Articles
Selected category: Banks
Fed Lowers Again; Fed Funds Target is Now 3.50% to 3.75%
The Federal Reserve under Fed Chairman Jerome Powell has lowered interest rates by 25 basis points for the third time since September. The Fed funds rate following the December meeting now stands at a target of 3.50% to... Read →
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Federal Reserve Sees An Increase in Uncertainty Around Unemployment and Inflation, Ends May 2025 Meeting Holding Fed Funds Rate at 4.25%/4.50%
In spite of significant pressure from the President to lower interest rates, the Federal Reserve has held interest rates at a 4.25% to 4.50% target at its May 2025 meeting.. The Fed is stuck because it sees inceased risks on both sides... Read →
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Some Common Misperceptions About FDIC Insurance
I speak with lots of people from many walks of life about the US banking system, about the safety of banks and deposit protection. Virtually everyone is generally familiar with FDIC insurance. Federal Deposit Insurance... Read →
Does An Inverted Yield Curve Signal Recession – This Time Could Be Different
When I was in business school, I was taught that an inverted yield curve is an extraordinary precursor of a recession. Indeed, the empirical evidence is there. Of the five recessions since 1980, all have been preceded, by 6 to 18 months, by... Read →
Image Copyright: Coolcaesar (from Wikimedia Commons)
Silicon Valley Bank Situation is Troubling; Here is What It Means for You and Me
The sudden bank run on Silicon Valley Bank (SVB) that materialized over the course of yesterday is quite troubling. The reality is that banks make bets on interest rates, and when interest rates move suddenly in one direction, as they have... Read →
Image Copyright: BestCashCow
Bill Dudley, Former Head of the NY Fed, Makes A Compelling Case for Not Raising FDIC Insurance, Proposes Alternative
In this Bloomberg piece, published today, Bill Dudley makes a compelling case against raising the FDIC insurance limit from the current $250,000 per account (learn more about FDIC coverage here). First, Dudley recognizes the importance... Read →
Image Copyright: CNN
Jamie Dimon Is Correct – It Is Time to Ban the Short-Selling Of Banks
Jamie Dimon, JP Morgan Chase’s CEO and Tufts alumnus, appearing this morning on Bloomberg from Paris said that the largest regional banks with which he speaks are all in good financial shape. They, however, are exposed to the sudden... Read →
Image Copyright: Senator Kennedy
Louisiana Senator John Neely Kennedy Is Spot-On About Silicon Valley Bank
I don’t agree with Senator Kennedy much. Almost everything that he has said publicly since Trump emerged has been absurdly and blindly naive. His positions on the major social issues of our time indicate he wants to wage war on the... Read →
Texas Ratio: Bank Ratio for Analyzing Safety and Soundness
The Texas Ratio helps assess the health of a bank. It compares the amount of loan risk a bank has by the amount of reserves and capital a bank has at its disposal to cover those losses.
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Inaccurate Hypotheses Being Circulated About Failures of Silicon Valley Bank and Signature Bank
There has been a lot of inaccurate information circulating in the media about what precipitated the failures at Silicon Valley Bank and Signature Bank, and what happens now. Let’s try and clear up at least six things that have been... Read →
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What is the CFPB and Why are the Republicans Out to Destroy It?
The Consumer Financial Protection Bureau (CFPB) is a regulatory agency of the United States government that is responsible for consumer protection in the financial sector. The CFPB was established under the Dodd-Frank Wall Street Reform and... Read →The massive wealth and profits generated by the big Wall Street banks is draining away. Nearly half of the profit they earned over the last couple of years on the strength of mortgages, CDOs, etc. are gone. Massive write downs continue and the financial services industry looks like it will go through a period of downsizing.
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Image Courtesy: Bloomberg
Morgan Stanley Shows Its True Colors During COVID-19 Pandemic
I had been a customer of Smith Barney for as long as I can remember, even after it merged into Morgan Stanley in 2011. Smith Barney was always an outstanding institution to do business with. They understood that the client always came... Read →
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TD Ameritrade Acquisition By Charles Schwab Causes Concern for Active Customers
Sophisticated stock traders have gravitated towards TD Ameritrade over the years. For over a decade, TD Ameritrade has had the best trading platform in the online trading business, and with the Sink or Swim acquisition they also have a... Read →
Image Courtesy: Washington Post
