicated on infinite growth is that there will always be a point in which the weak are devoured by the large in a system in which they barely stood a chance to begin with

Capitalism is not unfettered, not even close. Cannot think of an industry that goes about their business without government oversight. "Crony capitalism" sounds good but what do you mean? "Infinite growth"? How many industries have we all seen come and go? The 'dot com' rage was a classic. Growth or decline is not universal. "Weak are devoured", maybe they should be. Bad management exists in both big and small. SVB bank was in the $100's of Billions. Credit Suisse, $100's of Billions, both bad management. 

 

As a progressive you might not like it but how do you measure an efficient business if not by a market valuation? There will always be BS'ers in politics and business.  

[Warhippy]

2 hours ago, ronthecivil said:

Infinite growth? So long as the population is going up there will be growth....

 

A FEATURE of capitalism is the weak portions die! It's usually the small guys, but sometimes it's the big guys! Sometimes the little guys getting devoured get a big payout too. You know, the get rich joke of "Oh no our business is failing" to "Oh wait! We just got bought by Google!!!!!!" to loud cheers.

 

The problem with other systems, is that if you have a bad system, it just sits there, sucking, to "protect jobs" and "maintain services" and it's efficiency and ability to perform can degrade over time and it's hard to fix it. It's a feature of government programs but it can happen in big corporations too! Like Bed Bath and Beyond going belly up.

 

So go out and profiteer on some cheep sheets and what not if you need them! 

 

19 minutes ago, Boudrias said:

Capitalism is not unfettered, not even close. Cannot think of an industry that goes about their business without government oversight. "Crony capitalism" sounds good but what do you mean? "Infinite growth"? How many industries have we all seen come and go? The 'dot com' rage was a classic. Growth or decline is not universal. "Weak are devoured", maybe they should be. Bad management exists in both big and small. SVB bank was in the $100's of Billions. Credit Suisse, $100's of Billions, both bad management. 

 

As a progressive you might not like it but how do you measure an efficient business if not by a market valuation? There will always be BS'ers in politics and business.  

Crony Capitalism:  an economic system characterized by close, mutually advantageous relationships between business leaders and government officials.

 

Crony Capitalism:  an economic system in which individuals and businesses with political connections and influence are favored (as through tax breaks, grants, and other forms of government assistance) in ways seen as suppressing open competition in a free market

 

Tell me where I am wrong about this regarding America especially since 2008 and through this issue right now in the US banking system.  This is exactly what the fallacy of infinite growth suggests.  Eventually only the large survive because only the large can pay for the protection and favours afforded them.

Edited May 4, 2023 by Warhippy

[ronthecivil]

2 hours ago, Warhippy said:

 

Crony Capitalism:  an economic system characterized by close, mutually advantageous relationships between business leaders and government officials.

 

Crony Capitalism:  an economic system in which individuals and businesses with political connections and influence are favored (as through tax breaks, grants, and other forms of government assistance) in ways seen as suppressing open competition in a free market

 

Tell me where I am wrong about this regarding America especially since 2008 and through this issue right now in the US banking system.  This is exactly what the fallacy of infinite growth suggests.  Eventually only the large survive because only the large can pay for the protection and favours afforded them.

Well you can call it crony but it's sometimes necessary. Bank runs, banks going under, and what not (and the way the US interfered so far was to simply bail out the depositors, the shareholders are getting nothing, as it should be...). Better regulation yada yada I agree but we're at where were at and so you just can't let it fail. You can let Bed Bath and Beyond fail so it's not like every industry is loved.

 

Now the green industry on the other hand is getting pretty crony. 12k from the BC government to get a heat pump (if you have a house so progressive!). Big discounts on electric vehicles. That's just what we got in BC from first hand inquiry. (I want a heat pump one day and my gf is interested in an electric car and would probably already have one if you could have driven it off the lot). So you know people selling those things are probably not to worried about price reductions and are happily profiteering.

 

In the states the "inflation reduction act" should have been called the "green crony capitalisms act". 

 

And no, I don't like either. If you want green then start taxing carbon more. Or sugar. Or meat. Lots of sticks left to drive behavior. And with regards to banking, you bail our the depositors, and then you raise taxes on the banks to help step in with (in the states where they are going belly up) better FDIC insurance, and maybe greater reserve requirements. And you keep doing that until they stop going bankrupt. And yes, it's stupid politics that go back and forth (see Surrey police stupidly) that just allows people to point fingers at one another all the time.

 

And for green things, you don't need to subsidize the electric car. If energy is expensive enough, the natural progression to more fuel efficient, hybrid, and electric vehicles will happen on their own. As noted, I want a heat pump because it's better. For now though since I don't have a house and thus don't qualify for the subsidy, and since providers have tons of business installing them in big houses where the money is flowing from multiple sources, I guess I have to wait.

 

So ya, government can regulate business, and tax business, but it should otherwise stay the hell out as much as possible. I fully agree.