Bottleneck Capital
Long/Short Investor, Technology, Media & Telecom
Bank of America risks losing its near-free checking deposits if cash agents move idle balances out between paydays. If software forecasts bills and refills checking before they're due, a fat cushion at the bank stops making sense; the bank keeps the customer but loses the cheap deposit. BAC averaged $957B of consumer deposits last quarter, 59% in checking, and paying more to keep cash hurts the spread. Broader transfer authority would speed outflows; for now, watch deposit costs. x.comÂ
US banks remain a working short as AI agents could trigger faster deposit flight, an "agentic bank run" flagged via Apollo's Torsten Slok. The short covers Citigroup, Bank of America, JPMorgan, Wells Fargo, Morgan Stanley and the financials sector into earnings. x.comÂ
AI savings agents threaten the deposit spread behind the four largest US banks' profits. Per a Jefferies report, UK firm Riff's agent automatically moves money out of zero-interest accounts; if it scales, such balances could fall 80% and deposit margins from 190 to about 20 basis points, a hit near 80% of major UK bank profits. JPMorgan, Bank of America, Wells Fargo and Citigroup earned $69B of net interest income last quarter, over double their profits. Jefferies calls it 'when, not if'. x.com … Show more
Bank negativity may be priced in for Goldman Sachs, Morgan Stanley and Bank of America; stable credit and an active deal pipeline could bring relief. Goldman and Morgan Stanley are down about 14% in three months and sit 22% and 17% below their highs, respectively; Bank of America lost 13% in a month. x.comÂ
NewtekOne has quadrupled deposits in three years, and AI agents should extend that trend rather than stop it. Once consumers set up a trusted agent to move cash, big banks can't stem outflows with small rate bumps. An agent might instead shift cash into CDs at the same bank, which still hurts incumbents' net interest margin. x.comÂ
Bank of America's earnings miss extends beyond its one-time fine, so the selloff may not yet be fully priced. Investment-banking fees fell 11%; wait for fee income to stabilize before treating the drop as merely a fine scare. x.comÂ
Bank of America screens attractive at 12.3x on Wide Moat Intelligence, backed by an impressive dividend history. x.comÂ
Bank stocks look buyable if systematic selling is reacting to a flatter yield curve: the front end that drives earnings has barely moved. JPMorgan and Citi card spending rose 10% and 13%, and Citi and Wells Fargo reported lower credit losses. Wells expects steady margins and improving interest income as loans grow and old fixed-rate assets roll into higher yields. Funds crowded into banks before results, limiting near-term buyers. x.comÂ
Palantir could become harder to replace if its account-opening software helps banks bring in deposits faster and becomes part of their daily workflow. Its latest banking deal targets that process, adding a potential retention mechanism to its AI-revenue case. x.comÂ
The big six US banks should report great Q2 results as the front line of a solid economy. Net interest income, fee growth, steady credit trends and capital levels all look supportive, and valuations remain cheap, leaving opportunities to add. x.comÂ
Post-midterm fiscal tightening and student-loan garnishments will crush US banks and home values. Bessent says massive deficit cuts are coming, while 10 million borrowers in default face wage, benefit and potentially asset garnishment after the midterms; these measures will destroy the economy and banks. x.com x.comÂ
