Bridger PenningtonFund Launch & Investment Expert

Will more banks collapse in 2024?

4 Mar 2024 · 1 min

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1:00

In this video, the narrator examines the recent regional banking crisis that saw the collapse of Silicon Valley Bank, Signature, First Republic Bank, and others, prompting the Federal Reserve to create the Bank Term Funding Program (BTFP). The BTFP, which provided short‑term liquidity, is set to expire on March 11, 2024. Coupled with growing strains in the commercial real‑estate market, the narrator questions the stability of regional banks. He reviews the year‑to‑date stock performance of several regional banks (KeyCorp, Axis, Zions) which are roughly break‑even, contrasted with JPMorgan Chase’s ~30% gain, largely driven by buying distressed assets at deep discounts (e.g., First Republic purchased for about 8 cents on the dollar). The video concludes by suggesting that further bank failures could create trading opportunities—shorting failing banks or going long JPMorgan Chase—and invites viewers to share their own strategies.

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Are more banks going to fail in 2024? Now, last year, Silicon Valley Bank, Signature, First Republic Bank, and a handful of other banks all collapsed during the regional banking crisis, which triggered the Fed to step in and launch the Bank Term Funding Program, or BTFP. Now, this worked in the short term, but this is coming to an end on March 11th, 2024. This, with mounting cracks in the commercial real estate market, has made a lot of people question the stability of the regional banking market right now. So I decided to go look up many banking stocks over the past year, like KeyCorp, Axis, and Zions Bank, many of which are almost at break-even for the year, all except for JPMorgan Chase, who is almost up over 30% over the last year. This was largely charged by buying assets from these regional banks for pennies on the dollar. For example, JPMorgan Chase bought First Republic Bank for about 8 cents on the dollar. Now, if more banks start collapsing in 2024, this could be an interesting market to short or go long JPMorgan Chase. But I'm curious what you guys would do. Comment down below what you think.