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Banking Crisis Fears Return as PacWest Tumbles. More Banks Are Collapsing?

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Chatterbox Moo wrote a column · May 4, 2023 04:18
$PacWest Bancorp(PACW.US)$ confirmed it's in talks with several potential investors, seeking to calm markets. The concern over the health of US reginal lenders became the new focal point.
Shares in PacWest plummeted as much as 60% in after-hours US trading on Wednesday after Bloomberg News reported it was considering strategic options including a sale. The sudden decline in Wednesday's extended session wrapped in other banks' stocks $Western Alliance Bancorp(WAL.US)$ $Comerica(CMA.US)$ $Zions Bancorp(ZION.US)$.
Banking Crisis Fears Return as PacWest Tumbles. More Banks Are Collapsing?
The US regional banking system is at risk and the regulator's failure to update and expand its insurance regime has "hammered more nails in the coffin," Pershing Square's Bill Ackman said.
$First Republic Bank(FRCB.US)$, acquired by $JPMorgan(JPM.US)$ on Monday, became the second-largest lender to collapse in US history, and the fourth regional lender to collapse since early March after Silvergate Capital Corp., SVB Financial Group's Silicon Valley Bank and Signature Bank.
Banking Crisis Fears Return as PacWest Tumbles. More Banks Are Collapsing?
Banking is a confidence game. At this rate, no regional bank can survive bad news or bad data as a stock price plunge inevitably follows, insured and uninsured deposits are withdrawn," Ackman said.
Short sellers have made $1.2 billion in paper profits betting against U.S. regional lenders in the first two days of May, analytics firm Ortex said. Here is a list of companies that generated the most profits for short sellers on May 1 and May 2:
Banking Crisis Fears Return as PacWest Tumbles. More Banks Are Collapsing?
Mooers, do you maintain confidence in the banking system? Is PacWest Bancorp the next regional bank to fail?
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more
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Chatterbox Moo
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