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#14,612
#14,612
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#14,613
#14,613
All banks could face Silicon Valley's fate, but there is a range of "danger". So the number that you quote depends on what the threshold is.

Banks are all highly leveraged. They have to be. They all borrow short (using demand deposits) and then lend long. They all do that. They will all close during a run. They are all holding long term investments that pay less than you can get elsewhere.
 
#14,614
#14,614
Futures are looking slightly positive at this point today and VIX is down 6%; do y'all think it's a genuine calming of the bank jitters, or a bit of a mirage?
 
#14,615
#14,615
When you say "genuine" are you talking crystal ball here? You must be. It always just is what it is in the moment.

In the moment, yes, bank jitters took a valium. No question.
 
#14,616
#14,616
Firebirdparts said:
When you say "genuine" are you talking crystal ball here? You must be. It always just is what it is in the moment.

In the moment, yes, bank jitters took a valium. No question.
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True. I guess I was curious what the folks on the thread think; whether the valium-induced calm will be "transitory" like inflation or if the jitters are going to come and go for the next several months as the Fed ponders what their path will be on rate increases. I see different news articles (sometimes from the same publications) covering a vast range of opinions, so I wanted to get y'alls hit on it.
 
#14,617
#14,617
tbh said:
True. I guess I was curious what the folks on the thread think; whether the valium-induced calm will be "transitory" like inflation or if the jitters are going to come and go for the next several months as the Fed ponders what their path will be on rate increases. I see different news articles (sometimes from the same publications) covering a vast range of opinions, so I wanted to get y'alls hit on it.
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My crystal ball foresees smooth sailing until September. Dow Jones will slowly, but surely, reclimb back to 35,000.

One disclaimer: Someone needs to stick a cork into J-Pow mouth, and provide Uncle Joe with his morning doses of valium.
 
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#14,619
#14,619
Thunder Good-Oil said:
At the end of the article with the attention grabbing headline:

In addition, Silicon Valley Bank had a disproportional share of uninsured funding, with only 1% of banks having higher uninsured leverage, the paper notes. "Combined, losses and uninsured leverage provide incentives for an SVB uninsured depositor run."
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I wonder how many banks are using long-term treasuries paying .5% or around that as reserves? Seems like Powell’s stance on hikes tomorrow could create more anxiety if he commits to raising rates. The other question is how sustainable would higher rates be going forward in light of record deficits and debt? The cost of maintaining the debt would seem to require either rate reductions to enable the Fed to do Operation Twist 2.0 or we’ll have to inflate the debt away. I’m guessing we’ll get the latter and see a new normal or higher inflationary targets. In the history of the Fed, they’ve never successfully hiked interest rates and left them there. Nor have we ever ran such continually large deficits. For these reasons I think metals make a good long-term hedge with asymmetrical return potential vs portfolio holdings.
 
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#14,620
#14,620
UTFanHades said:
I wonder how many banks are using long-term treasuries paying .5% or around that as reserves? Seems like Powell’s stance on hikes tomorrow could create more anxiety if he commits to raising rates. The other question is how sustainable would higher rates be going forward in light of record deficits and debt? The cost of maintaining the debt would seem to require either rate reductions to enable the Fed to do Operation Twist 2.0 or we’ll have to inflate the debt away. I’m guessing we’ll get the latter and see a new normal or higher inflationary targets. In the history of the Fed, they’ve never successfully hiked interest rates and left them there. Nor have we ever ran such continually large deficits. For these reasons I think metals make a good long-term hedge with asymmetrical return potential vs portfolio holdings.
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Banking in the United States. Worse than oil; never touch the stuff. Have a wee bit thru index funds, but not wild about that.

[
 
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#14,621
#14,621
UTFanHades said:
I wonder how many banks are using long-term treasuries paying .5% or around that as reserves? Seems like Powell’s stance on hikes tomorrow could create more anxiety if he commits to raising rates. The other question is how sustainable would higher rates be going forward in light of record deficits and debt? The cost of maintaining the debt would seem to require either rate reductions to enable the Fed to do Operation Twist 2.0 or we’ll have to inflate the debt away. I’m guessing we’ll get the latter and see a new normal or higher inflationary targets. In the history of the Fed, they’ve never successfully hiked interest rates and left them there. Nor have we ever ran such continually large deficits. For these reasons I think metals make a good long-term hedge with asymmetrical return potential vs portfolio holdings.
Click to expand...

Powell is insane if he doesn’t pause for a moment here and give all of this some time to cycle through the economy, especially after the past week and seeing the impact it’s had on bank assets. JMO. Agree on the new normal/higher inflationary targets. There’s no will in DC to reduce the debt either, so I think that’s the case for new inflation targets and the bulk of these rate increases might stick for a long time. Something’s gotta give somewhere along the way and the longer this goes on with the debt and printing money, we’re not going to like what that give looks like. Going to take a big bite out of everybody.
 
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#14,622
#14,622
Vol737 said:
Powell is insane if he doesn’t pause for a moment here and give all of this some time to cycle through the economy, especially after the past week and seeing the impact it’s had on bank assets. JMO. Agree on the new normal/higher inflationary targets. There’s no will in DC to reduce the debt either, so I think that’s the case for new inflation targets and the bulk of these rate increases might stick for a long time. Something’s gotta give somewhere along the way and the longer this goes on with the debt and printing money, we’re not going to like what that give looks like. Going to take a big bite out of everybody.
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I have simply decided that he is insane.
 
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