The thing that you have to remember, for example, people have been talking about the fact that Credit Suisse was bought for $3 billion, that UBS came in and bought them for that.
I don't know if she pulled that out or if she'd been drafting something to get ahead of the game so that she could drop that. You don't have to see the equity hit too hard before you're in crisis mode."īill Mann: It's an amazing quote. These banks are less leveraged than they were in 2008. Referring to the events of the last three weeks, she said, and I'm quoting here, "It's deja vu. She gave an interview on CNBC this morning, and I want to get your reaction to something she said. I believe she's running Ellevest.Ĭhris Hill: I believe we've had her on this show. I imagine that some of the fact that they're not speaking is that they recognize that all they could do is destabilize something that is much more politically popular and powerful than they are.Ĭhris Hill: Sallie Krawcheck, who at one point was the CEO of Merrill Lynch Wealth Management. You can imagine every single congressional district has the pillar of the community who also runs the local community bank.
They may be the ultimate beneficiaries.īut from a political standpoint, it's the smaller banks that have a lot more power in Washington with regulators. I think it's really important to note, and Ezra Klein mentioned this the other day, and I think it's exactly right, that the small banks who are the ones that are in the crosshairs right now because you can think, as a logical progression, if everyone has to worry about the safety of their deposits, they're going to move them into larger and larger banks. I am" article come out for member comments coming out from them. I understand exactly what you're asking, because we would love to see that Warren Buffett "Buy American. I'm assuming, at least in the case of Jamie Dimon and Brian Moynihan, they're keeping quiet because they are doing their jobs and looking for opportunities for their banks and their shareholders.īill Mann: I don't think that there's really. You can go back to 2008, where Buffett's stepped in and, both with his actions and his words provided, support and comfort to the investing public. They were wrong about the value of their assets.Ĭhris Hill: One of the things I'm wondering now more prominently than I was wondering a week ago is, where are the Jamie Dimons and Brian Moynihans and Warren Buffetts in this story? Because I felt like we would have heard from them by now, and I'm wondering what, if anything, you read into their silence?īill Mann: Are you looking for like "now is the perfect time to panic"?Ĭhris Hill: I wasn't looking for that, but I'm wondering where they're clearly paying attention to everything that's happening. That's what has happened at Credit Suisse. They were wrong about the value of their assets. That's what ultimately happened at Silicon Valley Bank. When you have situations like this, what is happening is that the best guess that they had before was wrong, and it was wrong in a way that impacts the equity value of the bank.
They will tell you in accounting exactly what they're worth, but that is a best guess. It's impossible really to tell, when you talk about the assets of a bank, what they're worth. The utility is the deposit-making franchise. You have the utility, which has a bunch of leverage attached to it. With banks, you ultimately have to remember that they are utilities at their core, and then on top of that is a risk-taking organization. I basically said part of what's unsettling about this is we're not going to know when it's over until it's been over for a while.īill Mann: No, that's how it goes. Bill Mann: I just wanted to give you some validation.Ĭhris Hill: Moser and I talked about this yesterday.
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