Shares in America's First Republic Bank's crashed when the New York stock market opened for trading this morning. The crash was triggered by a statement issued on Sunday night that sought to ease investor worries about the bank's liquidity situation in the wake of the failure of Silicon Valley Bank. Shares in the San Francisco based regional bank are down 60% on last week's close.
In the Sunday night statement the bank claimed that it had more than $70 billion in unused liquidity to fund operations from agreements that included the Federal Reserve and JPMorgan Chase & Co.
"The additional borrowing capacity from the Federal Reserve, continued access to funding through the Federal Home Loan Bank, and ability to access additional financing through JPMorgan Chase & Co.increases, diversifies, and further strengthens First Republic's existing liquidity profile," the bank said, adding that more liquidity is available through the Fed's new lending facility.Unfortunately this information, coming only days after Silicon Valley Bank had issued similar assurances shortly before being declared insolvent, failed to assure investors and depositors.
Bloomberg's Ven Ram opined, "The plunge in its shares is classic market psychology at work, with investors starting to question the credentials of any lender that may be remotely in the same category of Silicon Valley Bank," .
Zero Hedgepointed out over the weekend, "as a result of the SVB failure - one look at what is already taking place at some smaller, vulnerable banks such as this First Republic Branch in Brentwood should be sufficient to see what comes to morrow if the Fed makes the wrong decision today."
Despite the emergency lending program announced by the Fed and Treasury on Sunday to increase the availability of funds to meet bank withdrawals and prevent runs on other banks, fears have not been alleviated as other regional banks, which are sitting on some $620 billion in unrealized losses on all securities (both Available for Sale and Held to Maturity) at the end of last year, according to the Federal Deposit Insurance Corp," continue to experience significant pressure."
How was this allowed to happen? I worked in a British financial institution and do not claim great expertise in the American way of doing things but one flaw in U.S. corporate law allows companies to skew their balance sheet with outmoded accounting methods which maintain asset values at the original level rather than using the more modern, (and better suited to current financial volatility,) mark to market, in which market values current at the closing of an accounting period are used. Thus a company may claim $100 billion in assets against only $75 billion in liabilities, but when assets are calculated to market values only have assets with actual worth of $70 billion thus being insolvent.
Globalization and the Retrun To Serfdom
When the power elites promise something that will benefit people everywhere it can be taken what the world will get is the opposite. Thus when we were told globalisation would make everybody more prosperous, abolish poverty and narrow the gap between rich and poor, only a fool would have failed to regognize what was on offer comprised a return to medieval poverty and servitude for the masses while the rich became richer.
Another Reason To Get Out Of EU. UKIP MEP Hits Out At Fishing Policy That Penalises British Fishing Crews
As the General Election campaign starts to heat up, we try to shift focus away from the squabbling between Conservative and Labour about who can make the most promises they have no intention of keeping and to the real issues concerning jobs, social breakdown , mass immigration, and an often overlooked area in which our EU membership has perhaps done more damage than any other, the fishing industry.
De-Dollarization: Russia Ratifies $100 Billion BRICS Bank
A BRICS Bank - as an IMF alternative and to enable nations to become less dependent on the global reserve currency - was originally discussed at The BRICS Summit in 2012. Then at the 2014 BRICS Summit, the framework for The BRICS Bank was approved as "a system of measures that would help prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies.
Henry Kissinger On The New World Order
OK, let the Politically Correct screechers screech 'conspiracy Theory'. Kissinger has of course been a long time advocate of corporatist global totalitarian government by elitis oligarchs and has himself used the phrase New World Order to describe what he sees as the best hope for the future and what those of us outside his small elitist clique see as fascism
IMF Chief Legarde Arrested? It's DSKja vu All Over Again.
Like her predecessor in the job, Domique Strauss - Khan, IMF Chief Christine Legarde feaces prosecution for criminality and is likely to be forced out of the job. Yet the dodgy episodes in Legarde's past were well known before she was appointed head of the IMF. So who put the kinfe in and why?
Get Ready For The Collapse Of The Global Economy
In the years we have been publishing, Daily Stirrer financial correspondent Phil T Looker has consistently predicted the refusal of the market rigging banksters to acknowledge that the developed worlds debt driven economy was FUBAR might delay the economic catastrophe but that would only make the final collapse worse when it eventually happened.
The Banksters Bullion Heist: How The Gold Market Was Hi Jacked And The Banksters Robbed Us All
The rapid drop in gold prices recently has been said by some to be a sign a new economic crisis is imminent while others say it is a sign economic confidence is returning and the slump is over. It is neither, but rather a demostration of how banksters rig the markets in gold, commodities, currency ans shares, and rob us all.
Washington Signals Fears Over Dollar
Over the past month there have been some bizarre movements in financial marketsthat can only be explained as a conspiracy to protect the US dollar from the inevitable consequences Federal Reserve’s policy of Quantitative Easing (QE) which has been going on since the financial crisis began in 2008.
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