Recent comments in /f/wallstreetbets

X_Fiery_Jack_X t1_jeb60uc wrote

Lol I fucking work in a bank. It being a bank has no bearing whatsoever it’s an asset the bank owns and can sell to whoever they want. If the bank fails it’s assets like properties, equipment and yes loans will be sold off to pay the bond holders and other first tier folks. Equity is wiped out but you still owe money and that obligation will be sold to someone else who will come after you bank or not.

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alphabetasoupa9 t1_jeb5ug2 wrote

Then please explain, because it seems like a valid question to me:

How will banks survive when they're losing depositors, can't offer high enough interest rates to attract and retain depositors, and are having to take loans out against their underwater assets at the Fed funds rate to pay out the depositors who are leaving?

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Htowntillidrownx t1_jeb581d wrote

Sold my entire portion yesterday….. got 20% since the low. Would be very careful here OP.

The treasuries that they have to sell to stabilize their balance sheet to either attract a buyer or to position themselves to remain independent have lost a significant amount bc as rates rise bond prices fall. And then secondly because almost 40% of assets on their balance sheets are Commercial Real Estate mortgages. Which again have been hurt by the rising rates which puts pressure on real estate prices but also due to the fact that a huge amount of those mortgages were signed before WFH became wide spread. I think demand for commercial office space has been crushed over the last 3 years but bc mortgages aren’t 30 day bonds we haven’t seen that demand reflected in prices yet

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Optimistbott t1_jeb36nm wrote

But some are paying higher than the rate they get on safe assets including reserves which pay 4.9% (IORB).

Even if it's like credit card debt or safe mortgages or car loans or student loans, the fed's hiking, default risk increases, and that's priced in, but regardless, banks seem to be getting into the weeds a bit.

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