Correspondent Blog

Last Friday night, the SBA released the long-awaited Paycheck Protection Program (PPP) application, and while it clarified some aspects of the program, its complexity also surprised many bankers. In the SBA’s defense, it is hard to strike the right balance of speed to market, simplicity, and breadth of idea inclusion, so overall, we must give…

Reopenings, Vaccines, and Fiscal Stimulus Much like the last several weeks, trading will once again be focused on assessing the status of the partial reopenings and any virus news. On that latter front, some upbeat news on phase 1 vaccine trials has set the market on a risk-on mood this morning.  Last week, equity markets…

While the equity markets have been trying to look past the current economic numbers and focus on reopenings, and the hopes of better times to come, we did get retail sales numbers this morning and like most of the other April reports it paints a gruesome picture. Given the consumption-focused nature of our economy it…

Investors will be focused on comments this morning from Fed Chair Powell at a live stream event with the Patterson Institute for International Economics. Possibly the most intriguing thing the market will be looking for is Powell’s resolve to resist negative interest rates. No current FOMC member has expressed a willingness to go there but…

In past articles, we discussed a proposed Coronavirus stress test under CCAR and provided our COVID-19 probabilities of default and loss given defaults for a model bank portfolio. In this article, we update our CRE modeling and take a deeper dive into loan-level analysis in order to help banks triage and manage both individual credits…

We have blogged about checklists for returning to work and the models available to bankers to decide when to call employees to the workplace. In this article, we describe specific protocols for returning employees to a bank office, which will have no customer interaction – a much easier protocol than a bank branch reopening to…

Trading this week will once again focus on any news regarding partial economic reopenings in various states and localities. Last week, equity markets resumed their optimistic run while Treasuries assumed their more circumspect role after a mid-week softening following larger-than-expected funding plans by the Treasury. The April jobs report was every bit as bad as…

 The worst employment report in our lifetime is out and the market reaction is mixed. That’s because the May report is likely to be even worse and the range of estimates in this one were so wide that the only deeply held conviction had to be, “it’s gonna be bad.”  Also, as we’ve often mentioned…

The worst jobs report in our lifetimes will arrive on Friday but it’s not likely to evoke much of a reaction in markets, which is another sign of the strange times we are living through. With April job loss estimates above 21 million, and an estimated unemployment rate near 16%, those sobering numbers are made…

As you wind down and clean up Round 2 of the Paycheck Protection Program (PPP) and before you produce your 1502 report to the SBA, it now merits thinking about how to best set up for the wave of forgiveness work that starts immediately after funding. Obtaining forgiveness is critical to both the bank and…

This week the focus on trading will be mostly about assessing the status of the tentative economic reopenings happening in various states and localities, and a secondary eye on the wreckage that will be the April jobs report. Equity markets had been trading almost exclusively on optimistic—perhaps too optimistic—outlooks stemming from coronavirus case trends, but…

In these challenging times, both bankers and bank customers are stressed and exhausted. Typical schedules are disrupted, work environments are upended, and business models are challenged.  Because this pandemic shock has brought us into new territory, there has never been a better time in modern banking history than now to enhance your value as a…