One way to think about it is that the stock market is supposed to be efficient and the market for bank deposits is not. The point of the stock market is that a lot of well-informed hedge fund managers and hard-working analysts and Reddit-reading day traders are all competing with each other to find out information about each company and use that information to determine the fair value of its stock. The price of a stock changes each second to reflect the information and views collected by the market, and if the market is working well then that price reflects the collective best guess at the long-term value of the company. In practice the market sometimes tries too hard, and stock prices bounce around more than is justified by changes in fundamental information, but this is the goal.
The point of a checking account is that you put your money there and don’t think about it. You don’t compete with a bunch of hedge fund managers to understand your bank’s financial statements; you don’t stay up late reading Reddit for clues about its business prospects; you maybe aren’t even aware of the interest rate that it pays you. A checking account is not a high-risk, high-reward financial instrument that you have spent a long time doing due diligence on. It’s just money in the bank.
Economists say that bank deposits are supposed to be “information-insensitive,” and there is a vast corporate-finance and regulatory apparatus to make that mostly true. Most people’s bank accounts, for instance, are insured (up to $250,000) by the Federal Deposit Insurance Corp., so that even if their bank is just cobwebs and fraud they still get their money back, which means that they truly don’t need to do any diligence on their bank. But also banks have capital and liquidity requirements and prudential regulation and access to Federal Reserve lending facilities, so that even if things go pretty wrong at a bank it will still have enough money to pay out its depositors, because “the depositors don’t need to worry about their deposits” is kind of the whole point of bank deposits. Lots of people — bankers, regulators, economists — think about these things, so that depositors never have to.
Now, this is not always true. The classic story of a bank run is something like “deposits suddenly become information-sensitive, and you don't want that.” One way to tell the story of Silicon Valley Bank’s collapse is that its balance sheet got pretty rickety, shareholders saw that and said “well that’s fine, you can have a bank with a rickety balance sheet as long as it keeps its deposits,” and the stock muddled along for a while. But then depositors noticed that the balance sheet was rickety, they pulled their money, and the bank collapsed instantly. In fact, depositors might have noticed the problem because SVB publicly announced a share sale, which put more focus on its problems. It actually found enough buyers for the stock at a decent price, but then had to pull the deal because so many deposits had vanished: SVB’s shareholders were less information-sensitive, briefly, than its depositors.
But the story of … the second half of this week? … in the US regional bank mini-crisis seems to be that the stocks of some regional banks are very volatile, while their deposits are not. The shareholders are reading the news and alternately panicking and rejoicing; the depositors are not reading the news and just keep their money in their checking accounts. Kind of what’s supposed to happen! Here’s the Wall Street Journal yesterday:

PacWest Bancorp, which has been hit hard since the collapses of several banks, dropped by about 50%. The stock started falling in after-hours trading Wednesday evening, after a report that it was considering selling itself.
PacWest said in a statement after midnight Eastern Time Thursday that its core customer deposits were up since the end of the first quarter, and that it hadn’t experienced any unusual deposit flows since the collapse of First Republic.

And here’s Bloomberg News this morning:

PacWest Bancorp led a rebound across US regional banking stocks after a bruising week of losses, amid signals that some of the selling has been overdone.
PacWest’s shares soared as much as 88% in US trading Friday, their biggest intraday gain ever, after multiple trading pauses for volatility, while Western Alliance Bancorp rose as much as 43%.

And:

Take Western Alliance, the Phoenix, Arizona-based bank whose shares tanked as much as 27% on Tuesday, the day after JPMorgan Chase & Co.’s emergency rescue of First Republic Bank. While the deal failed to quell investor concerns the upheaval would spread, depositors were a little less fazed: Between Monday and Tuesday, they added $600 million of cash to the bank.
“The bank has not experienced unusual deposit flows following the sale of First Republic Bank and other recent industry news,” Western Alliance said in a statement, outlining that deposits had increased to $48.8 billion.
The same was true for rival lender PacWest Bancorp., which said it experienced no “out-of-the-ordinary” deposits flows following First Republic’s sale. Through Tuesday, deposits had increased since the end of March, it said.

The stock market has been pretty panicky about these banks, but their depositors, for the most part, have not been. How do you reconcile that tension? I think there are about four possibilities.
Possibility 1 is that the stock market is correctly reflecting a risk of imminent failure at these banks, and the information-insensitive depositors are ignoring it. This would be somewhat weird. The way for that failure to happen would be through deposit flight, and if the deposits are fine and stable then it is hard to see how the banks would fail now. But one can’t entirely rule it out; the theory here is something like “the stock market knows that depositors will flee before the depositors themselves do,” which kind of is how the stock market is supposed to work.
Possibility 2 is that the stock market is overreacting, because that’s also what the stock market does. After all, these stocks got crushed yesterday and then soared this morning, without much in the way of intervening news; both moves can’t really be right. Investors decided “this is a bad week for regional banks,” and so they sold regional bank stocks, and then they realized that these banks were not particularly close to failure, and then they bought the stocks back. Bloomberg News again:

In a Friday morning note upgrading Western Alliance, Comerica and Zions to overweight, JPMorgan analyst Steven Alexopoulos said that the sell-off had fed on itself. “With sentiment this negative, in our view it won’t take much to see a significant intermediate-term favorable re-rating of regional bank stocks,” he wrote.

And here’s Alexandra Scaggs at FT Alphaville:

If a new challenge to regional banks has surfaced just this week, it’s a tough one to find. …
“The thing I can’t wrap my brain around is that we have zero evidence — and if anything we have contrary evidence — that there is still concerted deposit flight in the system”, CreditSights’ Jesse Rosenthal told Alphaville this week.

Sometimes the stock market just gets too excited, and then walks it back.
Possibility 3 is that the stock market’s fall yesterday correctly reflected, not a risk of imminent failure, but long-term business problems at these banks. The problem for PacWest, on this view, is not that it might get shut down this weekend; the problem is that some of its deposits have left and been replaced with more expensive funding, and other deposits have stayed because it has raised the interest rates it offers, and PacWest going forward will have to pay a lot for deposits and won’t earn that much on its assets and will just not be that profitable. Which is totally fine, for depositors, and for regulators: The money will still be there. It’s just bad for shareholders, and the shareholders noticed and sold the stock. My Bloomberg Opinion colleague Paul Davies writes:

Since mid-March smaller US banks have had to compete ever harder for deposit funding because of the safe-haven attractions of the biggest lenders plus the higher returns already available from money market funds. The result is a sharp rise in funding costs for lenders like PacWest.
PacWest has become more reliant on higher cost consumer and brokered time deposits, which lifted its total deposit cost to 1.98% in the first quarter of 2023 from 1.37% in the previous three months. It has also borrowed more from costlier sources like the Federal Home Loan Banks, the Federal Reserve’s Bank Term Funding Program and capital markets. Taken together these changes helped to slash its net interest margin to 2.89% in the first quarter from a fairly consistent 3.4% last year. Analysts expect it to fall further to about 2.5% on average for this year, according to data complied by Bloomberg.
The squeeze on lending margins hurts revenue and profitability. The last two quarters have produced its lowest pre-tax profits since the third quarter of 2020. Its next two quarters are forecast to be even worse.

This is the most straightforward possibility: This week the stock market noticed, not that the regional banks are failing, but that they are unprofitable, so their stocks went down. (Also they are up today, which could just be “the stock market noticed that a little too hard yesterday,” or “the stock market got a little too optimistic today,” or some combination.)
(Continued)

QUACKman ... yawn.
I read earlier that both fed and state regulators are starting to look into possible market manipulation and/or short attacks on the regionals by various parties. Frankly, I wouldn't rule out economic warfare being another way of 'getting at' or trying to destablize the US over things like China policy or support for Ukraine ... gods knows our DC politicians can't even agree on naming Post Offices these days, so good luck coming together over an existential threat to the country or its financial system.

And here's an update to the previous report, edited for brevity.
Trading halted in shares of two more US lenders as fears of banking crisis mount

Trading in the shares of two more regional US lenders was temporarily suspended on Thursday amid a widening crisis for the country’s mid-sized banks.
Regulators stepped in to halt trading in the Los Angeles-based PacWest and Arizona’s Western Alliance following dramatic drops in their share prices. It came after another mid-sized bank, First Republic, was sold to JP Morgan earlier this week. Depositors had pulled $100bn from First Republic, fearing their money was no longer safe.
PacWest had sought to calm markets on Wednesday and said it was in talks with several potential investors after its shares fell by as much as 60%. But the sell-off continued on Thursday and affected other regional banks. Shares in PacWest fell 50% on Thursday after Bloomberg News reported that the lender was considering strategic options, including a sale or a fundraising round.
The bank sought to reassure investors by saying it had not experienced unusual deposit flows. “Recently, the company has been approached by several potential partners and investors – discussions are ongoing,” it added.
Western Alliance’s share price plummeted 45% after the Financial Times reported it was exploring strategic options, including a potential sale, which the bank strongly denied. It called the story “absolutely false” and said it had not experienced unusual deposit flows after the sale of First Republic. Its shares ended Thursday down 38%
First Republic was the third US bank failure to be swept up in the crisis, the worst since 2008, after the collapse of Silicon Valley Bank and Signature in March.
Bill Ackman, chief executive of the New York hedge fund Pershing Square, warned that the entire US regional banking system was at risk. In a tweet before PacWest’s statement, he wrote: “Confidence in a financial institution is built over decades and destroyed in days. As each domino falls, the next weakest bank begins to wobble.
“We are running out of time to fix this problem. How many more unnecessary bank failures do we need to watch before the FDIC [Federal Deposit Insurance corporation], and our government wake up? We need a systemwide deposit guarantee regime now.”

The regional banking system is at risk. SVB's depositors' bad weekend woke up uninsured depositors everywhere. The rapid rise in rates impaired assets and drained deposits. Zeroing out shareholders and bondholders massively increased the banks’ cost of capital. CRE losses loom.…
— Bill Ackman (@BillAckman) May 3, 2023

PacWest said total deposits were $28bn (£22.2bn) as of Tuesday. “Our cash and available liquidity remains solid and exceeded our uninsured deposits,” it said.
Other, less well-known regional banks have also been affected. Shares in the Dallas-headquartered Comerica were down 13%, and Zions Bancorporation fell by about 16% on Thursday. Unlike in the UK, smaller, regional banks play a big role in the economy, accounting for nearly half of US consumer and business lending.
The sell-off came despite reassurances from the chair of the Federal Reserve, Jerome Powell, that the US banking system remained “sound and resilient”, after the central bank voted to raise interest rates to a 16-year high. The benchmark interest rate is now at a range of 5-5.25%.
On Monday, JP Morgan, the biggest US bank, stepped in to acquire a majority of First Republic’s assets in a $10.6bn deal after regulators seized the lender, which became the largest US bank failure since 2008. It was the second largest collapse in US banking history, beaten only by the 2008 demise of Washington Mutual, which was also sold to JP Morgan.
“You can’t ask JP Morgan to come to the rescue again,” said Neil Wilson, the chief markets analyst at the trading platform markets.com. He pointed out that Powell had said: “It’s probably good policy that we don’t want the largest banks doing big acquisitions.”
Wilson added: “No, but that is what happened, because it was the ‘best’ outcome for the banking system … The quicker the Fed gets to a point of cutting rates, the better for these mid-size banks, but there is a lot more time and likely a lot more pain before we get there.”

According to Financial Times and Business Today, the three that had already fallen shared the same auditors, KPMG. Naturally, I checked on PacWest and they too seem to use KPMG which I assume means their bank side too. Financial Times (only let me through once without subscription) was trying to paint a picture where such failures fall on the head of auditors. On the other hand, KPMG is a major player and probably has a zillion clients that haven't produced good results prior to the rate increases that went sour after the increases. That's OK in FT's mind. They end the article saying auditors should be able to anticipate the future. I ended up glad that I wasn't an auditor.
BT
KPMG is common factor among 3 US bank failures in last 2 months; here's how
FT (subscription)
Three failed US banks had one thing in common: KPMG

• Trading halted in shares of two more US lenders as fears of banking crisis mount
• Regional lenders such as PacWest and Western Alliance are not seen as systemically important and more consolidation is ahead
Following is a current report from The Guardian:

Shares in two more US regional banks have been suspended. Regulators moved in to halt trading in Los Angeles-based PacWest and Arizona’s Western Alliance on Thursday after they became the latest victims of an escalating crisis that began with Silicon Valley Bank in March.
The message from central banks and bank supervisors is that this is not a rerun of the global financial crisis of 2008. That may be true. With the exception of Switzerland’s Credit Suisse, European banks have escaped the turmoil. It is specific US banks that are the problem.
There are a number of reasons for that: the business models of the banks concerned; failures of regulation; the large number of small and mid-sized banks in the US; and the rapid increase in interest rates from the country’s central bank, the Federal Reserve.
Luis de Guindos, vice-president of the European Central Bank (ECB), remarked on Thursday that “the European banking industry has been clearly outperforming the American one”. Although he will be praying his words do not come back to haunt him, he is broadly right. European banks, including those in the UK, do look more secure than those in the US – primarily because they tend to be bigger and more tightly regulated.
Despite being the 16th biggest bank in the US, Silicon Valley Bank was not considered systemically important and so was less stringently regulated than institutions viewed by federal regulators to be more pivotal. Many of its customers were not covered by deposit insurance and were heavily exposed to losses on US Treasury bonds as interest rates rose. The other banks that failed subsequently have tended to share many of the same characteristics: they were regionally based and are vulnerable to rising borrowing costs.
Unless the Fed rides to the rescue with cuts in interest rates, the options are: amalgamation, regulation or more banks going bust. The response of the US authorities suggests little appetite for a laissez-faire approach.
According to official data, the US has more than 4,000 banks – an average of 80 for each of the 50 states. The number has fallen by more than two-thirds since the peak of more than 14,000 in the early 1980s, but there is certainly room for greater consolidation. In an age of instant internet bank runs, customers will be attracted to the idea that big is beautiful.
The US authorities certainly do not seem averse to further amalgamation. When First Republic ran into trouble, it was seized by the Federal Deposit Insurance Corporation and its deposits and assets were sold to one of the giants of US banking – JP Morgan Chase. Inevitably, there will be more takeovers and fire sales of assets as alternatives to bank failures. It is reasonable to assume that in 10 years’ time the number of US banks will be considerably smaller than it is today.
What’s more, the banks that remain – including those that are not taken over – are likely to be more tightly regulated and more closely supervised. Even if the Fed, the ECB and the Bank of England are right and a repeat of the global financial crisis has been averted, lessons are already being learned.

@jafink63
I don't know if you have run into Doug Nordman in your pursuit. He knows a lot about retiring military questions. His website is Military Financial Independence

@jafink63... I would suggest that you-
• 1) Sit down and map out your total annual dependable income from all sources.
• 2) Do the same for all of your predictable and repeatable annual expenses. Hopefully the income will exceed the expenses. Will it be necessary to draw down your retirement accounts to meet those expenses? If so, an additional level of careful planning will be necessary. Consider that inflation is certain to increase your expenses, but not necessarily your income.
• 3) Consider what resources you may have for unanticipated expenses- primarily health care. Would an illness requiring expensive or extended health care be covered by insurance?
• 4) If it looks like your retirement income will cover your expenses, and you have decent health care coverage, then (and only then!) can you look forward to spending down your retirement savings.
• 4) With respect to "where do we put it", I'm sure that you will get many responses from the folks here at MFO. My personal input: I believe that we are heading into a period of financial system instability which will likely take a couple of years to sort itself out.
During that period you should want to keep your savings as safe as possible. I suggest consideration of laddering fairly short-term (3 months to 2 years) FDIC insured Certificates of Deposit, or similar maturity Treasury instruments. These types of instruments are easily available through brokerages such as Fidelity or Schwab. We personally use Schwab, but many MFO posters would also recommend Fidelity.
For more information about these types of investments you might take a look at the "New to Brokered CDs" thread, and also the "Best Returns on Currently Available CDs or Treasuries Maturing 2024 to 2025" thread.
Best of luck in retirement- I can testify that my wife and I are certainly enjoying ours.

This following Paragraph in this month's Commentary provided by @CharlesLynnBolin or @lynnbolin2021 seems worthy of further discussion here on the board.
Thanks for sharing your personal experiences and decision that you have made.
@CharlesLynnBolin wrote:

The Modern Wealth Survey for Charles Schwab by Logica Research shows that of the participants, Americans believe that it takes a net worth, including home equity, of $774,000 to be financially comfortable and $2.2M to be wealthy. FatFIRE Woman has an interesting Net Worth Calculator. The concept behind FatFIRE is “Financial Independence, Retiring Early,” but with enough to have a good quality of life. The calculator shows that the median net worth of households in the 65-year age group is $189,100, including home equity, while ten percent of households at age 65 have a net worth of $2.3 million or higher. Pensions are often not included in net worth calculations and greatly distort comparisons.

We spend our working life depending on work income to provide the funding source for our "cost to live" a quality life. If we are lucky (and maybe a bit frugal) we also squirrel away some of our work income for retirement. The above paragraph captures where most of us (65 and older) are at. If we are at the median or below, we are probably still working (if that is even possible). Using a SWR (Safe Withdrawal Rate) of 4 % this "median net worth of $189K" would barely provide $600 per month ($189K*.04/12month) of "safe withdrawals" from somewhat "uncertain and illiquid sources" (our investments & home equity values).
@CharlesLynnBolin last line:

Pensions are often not included in net worth calculations and greatly distort comparisons.

Whether one will receive a pension, an annuity, a Social Security benefit or some other form of monthly/yearly income stream these "payments" are often difficult to quantify in terms of their worth in one overall portfolio or as part of one's net worth. After 40 years (25 - 65) of accumulating a retirement nest egg and living in a home, I personally struggle to think of these two assets as the first place to turn for income in retirement. In fact, I have often thought of my investments and my home's equity as the last place to seek income (withdrawals).
As important as our portfolio and home value is, it might be better for us to find alternative and additional income solutions to help meet income needs in retirement.
Social Security:
Most of us will receive a Social Security Benefit. Spend some time crunching numbers regarding SS strategies.
Annuities / QLAC:
Increases in Interest rates may now be making annuities more attractive. Annuities are a topic on to themselves. For example, a QLAC is an annuity that you set up early in retirement, then dispersed later in retirement at a higher payout.
Our Home/Vacation Property:
Aside from home equity, a home could be rented for inflation adjusted income in retirement. Rent part of your home and have this rental income help with expenses or provide funds for you to travel in retirement. Consider running a part time business out of your home.
Reverse Mortgage Line of Credit:
Consider setting up a reverse mortgage early in retirement. This allows the reverse mortgage's line of credit to grow over time. Then, later in life, you can access this reverse mortgage line of credit and make much larger payments to yourself. This strategy (setting up a reverse mortgage early in retirement (age 62) and letting the line of credit grow) reminds me of how a QLAC (purchased early in retirement then dispersed later in retirement at a higher payout) works. There is a cost to setting up the reverse mortgage similar to any mortgage.
how-does-the-line-of-credit-for-a-reverse-mortgage-work/

Pension:
Some pension plans have features that allow funds (retirement savings) to be added to one's pension so provide a higher pension payout. Spend some time understanding what is offered at retirement. What's a Pension Worth? It could be a lot:
what-is-a-pension-worth
Part Time / Volunteer Work:
Retirement might be the best time to work at a passion that either pays you an income or provide you a productive way to spend your time.
Some of these income payments have little or no death benefit (SS might provide a burial benefit), some have a diminishing cash value (upon death), and some die with the beneficiary, some have a date certain end date, but all provide a partial solution to a retiree's income needs and might help you sleep better at night.
Love to hear what others have planned and implemented for their retirement income.

(Part 2)
But this is not really right ...

First Republic’s loans had famously good credit quality; First Republic got itself in trouble by making low-interest mortgages to very rich people, who will probably pay back those loans. (But the loans have lost value due to the move in interest rates.) And JPMorgan’s investor presentation touts both the “high-quality portfolio” with a “strong credit profile” and also JPMorgan’s own “comprehensive due diligence to support transaction assumptions.” JPMorgan did not need a loss-sharing agreement with the FDIC because it was worried that First Republic’s loans were toxic.
JPMorgan needed a loss-sharing agreement to improve the capital accounting for the deal. I have, above, used simple math — assets minus liabilities, equity divided by assets — to describe bank capital, but actual bank capital requirements are based on risk-weighed assets. Capital is a cushion designed to protect a bank from losses, and a bank needs more capital against risky assets than it does against safe assets. A big pile of mortgages and commercial loans will get an okay risk weighting, but a big pile of mortgages and commercial loans insured by the FDIC will get a better risk weighting. If JPMorgan had just bought these loans outright, its capital ratios would have suffered. But, it says, the “FDIC loss share agreements reduce risk weighting on covered loans,” so its common equity tier 1 capital ratio will still be “consistent with 1Q24 target of 13.5%.”
On an analyst call this morning, JPMorgan Chief Financial Officer Jeremy Barnum discussed this point:
"What I would say broadly is that given the nature of the portfolio and question, I think First Republic is very well-known for very good credit discipline. As you point out, these are primarily rate marks. And therefore, the benefit of the loss share really is the sort of enhancement to the RWA [risk-weighted asset] risk-weighting, which in turn is what makes these otherwise generally not very-high returning assets, in other words, prime jumbo mortgages primarily, actually quite attractive from a returns perspective. So the CET1 [common equity tier 1 capital] numbers fully incorporate the expected risk-weighting of the RWA, and we'll leave it at that, I think."
A normal mortgage loan gets about a 50% risk weight, so at its 13.5% target capital ratio, JPMorgan would need to fund that mortgage with almost 7% equity capital. These mortgages get about a 25% risk weight, meaning that JPMorgan can get away with half as much capital, which makes its return on equity from these mortgages much higher.
This is, by the way, a classic sort of financial engineering, a capital relief trade. You have a situation where the bank has loans that it thinks are very safe, but the regulatory capital requirements treat them as kinda risky; the regulators and the bank disagree on their risk. So the bank finds some well-funded third party that agrees with it that the loans are very safe, and buys very cheap insurance from that third party: The bank thinks the loans are safe, the third party agrees they’re safe, so the insurance premium is low, and insuring the loans lowers their capital requirements. It’s just that, here, the regulator (the FDIC) is also selling JPMorgan the insurance (for free). Everyone agrees that these loans are safe, but the capital regulations treat them as risky. There is a trade to be done. With the regulator.
For that matter, why does JPMorgan need to borrow $50 billion from the FDIC to do this deal? Why can’t it pay $60.6 billion upfront? The answer is not that it couldn’t scrape together the $60.6 billion in cash today; the answer is that JPMorgan, as a big stable bank, needs to keep a lot of cash around in case it has a bank run, and spending so much cash on First Republic would not be a prudent use of liquidity. On the analyst call, Barnum described the FDIC loan in these terms: “The deal also includes a $50 billion 5-year fixed-rate funding facility from the FDIC, which helps manage the ALM [asset/liability management] profile of the transaction, as well as the liquidity consumption.” First Republic had some long-term loans that it funded with short-term deposits, and look what happened to it. JPMorgan is going to fund those long-term loans with long-term borrowing.
You can see the levers here, the financial engineering. The FDIC’s goal here is to minimize the loss to its insurance fund, to sell First Republic for roughly what it is worth. But its other goal is to make sure that the banking system is well capitalized, and selling First Republic for 100% of its asset value doesn’t help with that goal; it just moves the capital hole somewhere else. The solution is some combination of:
Sell First Republic to a very-well-capitalized bank, one that can absorb the capital hole. “Fortress principles position us to invest through cycles — organically and inorganically,” says JPMorgan’s presentation about the deal; it has spent years bragging about its “fortress balance sheet,” and that really does let it do deals like this. But this deal will bring down its capital ratios a bit; a well-capitalized bank that absorbs an insolvent one will become a bit less well capitalized.
Give that bank a discount: JPMorgan is paying a bit more than 100% of the current market value of First Republic’s bonds and loans, but a bit less than 100% of the total value of its assets. It will book a gain on the deal, which will help maintain its capital ratios.
Engineer the deal to optimize the regulatory treatment: If giving JPMorgan an FDIC guarantee on some assets will lower its risk-weighted assets, you do that. If giving JPMorgan a long-term FDIC loan will improve its liquidity ratios, you do that.
You can to some extent trade off the discount against the engineering: Surely JPMorgan could have absorbed First Republic with no loan from the FDIC (worse for its regulatory liquidity requirements) and no loss-sharing agreement (worse for its regulatory capital ratios), but it would have paid less, which means that the FDIC would have paid more. But the FDIC did the math and concluded that the loan and loss-sharing made for a better deal.
You could imagine going further. JPMorgan could have come to the FDIC and the Fed and said “look, we would like to pay full value for these assets, but we have these pesky capital requirements. But you set the capital requirements; you could, you know, waive them a bit. Let us ignore First Republic in calculating our capital ratios; then we won’t need as much capital to do the deal, and we can pay more.” Something a little like that happened in UBS Group AG’s deal to buy Credit Suisse Group AG in March: Swiss regulators, who insisted on the deal, agreed to “grant appropriate transitional periods” for UBS to meet its capital requirements after the deal.
But of course you want to minimize that sort of thing, because the goal here is not just to make sure that First Republic opens for business today or to minimize the dollar losses to the FDIC’s insurance fund. The goal here is to restore confidence in the banking system, to send the message that the crisis is over and everything is fixed. A rescue deal for First Republic that weakens the capital or liquidity of its buyer is not a good solution. You don’t want to do too much financial engineering; you don’t want to leave the buyer technically well capitalized but really in a more dangerous place. But a little engineering is fine.

Let’s start with some bank accounting ...

You’ve got a bank, its assets are $100 of loans, and its liabilities are $90 of deposits. Shareholders’ equity (assets minus liabilities) is $10, for a capital ratio (equity divided by assets) of 10%. Pretty normal stuff.
Then the assets go down: The loans were worth $100, but then interest rates went up and now they are only worth $85. This is less than $90, so the bank is insolvent, people panic, depositors get nervous and the bank fails. It is seized by the Federal Deposit Insurance Corp., which quickly looks for a healthy bank to buy the failed one. Ideally a buyer will take over the entire failed bank, buying $85 worth of loans and assuming $90 worth of deposits; borrowers and depositors will wake up to find that they are now customers of the buyer bank, but everything else is the same.
How much should the buyer pay for this? The simple math is $85 of assets minus $90 of assets equals negative $5: The buyer should pay negative $5, which means something like “the FDIC gives the buyer $5 of cash to take over the failed bank,” though it could be more complicated.
But that simple math is not quite right. If you pay negative $5 to take over a bank with $85 of assets and $90 of liabilities, you effectively get a bank with $90 of assets, $90 of liabilities and $0 of shareholders’ equity. That doesn’t work. The bank, in the first paragraph, in the good times, did not have assets that equaled its liabilities; it had assets that were $10 more than its liabilities. Banks are required — by regulation but also by common sense — to have capital, that is, shareholders’ equity, assets that exceed their liabilities. The buyer bank also has to have assets that exceed its liabilities, to have capital against the assets that it buys. If it is buying $85 of loans, it will want to fund them with no more than, say, $75 of liabilities. If it is assuming $90 of deposits, it will have to pay, like, negative $15 for them, which means something like “the FDIC gives the buyer $15 to take over the failed bank.”
This is a little weird. You could imagine a different scenario. The FDIC seizes the bank and sells its loans to someone — a hedge fund, or a bank I guess — for $85, which is what they are worth. Then the FDIC just hands cash out to all the depositors at the failed bank, a total of $90, which is the amount of deposits. At the end of the day there’s nothing left of the failed bank and the FDIC is out of pocket $5, which is less than $15.
The FDIC mostly doesn’t do this, though, for a couple of reasons. One is that usually banks, even failed banks, have some franchise value: They have relationships and bankers and advisers that allow them to earn money, and the buying bank should want to pay something for that. The value of a bank is not just its financial assets minus its liabilities; its actual business is worth something too. Selling it whole can bring in more money.
Another reason is that this approach is far more disruptive than keeping the bank open: Telling depositors “your bank has vanished but here’s an envelope with your cash” is worse, for general confidence in the banking system, than telling them “oh your bank got bought this weekend but everything is normal.”
Also there is a capital problem for the banking system as a whole: If the FDIC just hands out checks for $90 to all the depositors, they will deposit those checks in other banks, which will then have $90 more of liabilities and will need some more capital as well. Selling the whole failed bank to another bank for $75 will cost the FDIC $15, but it will recapitalize the banking system. The goal is to have banks with ample capital, whose assets are worth much more than their liabilities; the acute problem with a failed bank is that it has negative capital; the solution is for someone to put in more money so that the system as a whole is well capitalized again. Sometimes the FDIC puts in the money.
This morning the FDIC seized First Republic Bank and sold it to JPMorgan Chase & Co. My best guess at First Republic’s balance sheet as of, you know, yesterday would be something like this:
Assets: Bonds worth about $30 billion; loans with a face value of about $173 billion but a market value of about $150 billion; cash of about $15 billion; other stuff worth about $9 billion; for a total of about $227 billion at pre-deal accounting values but only $204 billion of actual value.
Liabilities: Deposits of about $92 billion, of which $5 billion came from JPMorgan and $25 billion came from a group of other big banks, who put their money into First Republic in March to shore up confidence; the other $62 billion came from normal depositors. About $28 billion of advances from the Federal Home Loan Bank system. About $93 billion of short-term borrowings from the Federal Reserve (discount window and Bank Term Funding Program). Those three liabilities — to depositors, to the FHLB, to the Fed — really need to be paid back, and they add to about $213 billion. First Republic had some other liabilities, including a bit less than $1 billion of subordinated bonds, but let’s ignore those.
Equity: The book value of First Republic’s equity yesterday was something like $11 billion, including about $4 billion of preferred stock. The actual value of its equity was negative, though; its total assets of $204 billion, at market value, were less than the $213 billion it owed to depositors, the Fed and the FHLB, never mind its other creditors.
Here is, roughly, how the sale worked:
Assets: JPMorgan bought all the loans and bonds, marking them at their market value, about $30 billion for the bonds and $150 billion for the loans. It also bought $5 billion of other assets. And it attributed $1 billion to intangible assets, i.e. First Republic’s relationships and business. That’s a total of about $186 billion of asset value. JPMorgan left behind some assets, though, mainly the $15 billion of cash and about $4 billion of other stuff.
Liabilities: JPMorgan assumed all of the deposits and FHLB advances, plus another $2 billion of other liabilities, for a total of about $122 billion. (Of that, $5 billion was JPMorgan’s own deposit, which it will cancel.) The subordinated bonds got vaporized: “JPMorgan Chase did not assume First Republic Bank’s corporate debt or preferred stock.” That effectively leaves the shell of First Republic — now effectively owned by the FDIC in receivership — on the hook to pay back the roughly $93 billion it borrowed from the Fed.
Payment: JPMorgan will pay the FDIC $10.6 billion in cash now, and another $50 billion in five years. It will pay (presumably low) interest on that $50 billion. So the FDIC will get about $60.6 billion to pay back the Fed, plus the roughly $15 billion of cash and roughly $4 billion of other assets still left over at First Republic, for a total of about $80 billion. First Republic owes the Fed about $93 billion, leaving the FDIC’s insurance fund with a loss of $10 billion or so. “The FDIC estimates that the cost to the Deposit Insurance Fund will be about $13 billion,” says the FDIC’s announcement, though “This is an estimate and the final cost will be determined when the FDIC terminates the receivership.”
Equity: JPMorgan is getting about $186 billion of assets for about $182.6 billion ($122 billion of assumed liabilities, plus $10.6 billion in cash, plus $50 billion borrowed from the FDIC), meaning that it will have about a $3.4 billion equity cushion against these assets.
JPMorgan was the highest bidder in the FDIC’s weekend auction for First Republic; Bloomberg reports that its bid “was more appealing for the agency than the competing bids, which proposed breaking up First Republic or would have required complex financial arrangements to fund its $100 billion of mortgages.” And this is a pretty high bid: JPMorgan is paying $182.6 billion, total, in cash and assumed liabilities, for a bank with about $180 billion of loans and bonds at their current fair value; it is paying a bit extra for the other assets and the intangible value of the First Republic franchise. Still, it is acquiring the total package of assets for less than they are worth. That discount is required so that JPMorgan can properly capitalize the assets, so that it can have enough capital against them. And that discount is paid for by (1) First Republic’s shareholders, preferred stockholders and bondholders, who are getting wiped out and (2) the FDIC, which is also taking a loss on the deal.
Another point of the deal is that the FDIC is entering into loss-sharing agreements with JPMorgan, in which the FDIC will agree to bear 80% of the credit losses on First Republic’s mortgages and commercial loans. You can sort of imagine a simple story here: First Republic is a failed bank, it made some bad choices, who knows if its loans are toxic, JPMorgan had only a weekend to review them, it is not comfortable taking the risk, so it demanded that the FDIC share in the risk.

The Guardian
This article pretty much sums up what I’ve been getting from several other financial sources today, including Bloomberg. But most are nearly impossible to link.
So … The FDIC is holding an auction, but few takers. A 4 PM Sunday deadline came and went. The axe welded by the FDIC is the implicit threat that should First Republic fall into receivership, the Fed would need to sharply increase the fees the big banks pay into its rapidly depleting insurance fund. A bit of a Catch-22 for the big banks. Plus, JPM would need a special exemption as it holds close to the 10% of deposits among all banks - a regulatory limiting factor.

Good interview:
1. He believes FED will pause after May3rd FOMC meeting and holds the rate above 5% for a bit longer than people think; perhaps into 2025.
2 FED is losing money by holding long dated treasury yielding 2% while many are paying 4% today. FED is not buying more and let the rest mature and rolling off their book.
3. Mentioned that the FED made the mistake (QE and zero interest rate policy) and now trying to contain inflation that they created when they pumped too much money into people during the pandemic. Vast consumption post-pandemic caused high inflation. (Think the exact root causes are more complex than just the consumer driven event)
4. Large banks are doing fine through this turmoil but he believes there will be more consolidation and regulations just as the time period of S&L crisis.
5. He believes US financial system is strong and recommends investing in S&P 1500 that covers large-, mid-, and small-caps stocks. (Noted that large cap tech stocks are reporting good earnings, and that may not be the case for the smaller caps. Also the earning expectation has been guided downward, not the other way around)
6. Also he like bonds in general, but he like stocks better for the long term

On the last cycle, the Treasury said that you wouldn't get the old rate if you purchased savings bonds on Oct 30th (Mon) or 31st. Now it is saying much the same thing:

When did I need to complete my I bond purchase to receive the initial rate of 6.89 percent?
If you were buying in TreasuryDirect, you needed to complete your purchase and receive a confirmation e-mail by Thursday, April 27, 2023, at 11:59 p.m. Eastern Time.

https://www.treasurydirect.gov/help-center/savings-bond-faqs/
How does a financial institution ask you to lend it money (make a deposit, buy a savings bond, etc.) without telling you (either in numbers or by formula) how much it will pay you for that loan? Maybe that's why the figure was released early. Though by that reasoning it should have been released yesterday morning.

The SEC writes in its Investor Bulletin "Bank Sweep Programs",

If you have more than $250,000 in cash in your broker-dealer’s bank sweep program, you may want to consider:

• Public Information about the health of the bank.
  You may want to take advantage of the financial and other information available to consumers on FDIC’s website at https://banks.data.fdic.gov/bankfind-suite/bankfind [corrected]. One relevant consideration when assessing the health of the bank may be the percentage of deposits derived from concentrated sources such as brokered deposits or one or more bank sweep arrangements.
• Your broker-dealer’s affiliation with the bank.
  Your broker-dealer could choose not to limit or end a relationship with an affiliated bank that experiences financial difficulties, even if doing so would be in the best interests of broker-dealer’s customers.

Brokers using affiliated banks include among others, Schwab (Charles Schwab Bank, Charles Schwab Premier Bank, Charles Schwab Trust Bank, TD Bank, TD Bank USA), E*Trade (self-directed accounts are limited to Morgan Stanley Bank and Morgan Stanley Private Bank; other accounts also use Citibank), and Merrill (Bank of America, Bank of America, Calif.; qualified Merrill retirement accounts may also use other banks)
Other brokerages do not have affilliated banks. Vanguard is only now beginning to roll out a couple of FDIC-insured products, Vanguard Cash Deposit (sweep account) and Vanguard Cash Plus Account. But those are pilot programs open by invitation only. Fidelity offers a bank sweep program with slightly different banks for its CMA accounts and for its IRA accounts for its IRA accounts.
Fidelity shows that it uses First Republic Bank, but that the bank is now unavailable in its program. According to Fidelity, that means only that it cannot add new money to First Republic (or presumably its successor bank?). This seems reasonable and responsible, as the moneys deposited there are below the FDIC limit and pulling money out would simply exacerbate the run on the bank. (First Republic is also on Merrill's list of banks for qualified retirement accounts.)
Notable also is that Huntington National Bank is on Fidelity's IRA list of banks but not on its CMA list of banks. Recent change? I don't know. Huntington National Bank is the principal subsidiary of Huntington Bancshares, listed a month ago as a vulnerable bank. More recently, the bank said that it was working to shore up its assets and provided figures to substantiate that.
So long as one's cash in a bank is below the FDIC limit, I don't think there's any reason to be concerned about losing money. The 2014 SEC warning about bank risks due to concentrated sources seems prescient.

This sort of heads-I-win-tails-you-lose capitalism where pe firms have structural advantages on the way up and are completely insulated from the legal and financial consequences on the way down is not what Adam Smith originally envisioned. The sad thing about it is with a short-term corporate raider mentality where pe firms seek to scrap companies and sell their parts, they destroy many viable businesses, costing thousands of jobs and, apparently, human lives. It all seems so unnecessary.

/2
I said above that the few hundred million dollars that Bed Bath raised by selling 622 million shares of stock since it started preparing for bankruptcy “was not enough” to solve its problems, but it’s actually a bit worse than that. Bed Bath’s bankruptcy filing tells a story in which the company got into a bad place due to a combination of pandemic/supply-chain issues and its own management mistakes; in particular, its former chief executive officer pushed private-label brands instead of the well-known brands that its customers wanted. Bed Bath realized its mistakes and began correcting them — that CEO “was excused on June 29, 2022” — but that takes money; “the Company needed real runway to turn around its inventory and liquidity position.”
But the story is not that it then went out and raised several hundred million dollars to build up its inventory and make its business more attractive. No, the story is that it went out and raised several hundred million dollars to hand directly to its creditors:
Unfortunately, under the terms of the Second Amended Credit Agreement, the Debtors were required to use the net proceeds from the initial closing of the [Hudson Bay] Offering, along with the FILO Upsize, to repay outstanding revolving loans under the Debtors’ Prepetition ABL Facility, including repayment of the nearly $200 million overadvance. At this point the Company’s sales had dropped 60% on a comparable store basis, resulting in substantial ongoing losses from operation; therefore, the remaining Offering proceeds went to cover operational losses rather than to restoring inventory levels. …
The net proceeds from the B. Riley ATM Program were used to prepay outstanding revolving loans under the Debtors’ Prepetition ABL Facility and cash collateralize outstanding letters of credit, resulting in new credit under the Debtors’ Prepetition ABL Facility. ...
The Debtors’ cash burn continued while sales further declined due to lack of incoming merchandise, thus, preventing the Debtors from implementing their anticipated long-term operational restructuring while satisfying their restrictive debt obligations.
That is, Bed Bath had an asset-based lending facility (its most senior debt) and a first-in-last-out term loan (effectively its second-most-senior debt); as of November 2022, it had borrowed $550 million on the ABL (plus $186.2 million of letters of credit) and $375 million on the FILO. As of Sunday there was $80.3 million outstanding on the ABL (plus $102.6 million of letters of credit) and $547.1 million outstanding on the FILO.[3] Since this all began, Bed Bath has raised a bit more than $400 million from shareholders and handed about $300 million of it directly to its lenders, while the business collapsed and it had no money to fix things. Now it will hand the rest of its money over to the lenders.
I don’t know what to say? All of this was quite well disclosed. Back when Bed Bath did the Hudson Bay deal in January, it said in the prospectus that it intended to use all the money it raised to repay debt, and that if it didn’t raise a billion dollars in that deal (it did not) then it “would not have the financial resources to satisfy its payment obligations,” it “will likely file for bankruptcy protection,” “its assets will likely be liquidated” and “our equity holders would likely not receive any recovery at all in a bankruptcy scenario.” All of the legal documents were pretty clear that Bed Bath was raising money by selling stock to retail investors, that it was handing that money directly to its creditors, that the money probably wouldn’t be enough, that Bed Bath was probably going bankrupt, and that when it did the stock that it had just sold to those retail investors would be worthless. And things have worked out exactly as promised. No one can be surprised!
And yet it is one of the most astonishing corporate finance transactions I’ve ever seen?[4] The basic rules of bankruptcy are:
When a company is bankrupt, the shareholders get zero dollars back, and the creditors get whatever’s left.
The shareholders don’t get less than zero. They don’t put more money in.[5]
Here, I mean, Bed Bath was kind of like “hey everyone, we went bust, sorry, but our lenders are such nice people and they could really use a break, we’re gonna pass the hat and it would be great if you could throw in a few hundred million dollars to make them feel better.” And the retail shareholders did! With more or less complete disclosure, they bought 622 million shares of a stock that (1) was pretty clearly going to be worthless and (2) now is worthless,[6] so that Bed Bath could have more money to give to its lenders when it inevitably liquidated.
I have over the past few years been impressed by AMC Entertainment Holdings Inc.’s commitment to the meme-stock bit. In particular, AMC’s management was early and aggressive in realizing that being a meme stock could be a tool of corporate finance, that when people on Reddit are bidding up your stock for no clear reason, the correct reaction is not to chuckle in disbelief but to sell them stock. But AMC at least has a story; AMC is using its meme investors’ money to pay down debt, sure, but also to keep its theaters open and buy a gold mine.
No, this is the peak of meme stocks. Bed Bath & Beyond sold 50 million shares a week for three months with, as far as I can tell, no story, no plan, nothing but “a troubled financial situation and nostalgia value.”[7] Bed Bath saw that its retail shareholders wanted to throw their money away, and that its sophisticated lenders wanted to get their money back, and realized that there was a trade to be done that would make everyone, temporarily, happy. So it did the trade. It’s amazing. The lawsuits are gonna be great.
Dual-class stock
Most investors would prefer not to have dual-class stock. If a company has two classes of common stock, one of which has a lot of votes and is held by the founders and the other one of which has fewer votes and is sold to the public, then that’s bad, for you, as a big public shareholder. If you’re buying 5% of a company you’d like to get 5% of the votes, so that if you get dissatisfied with management you can push for change and they’ll have to listen to you.
But it can be a little hard to insist on this preference. Most of the time, if things work out well or even adequately, your voting rights just won’t matter very much. If some hot tech company is looking to go public with dual-class stock so that its visionary founder can keep control forever, and you like the visionary founder, you will want to own the stock even with no voting rights, and if you insist on voting rights, the visionary founder can say “well I don’t need your money anyway, lots of other people want to invest.” There is a collective action problem: Most investors would like voting rights, but it’s not at the top of their list, so anyone who refuses to buy dual-class stock will end up missing out on a lot of hot deals.
This means that, if you are a visionary founder looking to go public, there’s not much downside to having dual-class stock. “Investors won’t like it,” your bankers will tell you, and you will ask “well how much less will they pay for the stock if it’s dual-class,” and the bankers will be forced to reply “well they’ll pay the same price but they’ll grumble about it to the press.” Who cares? If there is no visible economic penalty for having dual-class stock, lots of founders will want it.
There is, however, at least one way for investors to act collectively to address this problem. Sort of. Companies, and founders, want to be in stock indexes, because there is a lot of money there: Trillions of dollars are managed in indexed strategies, and trillions more are in funds that are benchmarked to indexes and tend to invest in companies in indexes. So there is an economic penalty for companies that are not eligible for the indexes. And index eligibility rules are set by index providers like S&P Dow Jones Indices and FTSE Russell. Those companies can change their rules if they want. Those companies’ clients are investment managers who use their indexes. And the index eligibility rules are, to some extent, a matter of customer service and marketing: Index rules are not just about the abstract pursuit of truth (“What does it mean to be a large-cap company in Europe, the Middle East and Africa? How do we make sure all of those companies are in our index?”), but also about providing a useful product for your customers (“What list of large-cap EMEA companies do large-cap EMEA index fund managers feel like they should invest in?”).
And so if all the investment managers hate dual-class stock, they can quietly call up the index providers and say “hey it would be helpful for us if you ban dual-class stocks from the index, because then none of us could buy them and our collective action problem would be solved.”
/2

hope that anyone interested saw this earlier and similar stomach-turning MLevine writeup, "Money Stuff: Bed Bath Moves Into the Beyond" ...
somehow like an inverse of naked shorting
or something
\\\ Beyond bloodbath
On Jan. 20, Bed Bath & Beyond Inc. had about 117.3 million shares of common stock outstanding; the stock closed that day at $3.35 per share. On March 27, it had about 428.1 million shares outstanding, at $0.7881 each. On April 10, it had 558.7 million shares outstanding, at $0.2961 each. Yesterday, April 23, when it filed for bankruptcy, it had 739,056,836 shares outstanding.[1] The stock closed at $0.2935 on Friday.
So in the last two weeks, Bed Bath & Beyond has sold about 180 million shares to retail investors, more shares than it had outstanding in January. The stock averaged about $0.31 per share over those two weeks, meaning that the company raised maybe $55 million, in those two weeks, as it has been sliding into bankruptcy. Since January, Bed Bath & Beyond has sold about 622 million shares, or almost 50 million shares a week, raising a few hundred million dollars.
Here is Bed Bath’s first-day declaration in the bankruptcy case, which describes what the company has been up to over the last few months. The points that I would highlight are:
In December 2022, “Bed Bath & Beyond triggered multiple events of defaults under its financing facilities” and began its slow move into bankruptcy.
Also in December 2022, its financial advisers at Lazard “commenced a process to solicit interest in a going-concern sale transaction that could be effectuated in chapter 11,” that is, to find someone who was interested in buying the company out of bankruptcy and continuing to operate its business.
They failed: By mid-January, “Lazard had engaged with approximately 60 potential investors to solicit interest in serving as a plan sponsor, acquiring some or all of the Debtors’ assets or businesses, or providing postpetition financing,” but “to date, the Company has been yet to identify an executable transaction.”
So, as of mid-January, it seems that the company’s plan was to file for bankruptcy, close all its stores, liquidate its inventory and hand whatever cash was left to its creditors.
But Bed Bath did have one thing going for it. It was “part of the ‘meme-stock’ movement started and fueled on Reddit boards and social media websites,” because it “checked the two boxes needed to become a meme-stock: (i) a troubled financial situation and (ii) nostalgia value.”[2]
So someone had the bright idea of delaying things for a bit by selling tons and tons of stock to Bed Bath’s retail shareholders at whatever prices they’d pay. “Certain third-party investors expressed interest in providing the Debtors with substantial equity financing in light of the Company’s depressed share price and continued trading volatility. More specifically, the Debtors were approached by Hudson Bay Capital Management, LP” about a weird stock deal that we discussed in January; this ended up raising about $360 million. After the Hudson Bay deal ran its course — basically, after Hudson Bay and Bed Bath drove the stock price from above $3 to below $1 by pounding out about 311 million shares to retail investors — Bed Bath and its brokers at B. Riley Securities Inc. sold another 311 million shares to retail investors, but at ever-declining prices, so they raised a lot less money. Still something, though.
It was not enough, though, and ultimately this weekend Bed Bath & Beyond filed for exactly the sort of bankruptcy it was contemplating in January: Close all the stores, liquidate the inventory, hand whatever cash is left to the creditors. “The Debtors are committed to achieving the highest or otherwise best bid for some or all of the Debtors’ assets by marketing their assets pursuant to the Bidding Procedures, and, if necessary, conducting an auction for any of their assets,” the company says, but it has had like four months to find someone interested in buying the business, and if no one has shown up yet no one is going to. And: “The Debtors estimate that the aggregate net sales proceeds from all Sales will be approximately $718 million,” against about $1.8 billion of debt to pay off. Nonetheless:
While the commencement of a full chain wind-down is necessitated by economic realities, Bed Bath & Beyond has and will continue to market their businesses as a going-concern, including the buybuy Baby business. Bed Bath & Beyond has pulled off long shot transactions several times in the last six months, so nobody should think Bed Bath & Beyond will not be able to do so again. To the contrary, Bed Bath & Beyond and its professionals will make every effort to salvage all or a portion of operations for the benefit of all stakeholders.
/1

"Mr. Ballou is an attorney and the author of the forthcoming 'Plunder: Private Equity’s Plan to Pillage America,' from which this essay is adapted."
Not to be confused with: "Financial journalist Gretchen Morgenson explain[ing] how private equity firms buy out companies, then lay off employees and cut costs in order to expand profits. Her new book is These are the Plunderers."
Fresh Air interview with Gretchen Morgenson, April 26th, transcript and audio:
https://www.npr.org/2023/04/26/1172164997/how-private-equity-firms-are-widening-the-income-gap-in-the-u-s
Morgenson's book was released one week before Ballou's. Curious timing and similarity of titles. Both authors use the same ManorCare example in their excerpt/interview.
If the MOs of these firms sound familiar, there's a reason. It's a rebranding. Morgenson says: "Private equity firms are what used to be called leveraged buyout funds and firms". Yes, it's still going on, and has been going on for decades.
The revolving door that Ballou describes in the excerpt quoted swings both ways. It's not just PEFs hiring " former chiefs of staff, counsels and legislative directors".

Gross: [Trump] appointed Jay Powell to head the Federal Reserve. What's Jay Powell's connection to PEFs?
Morgenson: Jay Powell was an executive - a high-ranking executive at the Carlyle Group in Washington for several years. So he definitely has, you know, the mindset of private equity. Donald Trump also had, as a very high-level adviser to him, Steve Schwarzman, who is the co-founder of the Blackstone Group. You would often see Steve at Donald Trump's, you know, right or left hand when they were having meetings about business. So, you know, these firms do have a lot of clout and power in Washington.

Banks, including JPMorgan Chase & Co (JPM.NaE) and PNC Financial Services Group Inc (PNC.NaE), are vying to buy First Republic Bank (FRC.NaE) in a deal following a government seizure of the lender, Wall Street Journal reported on Friday.

Certainly didn’t help FRC’s stock price much late in the day. Closed down 43% to $3.51 in Friday’s regular trading. Than fell 34% more during after market trading to end the week at $2.32. It’s interesting to note the huge impact CNBC and other reporting had on the stock Friday. If someone wanted to play naughty and manipulate the price for personal gain with unsubstantiated reports, there was plenty of opportunitiy.
FRC 3.51
USD▼ -2.68 (-43.30%) today
2.32▼ 1.19 (33.90%)After Hours · April 28, 7:59 PM EDT · Market Closed
(Above excerpted from Google)

Banks, including JPMorgan Chase & Co (JPM.NaE) and PNC Financial Services Group Inc (PNC.NaE), are vying to buy First Republic Bank (FRC.NaE) in a deal following a government seizure of the lender, Wall Street Journal reported on Friday.