AP Photo/Richard Drew
A tumultuous investment market continues to rock the economic sector after the stock price of First Republic Bank took a sharp nosedive on Monday. This comes just days after the collapse of Silicon Valley Bank (SVB) and Signature Bank.
First Republic shares plummeted over 70% during Monday’s early trading. The drop followed the company’s announcement over the weekend that they had received an infusion of capital from the Federal Reserve and JPMorgan Chase.
The San Francisco-based regional bank has 7,200 employees and over $200 billion in assets. CEO Mike Roffler told investors and depositors the company remains strong and “its capital remains well above the regulatory threshold for well-capitalized banks.”
President Biden addressed the recent collapses of SVB and Signature early Monday morning, attempting to reassure Americans that the banking industry is safe and their deposits protected. He touted regulations put in place following the 2008 economic collapse, but also inserted a dig at his predecessors in the Trump administration.
Interestingly, First Republic’s troubles were predicted by CNBC trading “guru” Jim Cramer, in a twisted sort of way. It turns out Cramer had strongly recommended SVB stock recently, even at its peak price of $320 per share. He also recommended buying shares of Signature Bank last year. RedState writer Bonchie noted Cramer’s track record moved from coincidence to downright eerie with Monday’s First Republic news.
Alright, maybe twice is just bad luck, but there’s more. Cramer is going for some kind of record, and in the middle of SVB’s downfall on Friday, he decided to endorse First Republic Bank (FRC). “Very good bank,” Cramer proclaimed on social media.
By the time the market opened up on Monday, FRC was in a total freefall.
Other regional banks are taking hits as the investment market continues to tumble. Zions, Pacific West, Western Alliance and others are feeling the heat, and over a dozen other regional banks were forced to stop trading on Monday to protect investments.
From CBS News:
In a statement on Sunday, CEO Mike Roffler said the bank “continues to fund loans, process transactions and fully serve the needs of clients.” Seeking to reassure investors and depositors, he also said the company’s “capital and liquidity positions are very strong, and its capital remains well above the regulatory threshold for well-capitalized banks.”
First Republic has more than $70 billion available in unused funds, the bank said. The company did not immediately respond to a request for comment.
President Biden hasn’t been widely viewed as a confident leader in turbulent times. There is a distinct disconnect between multiple departments in his administration. Earlier this year, the revelation of a Chinese spy balloon floating undeterred across the span of the United States exposed a gross lack of communication between key defense and intelligence departments. On Monday, former press secretary Jen Psaki inadvertently admitted that Biden is largely unavailable for any work at all during the morning hours, saying it was a big deal for him to be up and giving statements on the financial crisis so early on Monday.
“President Biden does nothing at 9 AM,” Psaki revealed. “The fact that he’s [giving a speech about the bank failure] at 9 AM speaks to how vital the White House recognizes it is.”
Biden’s staff have described him as someone who prefers to be in bed early. This leaves America wondering just when the Commander-in-Chief is awake to deal with this crisis and the myriad of crises facing the nation since he took office.