Community Banker sharing insights and dropping jokes. Surviving this Fintech universe.
Joined April 2022
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This is applied to community banking today. Older bank management knowledge is pretty irrelevant. 80% of their knowledge can be accessed instantly. A younger innovative person worth way more now.
Marc Andreessen revealed how Harvard Business School was built on a broken 1941 theory, and how it's now collapsing...
Andreessen co-founded Netscape in 1994 and a16z in 2009.
He has sat on Meta's board since 2008.
He has spent 30 years backing founders and watching managerial CEOs lose to them.
The pattern traces back to one book: James Burnham's The Machiavellians (1941).
Burnham argued every great company had been founder-run.
Henry Ford ran Ford. Bob Noyce ran Intel.
Today, Elon Musk runs Tesla, SpaceX, and Starlink.
Then, he said, something broke.
Between the 1880s and the 1920s, a new philosophy replaced the founder. It was called managerialism.
The professional manager would now hold a portable skill, usable across any business.
The consequences were:
- Harvard Business School
- Stanford Business School
- Management as a universal skill
- The 1970s conglomerate
"That assumes the managers are going to do a good job," Andreessen says.
For 30 years, they haven't.
Managers can run something static, he says. Soup is soup. A bank is a bank. A car is a car.
But when the industry changes, the manager freezes.
Look at SpaceX.
"Imagine being a professionally trained manager, trained at a top management school, working for a rocket launch company, competing with SpaceX."
Then Elon's rockets started landing on their butt.
"Your management skills ... what good are they at that point?"
Andreessen's conclusion:
"You're much more likely to build something important in the 21st century if you start with the founder and train them on management."
Can’t wait to blow up my IT people tomorrow about bot/agent detection systems, passkeys and cryptography, session hijacking by agents, legal language changes to protect us, and screen scraping mitigation ideas.
💡 🤔
I’m seeing a couple of banks cut back on their provision expenses while still growing loans in order to make their numbers.
Trick or treat? 🎃
No doubt in my mind that the people who think they are the smartest person in every room are usually the dumbest.
Knowing a lot won’t agree with me here but I see this bond market move as finally a way to get out of duration while you can.
Good move. Once you have the distribution method, you go backwards to the real infrastructure and monetization.
On Friday, Ramp submitted an application to the Office of the Comptroller of the Currency (OCC) to establish Ramp National Trust Bank.
If approved, the charter would allow the trust bank to offer fiduciary investment management and custody of digital assets.
The proposed trust bank would bring these services under a consistent federal regulatory framework, helping us build great products alongside our banking partners to further our mission to save businesses time and money. It will not take deposits or make commercial loans.
Again, banks need agents within their own platforms to help a customer open and manage accounts. Risk is too high to allow outside agents.
Community Banker Guy retweeted
Guys, we're in the age of AI... you can literally go to Zillow data, download the sheets, throw in AI and see the real estate trends.
At the moment, inventory looks to get settling at pre-2020 territory.
Days on market is the next image on the thread...
Home values for the top 20 metros the last one.
From the mass data dump... here's the interesting tidbits:
Austin, TX (#29 largest metro), the biggest crash in any sizable market
- Typical home value is down about 27% from its June 2022 peak and it’s still falling
- There are about 15,200 homes for sale, 70% more than in 2019 and more than 3x its 2022 low.
- Homes take about 82 days to go under contract, nearly double the 2019 average of 44.
Southwest Florida, where prices and speed are both getting worse
- Cape Coral / Fort Myers: down 19% from peak and 119 days to sell.
- North Port / Sarasota: down 17% from peak.
- Naples: down 12% from its 2024 peak. At 130 days to sell, it’s one of the slowest markets in the country.
Other notable ones
- Kahului (Maui), HI: days to sell jumped from 98 to 134 in one year, the biggest one-year jump of any meaningful market. Prices are down about 10% from their 2024 peak.
- Florida Panhandle (Panama City, Crestview): over 100 days to sell, up about 35 days from 2019.
- Louisiana (New Orleans, Houma, Lake Charles): prices are 11–17% below peak, and Houma takes 126 days to sell.
- San Antonio and Killeen, TX: a smaller version of Austin. San Antonio is down 10% from peak, and Killeen takes almost twice as long to sell as in 2019.
- Colorado (Colorado Springs, Boulder, Pueblo): prices are down 7–10%, and Colorado Springs has 50% more homes for sale than in 2019.
As with every year, enjoyed the FINTOP Summit. AI companies making a lot of progress on new tools for community banks to use. I didn’t feel that way last year but this is different. They are on the right path.
Once banks have the ability to detect agents, they will be shut off from transactions until we have agents to verify the permissions. Companies are working on it but it doesn’t exist today.
Brainfood founder @sytaylor says 3 bank CEOs called him in a panic over Meta's Muse, asking whether they need to launch their own AI agents:
"I spoke to three bank CEOs a couple of weeks ago. They were all calling me in a panic saying, 'What do we do about Muse? Should we be launching our own agent? Do we have to move now?'"
"Maybe my agent could be my stock picker. Maybe it could be sweeping cash into an overnight fund. Imagine if you had this private banker in your pocket just doing stuff for you."
"How, as a financial institution, do I sell to an agent versus selling to a human? Maybe I'm not sponsoring stadiums anymore. I've gotta up my AEO game quite dramatically."
Insane and really cool to watch what happens here.
🚨 BREAKING: Palmer Luckey's Erebor Bank has passed $7bn in deposits.
Erebor is the national bank Luckey and Joe Lonsdale built to fill the hole SVB left.
The FT reports it added more than $3bn and 500+ new customers in the past quarter, on top of the $4.06bn in its June call report.
That's
- $1.1bn in March,
- $4bn in June,
- $7bn now,
and a $6m average new account.
It's raising $1.5bn at an $8bn pre-money valuation.
It also just ended free stablecoin redemption at par for everyone but big depositors.
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The deposit growth is forcing the raise.
Erebor has to hold a 12% leverage ratio (per its granted charter), so a balance sheet this size needs roughly $900m of capital. It had $597m at the end of June.
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As is the "at par redemption of stablecoins"
Stablecoin redemption at par costs money to provide. Tether charges 0.1% for it. Erebor charged zero. The fix tells you what the product is.
Wintermute and Galaxy Digital taught Erebor a stablecoin lesson in arbitrage.
At launch, Erebor let customers turn USDC and USDT into dollars at $1 per token, free. Tether charges the greater of $1,000 or 0.1% for direct redemptions. Erebor charged nothing.
So Wintermute bought USDT a fraction below $1, sent it to Erebor and collected the full dollar. Rinse and repeat.
Galaxy Digital ran the same trade (per The Information).
Erebor told them to stop, but then kept free conversion for customers with sizable deposits, and put volume fees and limits on everyone else.
Traders gonna trade 🤷♂️
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This bank still isn't lending. At all.
The Q3 call report lands by the end of October, and that's where we'll see how much of the $7bn is cash at the Fed and how much is lent out, if any.
I can't think of another de novo that has grown like this.
It's a huge success story. And it absolutely can raise, and solve problems for clients along the way.
What I'm *fascinated* by, is if they can become sustainable along the way.
For my bankers, we are looking to reevaluate our wire process. Too manual and wire volume is growing 2x. Any good solutions that are plug and play software ?
FWIW, we have reached our net loan growth goal for the year (10%) with a quarter to spare. Pipeline remains robust and looking like 15% net growth for the year.
One of the senior legal minds at ICBA explained this to a group of us a few weeks ago. Very interesting. 🤔
First in AB: ICBA goes on the offensive on trust charters with a new lawsuit americanbanker.com/news/excl…
I don’t see banks allowing agents to conduct transactions to conduct transactions or limiting the amounts they could move as a security tool. I think agents will be within each bank platform that will talk to yours.
