{"id":23815,"date":"2017-05-01T10:27:07","date_gmt":"2017-05-01T15:27:07","guid":{"rendered":"http:\/\/olduvai.ca\/?p=23815"},"modified":"2017-05-01T10:57:41","modified_gmt":"2017-05-01T15:57:41","slug":"this-is-what-a-bank-run-looks-like-home-capital-loses-70-of-deposits-in-one-week","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=23815","title":{"rendered":"This Is What A Bank Run Looks Like: Home Capital Loses 70% Of Deposits In One Week"},"content":{"rendered":"

This Is What A Bank Run Looks Like: Home Capital Loses 70% Of Deposits In One Week<\/a><\/h3>\n
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In the beginning it was a slow pace, then it became a casual jog. Then, starting early last week, the jog morphed into a full-blown run, and – as of the past 3 days – the withdrawal of deposits at Home Capital Group’s high interest savings accounts has mutated into a full blown mad dash not to be the last person to have their money at what is now an effectively insolvent alternative lender.<\/div>\n
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According to HCG’s latest press release this morning<\/a>, the “less than prime” Canadian mortgage lender held HISA deposits of only $391 million as of Monday, May 1; this is down C$130 million from Friday, or a reduction in the total amount by 25%. It is also down 72% from the C$1.4 billion reported one week ago.<\/strong><\/p>\n

For those who need to think all the way back to the third Greek bailout of 2015 to recall what a bank run looks like, here is what the deposit situation at HCG has looked like over the past month.<\/p>\n

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There is some good news: a terminal bank run at the mortgage lender has already been largely factored in, and is largely covered courtesy of the recently announced $2 billion emergency loan from the Ontario Pension Plan – putting up to 321,000 retirees on the hook – which carries a pre-bankruptcy interest rate of as much as 20%.\u00a0 To this end, HCG announced\u00a0today that its subsidiary, Home Trust, expects to receive the initial draw today of $1 billion from its\u00a0$2 billion credit line.<\/p>\n

However, there is another problem: the company has another C$12.8 billion in\u00a0 Guaranteed Investment Certificate deposits, or GICS. As these 30- and 60-day deposits come due in the coming weeks, depleting HCG’s already tapped out liquidity, and forcing even more emergency loans. Without a deposit base, Home Capital can\u2019t fund new mortgages.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

This Is What A Bank Run Looks Like: Home Capital Loses 70% Of Deposits In One Week In the beginning it was a slow pace, then it became a casual jog. Then, starting early last week, the jog morphed into a full-blown run, and – as of the past 3 days – the withdrawal of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[2086,103,7287,2340,4318],"class_list":["post-23815","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-run","tag-canada","tag-home-capital-group","tag-housing-market","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23815","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23815"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23815\/revisions"}],"predecessor-version":[{"id":23817,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23815\/revisions\/23817"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23815"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23815"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23815"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}