I have a post on APi Group and Amphenol coming toward the end of the month but before then I wanted to offer some thoughts on Charles Schwab. Nothing here is investment advice. Last week I was joking with my friends LibertyRPF and MBI that Twitter felt like a time machine taking me back to 2008-2009, when as a young associate at Fidelity I was tasked with scrutinizing in gruesome detail the balance sheets of insurers and words like “held-to-maturity (HTM)” and “available-for-sale (AFS)” became fixtures in my daily vocabulary. I never expected HTM and AFS to come back into vogue, but here we are. Everyone reading this likely knows by now what these terms mean, but just in case here’s the
I understand this is not really relevant to the current situation and the near-term performance of SCHW. But for the life of me, I can not understand the BDA agreement - particularly the balances part. So I believe the 'initial end date' is 6/30/2021 at which point the balance was $161.8. So the BDA balances are based on TD client accounts, and Schwab would only use non TD client accounts if the $50 billion min was hit. So essentially there is a band between $161 and $50 billion, anything above can be taken out by Schwab, anything under needs to be added by Schwab, and every year SCHW can take out $10 billion assuming they don't violate lower bound.
Is this the gist?? I know its more complicated with fixed/floating investments, etc. Thank you.