Did U.S banks really think they could keep deposits paying 0% or maybe up to 0.25% interest when bills were paying 4.5%?....this is what really went wrong...no wonder capital flew to MM funds and others...
Did the Saudi Bank want to save CS with 5bn? According to a report, CS major shareholders had submitted a cash injection of $5bn and the Federal Council refused.. >>> worth noting this goes on for 2months, so plenty of legal challenges possible and/or other bid to appear, big could very well be improved by 1-2bn to be honest...but the Swiss authorities will very most likely want this strategic asset to remain within CH
JPMorgan CEO Jamie Dimon Leading Efforts to Craft New First Republic Bank Rescue Plan
Big-bank leaders are discussing a capital infusion in troubled lender
This week the FED is likely to hike 25bps, and so are the BoE, SNB on Thursday. Having said all this, the speed of the hikes last 12months, is now beginning to break a few things in the market, so they may consider banking failures first... but on the other hand inflation is still far too high and had been showing the wrong signals again at the last look....tough call !!
AfD party is ahead of the Greens for 1st time since 2018, acc to an INSA poll for BILD
Farmers-led party set to prosper in key Dutch regional elections
Macron to address Nation ffter Government survives No-confidence vote
WSJ / What Gets Lost When You Rescue Markets. Throwing a lifeline to the financial system in times of crisis can have unintended consequences. Among them: Making the world feel safer can lull people into complacency and excessive risk-taking
Apparently it's the day Trump gets arrested
Asset invested in U.S. money market funds hit a record $5 Trillion this month. $120 Billion of that inflow was last week, the largest weekly increase in 3 years
RBA Meeting Minutes Raise the Prospects of a Near Term Pause
Japanese Prime Minister Fumio Kishida began a surprise visit to Ukraine early on Tuesday, hours after Chinese President Xi Jinping arrived in neighboring Russia for a three-day visit
Markets :
Broad equity markets, NQ mainly, loving the sight of low rates and liquidity injections from Ccentral Banks, usual function reaction. DAX breaking back up, 600pts of yesterday's lows
USD and main FX pairs been fairly quiet in reality, and relative to bond vols (MOVE index), CHF a little softer all week on CS perhaps and a long-term loss of safe-haven, one could think so yes... and in short-term, higher 2y rates should support CROSSJPY's again
Bonds all over the place, though SFR ranges would appear to narrow, as markets recover, rates can also QUICKLY recover higher! 10y CHF hit a 70bps lows yesterday, which was a great opportunity/crazy, when you consider SNB will hike further. Plenty of other examples around, these markets are NUTS, and there should be no surprise if a few CTA's or macro fund are forced to shut down, given the magnitude of these moves
German ten-year is 2.18% after falling below 2% yesterday, it was over 3pct 2-3weeks ago
Crude should start to recover from here
Crypto has certainly been benefiting from this banking crisis
You never read On twitter about 'contagion' being used in positive moves in markets.. but it's also there in days like this (liquidity injection, bank bail-outs etc)
https://s354.podbean.com/pb/793a69fe70631953d7cc071ba48c7594/64196fac/data1/fs56/5709963/uploads/2023_03_20_SaxoMarketCall.pdf?pbss=6b42ae6b-0ece-5b18-83cd-437a5b56562f & https://saxostrats.podbean.com/e/weekend-credit-suisse-deal-unsettles-markets-on-debt-wipeout/ Saxo update
JPMorgan CEO Jamie Dimon Leading Efforts to Craft New First Republic Bank Rescue Plan - WSJ and Holger Zschaepitz on Twitter: "When a falling share price triggers a negative spiral: First Republic Bank’s shares tumbled another 47% to an all-time low after S&P cut its credit rating deeper into junk as executives from major banks discussed fresh efforts to stabilize the lender. FRC is now worth just $2bn. https://t.co/JoQfWTo3nm" / Twitter
Was written early yesterday, so bear with Steen - it's about the macro not micro
Macro Digest: Implications of the UBS takeover of Credit Suisse - This is a 250 billion bond market which was introduced post the GFC to help under-capitalized banks in Europe to reach a sound Tier-1 capital. Its actually called Additional-Tier-1, AT1, in common speech. Tier-1 capital is the highest ranked capital available to offset bad loans or other financial industry stress. Tier 1 is retained earnings, common stock and in many European banks also AT1.
Late 1880' period : Regulation relied more on individual responsibility. Back then, if a bank failed, its officers, directors—and shareholders—would not only suffer market losses on the value of their stock. They also faced double liability, a clawback of up to the par value of their shares, contributing to the reimbursement of depositors
MS.. “This is exactly how bear markets end — an unforeseen catalyst that is obvious in hindsight forces market participants to acknowledge what has been right in front of them the entire time,” Wilson wrote.
The ongoing turmoil in the banking system should lead investors to focus on the deteriorating growth outlook amid restrictive credit conditions, according to Wilson. “The events of the past week mean that credit availability is decreasing for a wide swath of the economy, which may be the catalyst that finally convinces market participants that earnings estimates are too high,” he wrote, adding that the risk of a credit crunch has increased materially.
It's painful for those who lose their jobs clearly, but it's a relatively small amount compared to the amount of people that were hired during 2022/22 period
why not double the bonus for management and board !