Posted on 04/19/2023 7:02:33 AM PDT by MeneMeneTekelUpharsin
BlackRock Inc. on Tuesday fetched prices of about 85 cents to 90 cents on the dollar for the first batch of assets sold out of $114 billion seized by regulators last month after the failures of Silicon Valley Bank and Signature Bank.
The first list, a roughly $292 million parcel of agency mortgage-backed securities with coupons of about 2.5% to 3%, rolled out before noon Eastern time, according to Empirasign, a platform that tracks trading activity in mortgage bonds and securitized products.
“The reality is that the whole point is for BlackRock to get rid of these assets,” said David Petrosinelli, senior trader at InspereX. “I wouldn’t be surprised if they were to accelerate the scale of sales, depending on what conditions look like.”
(Excerpt) Read more at marketwatch.com ...
This is huge news. There are more bonds to liquidate OTHER than the SVB bonds and the FDIC will not be able to get adequate value. The main thing to read is that they thought the FDIC was going to sell them in May, but decided to sell them EARLY. This means they KNOW something is going to happen to the markets real soon. Heads up.
I figure they need some sort of crash for the CBDC rollout in July.
This is exactly what caused the problem. Given that bank equity as a percentage of assets and liabilities is usually quite low, a 10-15% drop in asset prices is more than enough to make them technically insolvent.
And what is BlackRock’s cut on this deal? Did they pay say 50c on the dollar or what, or are they getting a fixed percentage of the sale?
2008 Deja vu?..........................
Actually, this is a good return!
I disagree. No bank buys loans at a fire sale without a discount.
This is a great return, compared with other banks during bad times.
bttt
I figure they need some sort of crash for the CBDC rollout in July.
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Exactly. I am not expecting the CBDC so quickly, but it is coming. Recall how quick everyone lined up to get the jabs? Fear, imagine how quick everyone will rush into digital, cashless when a MAJOR crash occurs and .gov lies ( again, “ safe and effective “) and says it is necessary to save your SS, Pensions, 401K’s.
FEAR of losing 401k’s, pensions, life‘s savings will have the masses supporting a cashless system- yes, even Christians who should know better. Pray hard for the gift of Discernment.
The “ good news”? Sovereign Digital currencies will also fail….very, very , very interesting times …. For those gifted with Discernment.
Yes, it is. The main point I was making is that they were supposed to sell them in May, but decided to jump the gun and get it done NOW. That KNOW something bad is coming.
That's my thinking, too. I might have guessed 50%, if I had to, but thank God, I didn't have to.
The buyers are not buying a 2nd hand piece of equipment from a specialized manufacturing company that's gone bust. These are very liquid assets - effectively backed by Fed.gov. There is a very large market for them.
My point is - the fact that SVB was loaded up with perfectly good bonds, that had declined 15% of value - is the reason they went bankrupt.
How many other banks have the same problem on their balance sheets?
It is really too early to tell. If I were selling those assets, I would sell the best ones first, to pump up the offering prices for the dogs and cats that go on the block later.
This was only the first very small batch of a whole lot more to come.
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