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Berkshire acquired 9.92 million shares in Capital One, a stake worth $954 million based on the closing price on March 31, regulatory filings showed on Monday. The bank's shares have shed around 15% since early March as the banking crisis has clobbered shares of U.S. regional lenders. Silicon Valley Bank, Signature Bank, and First Republic Bank are the three banks that have so far collapsed during the current crisis. The KBW Regional Banking Index (.KRX) fell 0.38%. Fed Vice Chair for Supervision Michael Barr said the central bank was "carefully considering" rule changes for larger regional banks, including requiring them to account for unrealized losses on their banks when considering capital levels.

☆ Capital One shares up after billionaire investor Buffett's near $1 bln bet on bank
▼ + stars: | 2023-05-16 | by ( ) www.reuters.com time to read: +1 min

May 16 (Reuters) - Shares of Capital One Financial Corp (COF.N) rose in premarket trading on Tuesday after billionaire investor Warren Buffett's holding company disclosed it had taken a stake in the credit cards-focused bank. The bank's stock, which was trading up 7% at $95.37, would open at its highest in more than two weeks, if gains hold. In its quarterly disclosure after the bell on Monday, Berkshire Hathaway (BRKa.N) said it had a 9.92 million share stake in the company. As of Monday, Capital One shares had lost around 8% so far this month, as financial stocks felt the effects of First Republic Bank's collapse. Besides credit cards, the McLean, Virginia-based Capital One also has a huge auto lending and commercial banking business.

☆ US economy 'hangs in the balance' as debt limit impasse drag on, Yellen says
▼ + stars: | 2023-05-16 | by ( Andrea Shalal | ) www.reuters.com time to read: +3 min

WASHINGTON, May 16 (Reuters) - The standoff over the federal debt limit is already having dire consequences for the U.S. economy, driving borrowing costs higher and adding to the country's debt burden, U.S. Treasury Secretary Janet Yellen is expected to say in prepared remarks on Tuesday. "The U.S. economy hangs in the balance. Congress should address the debt limit as soon as possible." Yellen said the 2011 crisis - when lawmakers raised the debt limit shortly before the government had to stop making payments - showed the serious repercussions of not acting sooner. Investors had already become more reluctant to hold government debt that matures in early June, and the deadlock was increasing the overall debt burden, she said.

NEW YORK, May 16 (Reuters) - JPMorgan Chase & Co (JPM.N) CEO Jamie Dimon said that it is "unlikely" that the bank will acquire any other struggling lender, weeks after it acquired the failed First Republic Bank. Dimon's latest statement comes just two weeks after JPMorgan bought a majority of First Republic Bank's assets in a rescue effort backed by the U.S. government. First Republic was the third major U.S. institution to fail in two months, and JPMorgan agreed to take $173 billion of the bank's loans, $30 billion of securities and $92 billion of deposits. In the shareholder meeting on Tuesday while all management proposals passed, all of the motions submitted by shareholders failed. A shareholder proposal on tweaking rules under which shareholders can call for a special shareholder meeting also got more than 30% of backing.

☆ Mohamed El-Erian says regional banks are in a 'hospital' phase of turmoil, but a Fed policy mistake will drive them 'back into the ICU'
▼ + stars: | 2023-05-16 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

The regional banking crisis has shifted out a severe stage, economist Mohamed El-Erian told Bloomberg on Tuesday. But another Fed policy mistake could drive small to mid-sized lenders "back into the ICU." If there's another [Fed] policy mistake, the patient goes back into the ICU," said the chief economic adviser at Allianz. Depositors have yanked hundreds of billions of dollars out of regional lenders collectively this year, including PacWest and First Republic Bank. What would another policy mistake look like to El-Erian?

The S&P Regional Banking Index fell approximately 25% during the quarter as a run on deposits sank Silicon Valley Bank and Signature Bank in March, both of which were at the time the largest banking failures since the Great Financial Crisis. The S&P Regional Banking index is now down 36% for the year to date. Famed "Big Short" investor Michael Burry's Scion Asset Management, meanwhile, added a number of new positions in regional banks, including stakes in First Republic, PacWest (PACW.O) and Western Alliance Bancorp (WAL.N). Shares of regional banks have remained volatile in recent weeks, with some investors wary of more tumult to come in the sector. London-based Marshall Wace sold 51,300 shares of First Republic in the first quarter, closing its position in the bank.

☆ Foreign buying of US Treasuries in March hits largest since June 2021 -data
▼ + stars: | 2023-05-15 | by ( Gertrude Chavez-Dreyfuss | ) www.reuters.com time to read: +3 min

There were lots of buying by China, lots of buying by Japan. Japan, however, had been selling Treasuries for most of 2022 to help boost a weak yen. China had been selling Treasuries as well, like Japan for most of last year. U.S. residents, meanwhile, increased their holdings of long-term foreign securities, with net purchases of $22.8 billion, compared with net selling of $8.3 billion in February. Overall, net foreign purchases of long-term securities are estimated to have been $133.3 billion in March, up sharply from February's inflows of $56.6 billion, data showed.

WASHINGTON, May 15 (Reuters) - Top U.S. banking regulators plan to tell lawmakers the government will be open to future bank mergers, but are committed to establishing tougher rules after recent turmoil. Barr maintained his commitment to overhauling bank rules to ensure firms do not escape stricter oversight because they are smaller or viewed as less risky. "The prudential regulation and supervision of these institutions merits additional attention, particularly with respect to capital, liquidity, and interest rate risk," he said in prepared testimony. While vowing to draft tougher rules, the agencies have also been criticized for not identifying and preventing weaknesses before the lenders failed. In prepared testimony, he said rapid interest rate increases and social media-fueled rumors drove the "unprecedented" bank run that sank his firm.

WASHINGTON, May 15 (Reuters) - A U.S. banking regulator plans to tell lawmakers his agency is "open-minded" when it comes to potential bank mergers and would act on any proposed deal in a timely fashion. Recent turmoil has added "urgency" to the OCC's work on updating bank merger guidelines, Hsu said. Tuesday's hearing will be the first for regulators since the FDIC agreed to sell failed First Republic Bank to JPMorgan Chase & Co (JPM.N) this month. Watchdogs have been under intense scrutiny after the collapses of SVB and Signature set off fears of contagion. In prepared testimony, he said rapid interest rate increases and social media-fueled rumors drove the "unprecedented" bank run that sank his firm.

☆ Bridgewater dumps bank stocks amid turmoil in first quarter -filings
▼ + stars: | 2023-05-15 | by ( Carolina Mandl | ) www.reuters.com time to read: +2 min

REUTERS/Brendan... Read moreSAO PAULO, May 15 (Reuters) - Bridgewater Associates, one of the world's largest hedge funds, sold off U.S. bank stocks in the first quarter as the industry was roiled by the collapse of three lenders, according to regulatory filings. Global hedge funds cut their exposure to U.S. banking stocks to a near 10-year low in March and fled lending-sensitive shares amid turmoil in the industry following the collapse of Silicon Valley Bank and Signature Bank. The firm also slashed its positions in smaller banks such as Bank of Hawaii Corp (BOH.N), Pacwest Bancorp (PACW.O), PNC Financial Services Group (PNC.N), Citizens Financial Group (CFG.N) and Capital One Financial Corp (COF.N). Bridgewater was also bearish on European banks in March, after the collapse of Silicon Valley Bank sparked contagion fears across global banks, a Reuters report showed. Following SVB, Signature Bank was also placed into receivership in March, while JPMorgan bought First Republic Bank's assets earlier this month.

☆ 'Big Short' investor Burry bet on regional banks in first quarter
▼ + stars: | 2023-05-15 | by ( David Randall | ) www.reuters.com time to read: +2 min

[1/2] A branch of First Republic Bank is seen. First Republic collapsed May 1, making it the largest bank failure since the 2008 financial crisis. The filings did not show whether Scion had sold its positions before then. The positions were revealed in quarterly securities fillings known as 13-fs. Burry was featured in the 2010 nonfiction book "The Big Short" by Michael Lewis which was made into a popular movie five years later.

NEW YORK, May 15 (Reuters) - Billionaire investor Jim Simons' Renaissance Technologies LLC was among the prominent funds that took positions in embattled regional bank First Republic Bank (FRCB.PK) during the first quarter ahead of the firm's May 1 collapse, according to securities filings released on Monday. Renaissance Technologies LLC, which has more than $100 billion in assets under management, bought approximately 7.1 million shares of First Republic during the first quarter and held them as of March 31, when they closed at $13.99 per share. Boston-based Adage Capital Partners, meanwhile, added a new position of approximately 185,000 shares of First Republic during the quarter, while New York-based Alpine Global Management LP added a new position of approximately 1.7 million shares in the company, filings showed. Renaissance Technologies, Adage Capital and Alpine Global did not respond to requests to comment for this story. Reporting by David Randall; Editing by Ira Iosebashvili and Marguerita ChoyOur Standards: The Thomson Reuters Trust Principles.

☆ In the Market: Why US regional banks are doomed to a doom loop
▼ + stars: | 2023-05-15 | by ( Paritosh Bansal | ) www.reuters.com time to read: +4 min

REUTERS/Brian SnyderMay 15 (Reuters) - Banking regulators have been pushed by market volatility in recent weeks into doing things that they haven't really wanted to do, like letting the largest U.S. bank get even bigger. Take the case of the Federal Deposit Insurance Corp (FDIC), one of the main banking regulators. These banks provide credit to vast sections of the U.S. economy, and deposit flight has forced them to pull back on lending. They have provided banks with lifelines that give them enough cash to meet deposit withdrawals, for example. Treasury Secretary Janet Yellen said on Saturday that nearly all banks had access to sufficient liquidity but pressure on earnings may lead to some midsize bank deals.

☆ ‘Big Short’ Michael Burry bought shares in a slew of regional banks last quarter amid banking crisis
▼ + stars: | 2023-05-15 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

Michael Burry, known for calling the subprime mortgage crisis, bought shares in a number of regional banks last quarter, betting the industry could weather the crisis, according to a new regulatory filing. The famed investor said in mid-March, after the collapse of Silicon Valley Bank , that he expected the banking crisis to be over soon without severe damage. However, on May 1, First Republic was seized by regulators to become the biggest bank collapse since the 2008 financial crisis. Burry bought $2 million worth of First Republic Bank shares last quarter, the filing, which reflects Scion's holdings as of March 31, showed. Burry was depicted in Michael Lewis' book "The Big Short" and the subsequent Oscar-winning movie of the same name.

☆ David Einhorn's Greenlight Capital bets on pair of regional banking stocks
▼ + stars: | 2023-05-15 | by ( Alex Harring | ) www.cnbc.com time to read: +2 min

David Einhorn joined other big investors in shares in several regional bank stocks last quarter in a bet that the financial institutions would survive the industry crisis that felled Silicon Valley and First Republic banks. That's the bank whose subsidiary, Flagstar, acquired Signature Bank assets after that bank was shuttered. Einhorn's additions come amid a broad selloff of regional bank stocks on concern more institutions could fail as depositors withdrew assets and the value of banks' bond holdings narrowed. "Big Short" investor Michael Burry also bought regional bank stocks last quarter. Outside of the bank stocks, Einhorn notably increased exposure to Concentrix , Gulfport Energy and Tenet Healthcare .

May 15 (Reuters) - Greg Becker, the former chief executive officer of Silicon Valley Bank, is set to appear before the U.S. Congress on Tuesday, two months after the collapse of his bank sparked panic among bank customers and investors, forcing the government to backstop deposits. California banking regulators moved quickly to shut down Silicon Valley Bank on March 10 after depositors withdrew $42 billion in 24 hours. Becker will testify before the Senate Banking Committee alongside Scott Shay and Eric Howell, the former chair and president, respectively, of Signature Bank. When his manager left to work for Silicon Valley Bank, Becker followed, he said on a 2021 Bloomberg podcast. Before becoming president and CEO of SVB Financial Group, Becker co-founded SVB Capital, the company's investment arm.

☆ Stop Equating the Latest Bank Failures to the 2008 Crisis
▼ + stars: | 2023-05-14 | by ( Josh Zumbrun | ) www.wsj.com time to read: 1 min

The FDIC seized First Republic Bank in early May and struck a deal to sell the bulk of its operations to JPMorgan Chase. WSJ’s Ben Eisen explains what led to the bank’s failure and what it means for customers, investors and the industry. Illustration: Preston JesseeThe failures this year of First Republic Bank , Silicon Valley Bank and Signature Bank have been labeled the second-, third- and fourth-largest bank failures in U.S. history. By one measure, the three banks held more assets than all 25 banks that failed in 2008 during the global financial crisis. Wait a second: this wave of failures is as bad as the 2008 crisis?

☆ The Fed likely won't cut rates this year. Why that's good news for markets
▼ + stars: | 2023-05-14 | by ( Krystal Hur | ) edition.cnn.com time to read: +5 min

Although a pause in interest rate hikes appears likely, cuts may be farther off than some believe. Still, investors have remained hyper-alert for signs that the central bank could let up its brisk clip of interest rate increases. The central bank also opened the door to a pause, accelerating bets that the Fed will hold rates steady at its next meeting in June and cut rates as soon as July. The Fed is unlikely to cut rates in JulyExperts say that the Fed won’t cut rates anytime soon for two key reasons: Inflation remains sticky, and the economy has stayed strong. that’s not to say that a Fed rate cut this year is completely out of the cards, says Nicole Webb, senior vice president at Wealth Enhancement Group.

☆ Stocks week ahead: SVB and Signature Bank execs are set to testify next week
▼ + stars: | 2023-05-14 | by ( Krystal Hur | ) edition.cnn.com time to read: +5 min

The US Senate Committee on Banking, Housing and Urban Affairs is holding three hearings this coming week centered around the collapses of Silicon Valley Bank and Signature Bank in March. ET : Greg Becker, former chief executive, Silicon Valley Bank; Scott Shay, former chairman and co-founder, Signature Bank and Eric Howell, former president, Signature Bank. ET : Mark Bialek, inspector general, Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau; Paul Kupiec, senior fellow, American Enterprise Institute and more. Since then, the Federal Reserve and Federal Deposit Insurance Corporation have released reports detailing management missteps at SVB and Signature Bank, as well as federal regulators’ own mistakes in properly addressing red flags preceding the banks’ demises. A separate report from the Federal Reserve Bank of New York on Friday shows that American households are becoming increasingly frugal.

☆ A 31-year market vet who called the current bear market warns an impending credit crunch and recession will sink stocks by 45% as valuations remain higher than dot-com bubble levels
▼ + stars: | 2023-05-13 | by ( William Edwards | ) www.businessinsider.com time to read: +7 min

Indicators like initial and continuing unemployment claims and loan demand show weakness. A recession paired with high valuations spells trouble for stocks, he said. For example, the number of initial unemployment claims is starting to jump at a recessionary pace, Wolfenbarger said. The four-week moving average of initial unemployment claims has risen 29% over the last eight months. Hussman FundsWhat others are sayingMany market onlookers have highlighted high stock market valuations in recent weeks.

☆ Blackstone, Apollo were among about 20 bidders for SVB's assets
▼ + stars: | 2023-05-11 | by ( ) www.reuters.com time to read: +1 min

May 10 (Reuters) - Blackstone Inc (BX.N) and Apollo Global Management (APO.N) were among about 20 bidders for some assets of collapsed Silicon Valley Bank, the Federal Deposit Insurance Corporation (FDIC) said on Wednesday. PNC Financial Services (PNC.N), Valley Bank, Citizens Bank and BankUnited (BKU.N) were also among the bidders, the FDIC said in a summary document, adding that one or more bidders submitted more than one bid. The bids, which closed on March 10, were followed by First Citizens BancShares (FCNCA.O) purchasing all the loans and deposits of SVB later that month. That was since eclipsed by First Republic Bank which was seized by regulators in early May and sold to JPMorgan Chase & Co (JPM.N). The deal announced in March said First Citizens would acquire SVB's assets of $110 billion, deposits of $56 billion and loans of $72 billion.

☆ Credit Suisse's chief US economist says home prices will likely fall another 5-10% — and that gridlock between buyers and sellers will prevent both appreciation and a larger crash
▼ + stars: | 2023-05-11 | by ( William Edwards | ) www.businessinsider.com time to read: +5 min

Credit Suisse's Chief US Economist Ray Farris says home prices will see a 'long recession.' Rather, the market is likely to go through a sort of holding period, where activity stays low and prices neither boom nor bust. You can spread the housing market over many more locales in the US and that's what's happening." And the way I think of that, as a base case, it means that even as mortgage rates come down, the housing market doesn't recover rapidly. Morgan Stanley's Ellen Zentner is one economist that — like Farris — doesn't expect a recession, and only sees prices falling another 4% this year.

☆ Private-credit firms see opportunity as banks tighten lending
▼ + stars: | 2023-05-10 | by ( Lisa Pauline Mattackal | ) www.reuters.com time to read: +2 min

May 10 (Reuters) - Private-credit firms are eyeing fresh opportunities from a potential borrowing squeeze in the United States as battered regional banks tighten lending after the turmoil in the sector, according to fund managers and investment strategists. Such lenders see commercial and residential real estate as particularly attractive, given the prominence of regional banks in these sectors. Regional U.S. banks accounted for about 70% of outstanding loans to the commercial real estate (CRE) sector alone, according to Capital Economics. "Signature was one of the biggest providers of real estate lending in the New York area, commercial real estate is very vulnerable ... as a lender you want to be on the other side of that," Handa said. Many private credit funds have plenty of excess funds, or "dry powder" to invest, said Matt Malone, head of investment management at private investment management firm Opto Investments.

☆ CPI Report Today: Dow Futures Edge Down Ahead of Inflation Data
▼ + stars: | 2023-05-10 | by ( ) www.wsj.com time to read: +1 min

Stock futures edged lower ahead of inflation data that will help determine whether the Federal Reserve keeps raising interest rates or pauses next month. ET, are expected to show annual consumer-price inflation stuck at 5% in April, while core inflation slowed slightly to 5.4% from 5.6%. S&P 500, Dow industrials and Nasdaq-100 futures were down 0.2% or more. Regional bank stocks slipped. Brent-crude futures fell 1.6% to $76.21 a barrel.

☆ How a U.S. Debt Default Could Bring Down the Dollar - The New York Times
▼ + stars: | 2023-05-10 | by ( Mike Lofgren | ) www.nytimes.com time to read: +2 min

So they might also consider another potential scenario: Ever since President Richard Nixon de-linked the dollar from gold, doomsayers have predicted the imminent demise of the dollar as the world reserve currency. Having the world reserve currency has allowed the United States to run very large budget, merchandise trade and current account deficits for decades. Nations with dollar surpluses can’t sit on them; they recycle them as investments in the United States. That is why New York has the most liquid financial markets in the world. These strong markets in turn encourage many foreign central banks to hold their assets in New York as well.

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