Extreme Fear Strikes! Will "Bank Run" Repeats?
$Cboe Volatility Index(VIX)$ surged to 25 yesterday, marking the market’s return to extreme fear after months of calm — and the culprits were two regional banks that just blew up.
$Zions(ZION)$ plunged 13.14% after revealing a $50 million charge-off tied to a revolving credit facility underwritten by its subsidiary in San Diego.
$Western Alliance(WAL)$ also tumbled 10.83%, admitting it had lent to the same group of borrowers.
The panic quickly spread across the entire regional banking sector:
$Columbia Banking(COLB)$ dropped 7.92%, $Bank of Southern California NA(BCAL)$ fell 7.8%, and several other banks lost over 7%.
🏦 2023 Bank run repeats?
This week’s loan issues mark the latest challenge for U.S. regional banks, echoing the 2023 SVB crisis that sparked a sector-wide confidence shock. The current fears originated from the bankruptcies of two auto-related companies: First Brands and Tricolor Holdings.
Auto parts manufacturer First Brands declared bankruptcy last month and announced the resignation of its founder and CEO, Patrick James, this week. According to insiders cited by media, the Ohio-based company is now under criminal investigation by the U.S. Department of Justice.
$Jefferies Financial Group Inc.(JEF)$ , which has exposure to the bankrupt auto parts supplier First Brands, plunged 10.62% Thursday and is now down ~23% in October, heading for its worst month since March 2020.
JPMorgan and Fifth Third Bancorp disclosed hundreds of millions of dollars in losses tied to Tricolor Holdings.
The two bankruptcies prompted $JPMorgan Chase(JPM)$ CEO Jamie Dimon to issue a chilling warning during the bank’s earnings call this week:
“If you see one cockroach, there might be more. Everyone should stay alert.”
Contagion spreads to alternative asset managers — who’s oversold, and who could fall further?
The fear didn’t stop with banks. Concerns over loan quality spread rapidly to the private credit market, dragging down alternative asset managers and investment banks alike.
Alt managers under pressure: $Blue Owl Capital Inc.(OWL)$ fell 7%, $Ares Management LP(ARES)$ dropped 6.55%, $Blackstone Group LP(BX)$ lost 3.6%, $Apollo Global Management LLC(APO)$ slid 5.3%, and Carlyle Group (CG) declined over 4%.
Investors worry that the opaque nature of the private credit market hides greater risks beneath the surface.
Previously, bankruptcies tied to subprime auto lenders like Tricolor Holdings had already led to losses for JPMorgan, Fifth Third Bancorp, Jefferies, and UBS, with exposure estimated at hundreds of millions of dollars.
💬 Will this regional banking turmoil continue to spread?
💬 Do you agree with Jamie Dimon’s “cockroach” warning?
💬 As Bitcoin and big-name growth stocks keep sliding, which sectors or stocks could emerge as the next opportunity?
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汽車零部件製造商第一品牌上個月宣佈破產，並於本週宣佈其創始人兼首席執行官帕特里克·詹姆斯辭職。據媒體援引內部人士稱，這家總部位於俄亥俄州的公司目前處於刑事偵查由美國。司法部。
$傑富瑞金融集團(JEF)$，該公司面臨破產汽車零部件供應商的風險第一品牌，暴跌10.62%週四，現在下跌10月份約23%，走向它的2020年3月以來最糟糕的一個月.
摩根大通和第五第三銀行披露數億美元的損失三色控股.
我个人认为，短期内市场的反应可能会有点过度，但中期风险仍然存在。过去几年私人信贷市场膨胀太快，尤其是在高利率环境下，很多中小企业借贷成本暴涨，现金流压力加大。如果更多企业开始违约，那确实可能重演一场“迷你版”银行挤兑，只不过这次的导火线是信用风险，而不是存款挤兑。
至于机会，我反而会关注防御性板块和高股息蓝筹，比如公用事业、医疗保健或大型能源股。比特币和成长股的调整可能还没到底，但若市场恐慌延续，黄金、国债ETF甚至日元，都会重新获得避险买盘。短线要稳，现金流安全第一。
Still, the system today is stronger, with higher capital ratios and better liquidity buffers. But cracks in private credit and auto-related loans can’t be ignored. The exposure of Jefferies, JPMorgan, and Fifth Third shows how traditional finance & alternative credit are now deeply linked.
I’m watching for overreactions, some solid regional banks could turn undervalued if panic persists. Meanwhile, defensive sectors like utilities, healthcare, or even gold miners may regain favor as investors seek safety. Staying cautious but alert — fear often breeds the best setups for the next rotation.
@TigerStars @Tiger_comments
🚨📈🔥 Volatility Spike Fades, Bulls Hold the Line 🔥📈🚨$VIX jolted awake this week, hitting its highest levels since April. U.S.–🇨🇳 flare-ups, $ZION and $WAL loan jitters, and a certified gold rush stirred the tape, yet major indexes held firm with solid weekly gains. The weekly candle suggests October’s volatility burst may be fading; historically, spikes topping in the 28.30–30.80 zone have reversed, with August 2024’s surge to 65.73 the lone outlier.
VIX has slid from 29 to 21, $SPX is holding above 6650, and $QQQ remains above 600, reinforcing market resilience. With FOMC on October 28–29 and no fresh data this month, I’m sitting 95% in cash, keeping my powder dry to avoid unnecessary drawdowns. Today’s Nasty VIX Crush Friday™ perfectly sums up the tape: fear spikes are being sold hard.
👉❓Are we seeing a seasonal fake-out setting the stage for a Santa melt-up, or the calm before the next fear leg?
Zions took a USD 50 million hit. Western Alliance sued a borrower for fraud. The market did not just flinched, it recoiled. Why? Because it wasn't just about numbers but memories of Silicon Valley Bank style blowups.
Jamie Dimon warned that if you see one cockroach, there are probably more.
Should we be worried ? While concern is warranted, let's not press the panic button.
Zions and Western Alliance maybe isolated cases but they expose a deeper fragility of rising defaults and trust in the regional banks.
VIX at 25 is a flare. Not a fire but a warning.
Cockroach theory isn't about doom. It is about vigilance.
@Tiger_comments @TigerStars @TigerClub @CaptainTiger
This is the same as then. There is a massive AI buy in but until the big companies miss their earnings it will remain over bought.
Trump and his Willy waving caused this upset.
Think of it as a portfolio insurance : you pay a premium to guarantee a minimum sale price for QQQ even if the market crashes.
Protective Put is like a parachute, letting you soar with conviction while guarding against a sudden fall.
@Tiger_comments @TigerStars @TigerClub @CaptainTiger
Maybe it's another opportunity for everyone to buy in when the market crashes
It’s a confidence echo — a reminder that liquidity is thinner than it looks.
Every quick rebound teaches traders the wrong lesson: that fear always fades.
Until the one time it doesn’t.
Don’t panic. Don’t chase.
Stay nimble, stay awake — and trade what the tape gives you.
I feel that the cockroach warning is a little overrated. Although this could be a warning sign of other businesses in the same situation that is yet to be announced, I feel that there is no need to jump ahead of clarity. I prefer to watch for more earnings reports of the other banks and to evaluate the situation.
This could be mirror the SVB situation and I think the bitcoin and big name growth stocks will rise again. There is expected rate cuts, wars ceasing, trump’s threats of tariffs and then TACO—these are potential positives that would lift stock prices. I prefer to continue in my ETFs, AI and tech exposure as well as China exposure.
The “cockroach” warning is valid, as early losses indicate deeper, hidden risks, particularly in private credit and non-bank lending
Opportunities are likely to be found in high-quality large banks, defensive sectors such as healthcare and consumer staples, strong cash-flow technology companies, as well as in gold and undervalued assets。。。
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