OK it is very early in the trading day but at as post this First Republic is down 74%, Zion Bank down 31%, and Schwab down 20% to name just a few. Preferred proxy PFF down 4.31% and the normally staid bank loan fund proxy BKLN down 1.55%. I am going hiking this morning so hope things improve by the time I get back. I am all in cash (SNAXX) but must admit a tad concerned about Schwab where I apparently have my monies being a TD Ameritrade account holder.
Edit: Should add junk bonds hanging in there. I would think these massive declines in anything bank related offer huge opportunities. But I will let others capitalize as catching falling knives is not my idea of enjoying life in old age.
Thanks for heads up. Have a great hike.
IIRC cash in a brokerage sweep account is protected up to 250K via FDIC or SIPC coverage, right?
That said I wouldn't fault people for moving large chunks of cash from a Schwab sweep or MMF into treasuries or treasury-ETFs at the moment.
If you buy something with funds from the sale of a Schwab MMF same day, they now have a big red banner reminding you that you do not have enough settled cash.
A real PIA not present at Fido with their sweep funds
It looks to me that the brokerage cash coverage would vary as it can be crowded out by securities.
Note that FDIC coverage for bank failure is distinct from SIPC coverage for brokerage failure.
SIPC FAQs https://www.sipc.org/for-investors/investor-faqs
General Info https://ybbpersonalfinance.proboards.com/thread/366/fdic-ncua-sipc-insurance
You might move monies into SUTXX/SNSXX Schwab US Treasury MMF...100% Tbill, less than 1 year maturities, weighted ave maturity 38 days...
I can't see this one crumbling but for certain I am not an expert and with the social media hype/fear/human emotion who really knows how this plays out.
My take is this is going to lead into even higher inflation and this will blow over. I'll take my chances with Schwab over most any other bank/institution...but does trouble me that their stonk is getting clobbered AND they are still offering 5.4% 18 month CD this morning....(Full Disclosure: I tanked up and bought up to the FDIC limit today)
Sitting at my home office...keyboard tapper at the corp job...wishing I was out hiking...not really sure why I'm not...
Best Regards, Good Health and Good Luck to ALL,
per bloomberg -schwab
Brokerage’s namesake founder says firm is ‘safe port’ in storm
Firm says more than 80% of deposits are insured by the FDIC
added more schwab dca slowly. hold long term. hope no bankrupcies
I watch a lot and can’t recall such unstable markets in a short time. Probably occurred a few times in ‘07-‘08. Leadership transitioning - but for how long? Non-dollar assets, stocks & especially metals, flying. At last look GNMA was +1% for the day. Good grief. And GDX +7.28% on the day at the moment.
I’m clueless …
Friday: Bill QUACKman makes headlines saying many banks are going to go under, gloom and doom, etc etc.
Monday: Bill QUACKman says there are 'incredible bargains' in the banking sector, but Bloomberg notes that "the Pershing Square CEO said Monday that he won’t invest long or short in banks so he could “continue to be part of this conversation”."
Give me a break.
Bank of America's stock skidded in premarket trading, with its losses outpacing big U.S. peers, amid concerns about whether unrealized losses on the bank's securities could be a potential vulnerability.
Bank of America Stock Falls Further Than Peers Premarket
Now that is definitely a large bank.
The failures at SVB, folks had their monies in the BANK and had monies over the FDIC limit.
The only reason you would want to move into SNSXX (US Treasury) is because you would feel more comfortable owning US Tbill as your underlying investment.
This is NOT advice, I don't know anything about anything, just stating my opinions and thoughts as I understand them. Others on the board are way more qualififed to answer questions.
Good Luck to ALL, take a deep breath,
Curiously, SNSXX (pure treasury) is yielding a few basis points more than SNOXX (treasuries and repurchase agreements backed by treasuries). We'll see how they compare tomorrow.
I'll stick with Vanguard. VUSXX 4.56% 7 day yield.
Regarding CDs - I just walked past a First Republic branch (no lines outside, seemed sedate inside). The window had a sign for a 60 day 4.25% CD. Any takers?
ALL down, except TIPs and PSTL, the postal REIT.
EL. BIG-O SUCK-O. Half an hour left before the bell. Just taking my first cup of coffee. Over the week-end, the East pulled ahead of us here again by an extra hour. (6, under Daylight Time.)
What to do.... I could use my MacAllan and enjoy "Irish Coffee" instead.
@msf- That is indeed very unusual for First Republic. Normally their CD offerings to bank customers is paltry... typically several points lower than available at Schwab, just across the street on West Portal Avenue. We use First Republic for checking, but I wouldn't be interested in much else there right now. In fact, I've scheduled transfers to Schwab and Chase to draw down the First Republic checking account, at least for the time being.
Speaking of CDs, a few minutes ago I bought a 50k/1 year Santander Bank CD at Schwab: 5.25%.
@msf - I noticed that as well. Could it be because the Weighted Average Maturity for SNSXX is 34.7 days vs 7.0 days for SNOXX and rates are coming down?
More interesting to me right now are the inflow rates of MMFs in the past 24 hours. You can find them navigating from the same Schwab page:
There's a huge outflow spike in SWVXX (prime MMF) - normally has inflows, had an outflow 6x the normal inflow rate.
And corresponding inflow spikes in government MMFs:
SNSXX - normally near zero +/-, had an inflow 20x normal magnitude
SNOXX - normally has small inflows, had an inflow 15x
These are to be expected knee jerk reactions. This pattern didn't hold with one MMF:
SNVXX - more erratic pattern with some previous spikes, notably large outflows on a couple of days in January, but also a huge inflow spike Jan 4 just slightly larger than yesterday's inflow
Those were the retail shares of these funds. Similar flows for the institutional share classes ($1M min), except for SGUXX (SNVXX). In the institutional share class, flows have been very sedate, including yesterday, except for one inflow spike (15x-30x normal net flow) on March 9th.