The Failure of First Republic Bank | Chris Whalen & Randy Woodward

Today First Republic, America’s 14th largest bank, was taken over by the Federal Deposit Insurance Corporation (FDIC) who sold the vast majority of the stranded assets to banking giant JPMorgan Chase & Co ($JPM). Jack welcomes two veteran bankers, Chris Whalen, chairman of Whalen Global Advisors, and Randy Woodward, managing director at Raymond James, for an in-depth look at why First Republic and how the banking system can move on from today’s takeover.

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Timestamps:

(00:00) Intro

(00:48) The "False Narrative" About First Republic

(04:44) "The Bondholders Will Get Toasted First"

(07:06) "We Just Need More Time"

(09:54) "The Fed's Got To Cut"

(11:52) Credit Availablity Has Already Come Down

(15:03) Why Did The Fed Buy Mortgage-Backed Securities (MBS)?

(19:35) Commercial Real Estate (CRE)

(23:30) Mortgage REITs & Interest Rate Risk

(37:36) "The Loss To The FDIC Will Grow”

(40:55) Permissionless

(41:58) Is The Fed Really To Blame For Bank Failures? (Jack Pushes Back)

(52:58) The Fed's Bank Term Funding Program (BTFP)

(55:38) Blockworks Research

(56:37) Moral Hazard Argument About Deposit Insurance

(01:05:51) Tease At Future Interviews On Forward Guidance

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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.