´´You cannot take -fiscal responsibility- for granted anymore, governments, corporations, private, banks, hedge funds and financial institutions in particular, this is what higher interest rates do´´ >>> magnitude of the moves in rates are insane.. ´´Sep SFR -40, that´s 85 off highs and 100 or so off lows, Monday´s move like 1982 and yesterday like during 2008 period´´
Moody’s cuts outlook on U.S. banking system to negative, citing ‘rapidly deteriorating operating environment’...(and we have the debt ceiling issue coming up, CDS prices, see thresd below) >>> Elizabeth Warren and Katie Porter are reportedly taking the first step in repealing the Trump-era banking law they blamed for Silicon Valley Bank's collapse
U.S CPI came in line (a net acceleration really), combined with HH speech last week, this would have been a clear 50bps next week, but Silicon Valley Bank moment came along and probably change the whole outcome, whether it is for weeks, months or a year >>> FED still 25bps most likely..
KPMG gave Silicon Valley Bank a clean audit report 14 days before it collapsed. It blessed Signature Bank’s books 11 days before. Did they fail overnight or was it a long time coming? Like regulators, KPMG has many questions to answer
Meta cuts 10ß000 jobs again, stock up 6% on the day
UK budget day, give something away to create jobs and not push inflation!
EU natural gas demand fell by 55 bcm in 2022, the largest reduction in its history (equivalent to gas use in >40 million homes). There’s been a lot of debate what the main drivers were (see Thread and IEA report) - good news for inflation
Goldman Sachs was the buyer of the $21 billion portfolio Silicon Valley Bank sold at a loss, which started SVB's collapse - Thread
Markets :
Rates world calming down - in relative terms !
USD not doing a whole lot, risk currencies and JPY moving around with rates
Main equity indexes not doing much either, MUCH more around sectors most dependent on leverage and lower rates... Higher rates is doing the job they are supposed to do, namely look through the good, the bad and the ugly ´´badly run, too concentrated, heavily indebted, too leveraged´´ kind of names..
Crude higher/off lows (chart), a sign that we might get a ´financial recession´ but not a real recession, plenty of jobs openings out there..!! ...IEA's Bosoni: Oil market could quickly shift back to deficit later in year
Credit, credit and credit : JNK, HYG is what it is ALL about, ´´the good, the bad and the ugly´s´´, the uglýs used to bailed out and survived last 10years or more, the risk now, after SVB, is that it is different this time...higher rates are doing what they were intended to do
Triplewitching Friday coming up too
Silicon Valley Bank: the implications for central banks and crypto markets (thearmchairtrader.com) >>> broadly speaking tighter access to funding and higher costs, as many other banks will not be as aggressive as SVB was...
FTAV’s further reading | Financial Times here is the whole list of prominent dudes´ thinking on the subject, Dalio : What I Think About the Silicon Valley Bank Situation | LinkedIn
Warren, Porter Take First Step to Repeal Trump-Era Law Blamed for SVB Collapse (businessinsider.com)
WTI - is it slowly time to get some crude on board ?
