Hedge fund managers and other large investors believe it is far too soon to call an all-clear on turmoil in the global financial sector even after more than a week of financial lifelines, central bank assurances and a massive banking rescue deal
, organized a $30 billion rescue package that was supported by the Federal Reserve and U.S. Treasury.First Republic's ratings for the second time in less than a week, lowering its sovereign credit ratings to "B+" from "BB+". S&P maintained its outlook at "Creditwatch Negative."
Several fund managers said it felt dangerous to bet on further declines in light of the rescue package, noting that retail investors could band together and support banks like First Republic that were seen as solid enterprises. "This name could easily go meme stock, so there is a fear of being short here," one manager said.
Investor Ricky Sandler, who runs hedge fund Eminence Capital LP, speculated on Twitter on Friday that an investment bank might be interested in First Republic, which caters to wealthy clients.Sandler did not respond to a request for additional comment on Sunday. A First Republic spokesman said the bank "is well positioned to manage short-term deposit activity," given last week's deposit infusion, as well as cash on hand., a proxy for banks, tumbled 11.
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