Is First Republic Next?

Is this thing all about regional banks becoming insolvent due to unrealized losses? And are the big-five too-big-to-fail-banks relatively secure? 

This comes on the heels of crypto exchanges and companies that previously went belly up. Three big boys are still strong: Binance, Coinbase and Galaxy Digital. That contrasts with the likes of FTX, Blockfi, Three Arrows, Voyageur Digital and Celsius that either went or are in the process of likely going under. Meanwhile, over at Gemini, changes are coming to its business relationships while DCG is cutting jobs. 

That brings us to Silvergate, a Silicon Valley Bank subsidiary. When it went down, it likely had a cascading effect on SVB. SVB is purportedly the second-biggest American bank bankruptcy in history. And to add insult to injury for depositors, Yellin said that a bailout is out of the question. The Biden Administration fears a cascading effect. No kidding. But what about the elephant in the room: a bail in by depositors, under Dodd-Frank? À suivre.

SVB had bank runs before going under and First Republic is subject to considerable ATM withdrawls since yesterday. Not good. Hopefully, FR won't be the next victim.

Then there's the canary in the coalmine but what exactly is it chirping: some stocks dropped on Friday: Charles Schwab, Wells Fargo and the aforementioned First Republic -- while hedge funds are now shorting, among other companies, KeyCorp, with its biggest quarterly loss in its history, Signature, Zions and Truist. That's the trouble with bank panics, perception, not reality, very quickly becomes nine-tenths of the law. 

So, the FOMC is bound to have a very interesting private and closed meeting tomorrow morning. Watch them sweat, as they should.

UPDATE: Two MSN.com and MarketWatch.com articles that are a must-read.

10 banks that may face trouble in the wake of the SVB Financial Group debacle (msn.com)

20 banks that are sitting on huge potential securities losses—as was SVB - MarketWatch

2ND UPDATE: Reports say that Signature Bank just went down and a bailout is coming, but it won't technically be a bailout. Right.

3RD UPDATE: Federal Reserve and JPMorgan come to First Republic's rescue to boost liquidity.

Meanwhile, rumours are swirling around PacWest Bancorp.

4TH UPDATE: First Republic shares are still sinking even though liquidity was further injected. Looks like a bank crisis of confidence. Definitely not good.