What about it blowing up and causing necessary economic harm?
As a client of First Republic (for over a decade), thought their customer service and business model was solid,… what I neglected to factor in is poor planing and panic (by others)
Basically was careful to structure my own deposit accounts so things were covered by FDIC insurance (but seems 2/3 of First Republic deposits were NOT covered by FDIC insurance)
The other thing I found out is unlike many other First Republic clients, I actually paid down the mortgage principal,… whereas from what I gather a great majority of other First Republic clients structured their mortgages as interest only (the reason being most people wanted to max out cash on hand AND/OR were not planning keeping their properties more than seven years,… so why pay down a loan when the RE market is going UP & your planning to flip into something else)
Long story short First Republic was a regional bank that worked to accommodate people in unique financial situations (e.g. the “Eagle Community home loan program”)
…which is something I didn’t see at Chase (full disclosure I have business accounts at both Chase AND First Republic and of over a decade have been using them both in parallel,… during the period of essentially zero interest rates)
…figured that was a good sign, so bought shares of FRC @29 (thinking it was a bargain)
What I didn’t factor in and only realized after the fact that bonds various banks (have on their balance sheets) have lost 600+ billion in market value (AND is the explosive debt charge that just needs a spark to set things off)
I lost some money betting that FRC was a fluke,… sad truth is, it wasn’t’!!!
