Looks like the red crayons are real busy today ..
can't be another US bank shaking in the breeze surely, after the weekend picnic got done and dusted :)
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Looks like the red crayons are real busy today ..
can't be another US bank shaking in the breeze surely, after the weekend picnic got done and dusted :)
Guess Orr be increasing rates for sure now next meeting after the unemployment figures and most likely the govt will blow out spending to buy votes in the budget therefore my guess a while back of 6% terminal rate might be close to the mark
Statistics New Zealand says the unemployment rate remained the same in the March quarter, while there were 22,000 jobs added, the labour force participation rate hit a new high and private sector ordinary hourly wage growth rose to 8.2%
https://www.interest.co.nz/business/...-quarter-while
What employment stats don't tell you is how many people left NZ for Australia or other parts of the world.
From what I have read their loan book was pretty safe as they specialized at lending to high wealth individuals at admittedly cheaper margins. I think Jamie Diamond is playing it down when he said it only adds minor value to their business. Secretly I think he was rubbing his talons together as a hawk does over roadkill & a free feed.
I was trying to figure out how much they paid for and perhaps how much it was valued at. There was definitely some concessions being made.
Apart from deposit holders not being guaranteed. I have read comments that they didn't manage their funding risk that well. So it all led to contagion (bank run). Scary to see that SP drop that fast.
They paid 10.6Bln which all went to the Government as partial payout on the 'bailout'.
Not bad for a bank that was valued at $120bln only months ago. My sense is that it wasn't about their risk management but purely a run on confidence. But could be wrong on that. Jamie Diamond doesn't buy lame ducks.
You are right this is a sweet deal. There is nothing wrong with the operation at all, if there was it won't be anymore. Basically the FDIC is plugging the funding gap. They get the loan book and they said it will generate a $500mill net profit p.a. I think this is an conservative fig. Plus you get the bank operation and if I recall some concessions for some future losses. Mr Diamond is no mug.
I do wonder does this mean will there be further consolidation in the US market.
Fed increases rates a quarter point and signals a potential end to hikes
https://www.cnbc.com/2023/05/03/fed-...may-2023-.html
market down on the news , guess nz50 may be down again today
HLG will drag the nz50 up :0