Commercial real-estate risk for banks points to opportunities for other investors

The risky commercial real-estate market — and not only partially empty office buildings — came to the fore again this week when shares of New York Community Bancorp

fell 38% on Wednesday and dropped another 11% on Thursday.

New York Community Bancorp nearly doubled in size over a two-year period that included the acquisition of Flagstar Bank of Troy, Mich., in December 2022 and deposits and loans from the failed Signature Bank of New York in March 2023. As a bank with over $100 billion in assets, NYCB will need to begin submitting annual capital plans to the Federal Reserve in April. The bank cut its quarterly dividend drastically while also boosting loan loss reserves.

Steve Gelsi covered the NYCB developments and reaction:

Joy Wiltermuth interviewed Ran Eliasaf, founder and managing partner of the Northwind Group, who sees plenty of opportunities to put money to work in New York’s distressed commercial real-estate market as banks take a breather. Last week she reported on bond investors’ enthusiasm for commercial real-estate investment trusts.

Steve Goldstein surveyed analysts’ opinions about the broad U.S. market for loans secured by commercial properties and apartment buildings. Here’s how much risk they see overall.

For NYCB, the question is whether or not the bank has taken sufficient action to get ahead of the risk in its loan portfolio, which is highly concentrated to CRE and apartment buildings in the New York City area with below-market rents. Here’s a look at regional banks’ loan loss reserve coverage for comparison.

What a court’s rejection of Musk’s massive pay package could mean for other companies

A Delaware judge ruled against Tesla Inc.’s

CEO Elon Musk’s mighty compensation package that the company’s board of directors approved for CEO Elon Musk in 2018. This could have been quite a messy outcome for a shareholder lawsuit, but the Wall Street Journal reported that Musk hadn’t yet exercised the stock options at the heart of that pay package.

At the heart of the matter was the question of how independent Tesla’s board of directors was of Musk’s influence. Therese Poletti explained why the judge’s decision could be a wake-up call for other corporate boards.

Musk has suggested moving Tesla’s headquarters to Texas following the ruling. Here’s why so many companies are based in Delaware and how Musk’s suggested move might not be a great idea.

Meta joins the elite and could change the big tech paradigm for investors

Meta Platforms, which owns Facebook, WhatsApp and Instagram, reported tremendous increases in sales and profits.

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This has been quite a week for Big Tech, with earnings announcements from many key players. Meta Platforms Inc.

made the biggest splash. Emily Bary rounded up analysts’ opinions about Meta, which is expected to see a tremendous benefit from artificial intelligence.

Meta’s shares were up 21% in afternoon trading Friday, following the company’s announcement of fourth-quarter results late on Thursday. Quarterly sales were up 25% from a year earlier to $40.1 billion, while profit tripled to $14 billion, or $5.33 a share. Meta CEO Mark Zuckerberg said during the company’s earnings call that its drive toward efficiency last year, which included mass layoffs, helped it to improve profitability enough to give it the “ability to go through what is a somewhat unpredictable and volatile period over the next five or 10 years.”

What a day for Mark Zuckerberg.

Investors don’t normally associate the largest technology companies with dividend income, but Meta might be setting a new standard. The company will now pay a quarterly dividend of 50 cents a share.

Therese Poletti explained why the dividend might underline a case for Meta to become a component of the Dow Jones Industrial Average
and even inspire other big-tech holdouts to begin their own payouts.

Read: Why you can count on the Dow making changes in February

More coverage of large tech companies’ results and reaction:

Warnings about tech stocks

Michael Brush looked at data that could signal a correction for the stock market (typically defined as a decline of at least 10%), especially for technology stocks.

More market warnings:

Should you try to time the stock market?

There are many ways to throw your money off a financial cliff. One way is not understanding the difference between investing and trading.

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Beth Pinsker writes the Fix my Portfolio column. This week she answered a question from a reader who wishes to leave his brokerage account to his daughters. He is thinking about moving his money out of the stock market into cash, to go back in after the market crashes. Here’s how that might work out, along with sound estate-planning advice.

On the subjects of retirement planning and investing discipline, Paul Merriman highlighted the No. 1 reason investors fail in the long run — three investors share their mistakes and lessons learned.

What to do if you are selling your home and your buyer backs out

You might expect selling a house and buying the next one to be straightforward transactions, but these deals can be tricky.

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In the Big Move column, Aarthi Swaminathan answered an important question from a reader who is facing a difficult scenario. She and her husband are under contract to buy a home, but the buyer for the house they are moving from has backed out. What should they do next?

More housing coverage:

The Moneyist

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When Quentin Fottrell — the Moneyist — answers questions from readers about family, friends and finances, there are times when tough love is in order. Here is an example in which a man sold a house to his wife’s son for a low price, only to see the son enjoy a fat profit later.

More from the Moneyist:

The changing streaming landscape and what to watch this month

In the new episode of the On Watch podcast, Jeremy Owens talks with MarketWatch’s senior tech reporter Jonathan Schwartz about how the streaming industry is evolving, led by Netflix Inc.
Then Andrew Keshner — the Tax Guy — chimes in with thoughts about TurboTax.

Meanwhile, Mike Murphy breaks down pricing (with or without advertisements) for eight streaming services and outlines new offerings on tap this month, led by Max.

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