[jsemrau]

Wild. I wrote a "junior equity analyst" autonomous agent and this was the reply a couple of days ago "First Republic Bank's growth prospects may be limited by its narrow focus on high net worth clients, which may not provide sufficient diversification in the event of an economic downturn. Additionally, the bank's high cost structure and low efficiency ratio may make it vulnerable to margin compression and increased competition. Finally, the bank's exposure to the California real estate market may pose significant risks in the event of a housing market downturn. "

[graeme]

That isn’t at all what the person you’re replying to wrote. the key to what they wrote is the loans were highly vulnerable to interest rate swings as there were no principal repayments.

The bank didn’t bust due to HNW people going bust.

[jsemrau]

I was more focusing on the last part about the real estate market.

[graeme]

That's still not right though. They didn't hit trouble because the market had a downturn. They hit trouble because when the loans were highly sensitive to rate rises.

If you have $1,000,000 in principle, at 3% you pay $2500 per month. At 9% you pay $7500 per month. Even if the house is still worth a million you can't necessarily afford the payments.