,the big short investor michael burywho earned millions Allocating dollars to its investors by accurately predicting the housing crisis, has raised its voice on the ongoing situation in the US banking industry.
“This crisis can be resolved very quickly. I don’t see a real threat here,” he said in his now-deleted tweet.
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Price Action: This statement of Barry has come at a time when banking and financial stocks are falling heavily despite all the assurances. President Joe Biden have to do it myself whatever is necessary to address the threat to the banking system, JP Morgan Chase & Co. jpm Shares closed down 1.8%. Bank of America Corp. BAC While 5.81% broke Morgan Stanley M / s The stock closed down 2.29%. Western Alliance Bancorporation wall Shares declined by 47.06% PacWest Bancorp pacw Dropped 21.05%.
The magnitude of the concerns is accurately reflected in the share price movement of First Republic Bank FRC, Shares of the lender closed 61.83% lower on Monday despite the bank issuing a statement a day earlier making the claim It has strengthened its liquidity position.
FRC said it had enhanced and diversified its financial position through additional borrowing capacity. federal Reservecontinued access to funding through federal home loan bankAnd the ability to access additional financing through JPMorgan Chase & Co. First Republic currently has more than $70 billion of untapped liquidity available for operations.
the beginning of the crisis coincided with the end of Silicon Valley Bank last week after signature bank was shut down by New York regulators, However, it seems that the pain is not over as reflected in the news from other quarters. Charles Schwab Corporation schw On Monday it reported a 28% decline in average margin balances and a 4% drop in total customer assets for February, amid mounting pressure on the company amid fears of a Silicon Valley bank collapse, Reuters reported. The company’s shares closed down 11.57% on Monday.
Dilemma: Whether the crisis will be contained or it will turn into something more sinister is yet to be seen. One thing is for sure – if consumer price inflation comes in higher than expected, the Federal Reserve will find itself in a big quandary. The question then would be whether to give priority to fighting inflation and raising rates or to put rate hikes on hold for the time being in the wake of the banking crisis.
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