Vornado's portfolio is concentrated in the nation's key market , New York City, along with the premier asset in both Chicago and San Francisco ( office real estate..) First Citizens purchase of SVB looks like one of the best deal of our time! >>> '' The ten largest deposit accounts at SVB held $13.3 billion in the aggregate'' no exactly you average deposit size.. China’s economic rebound weaker than expected, warns Maersk . One of world’s largest shipping groups says country’s consumers are still ‘stunned’ by Covid disruptions 70-Year-Old ('''70'''....amazing) T-55 Tanks a re ‘Expendable’ in Ukraine Bitcoin dropped following news of Binance and CEO CZ being sued by the US CFTC over regulatory violation Financial turmoil will not affect Bank of England’s push to curb inflation, says Baile y, ''have to remain very alert if prices stay firm, monetary policy also has to take into account credit conditions, we we do'' Japan Finance Ministry gives rare nudge to BOJ amid bond worrie s. With change in offing, official stresses Kuroda remark on 'dialogue with markets' Inflation in UK shops hits record high with more pain to come, prices in stores jumped by 8.9% in the year to March, chocolate, fruit and vegetables all became more expensive EU reaches deal on service stations for EVs, alternative fuels Israeli Prime Minister Benjamin Netanyahu says he’ll delay a controversial plan to weaken the judiciary following days of unprecedented protests Markets : Crude look to have turned - well off lows - Thread and charts below. ''''Hedge fund sold 1.5x more barrels (part of recent HF unwinding nightmare..) just in 2 weeks than the record SPR did in the entire year. The problem is when funds buy back their shorts, there will be no SPR to offset the buying pressure'''' Bonds still wild, Jun SFR -40bps from Friday highs , May -15, which means market is 50/50 for a May hike again. So 2y UST yields moved from 3.65 lows on Thrusday to nearly 4% now.. #Marchmadness , liquidities atrocious (give size of what these large leverage funds 'need' to turn at time'' ) USDollar remains soft overall, not picking up strength last few days on the back UST moves, ECB staying pretty hawkish, few speakers today again, including Lagarde + BoE'a Bailey SPX500 still around 4K, which is where it was 1month ago, obviously a LOT more going on underneath, massive rotations, financials and so on, 4040 key still - chart below Markets trying to 'breathe' for air, bond vols need to move lower!, looks like we reached the top #marchmadness last week - MOVE index chart below..which will clearly help markets to calm down, banking shares also calming down etc.. Vornado Realty Trust (VNO) Stock Price, News, Quote & History - Yahoo Finance Kind of crash mode, see chart, though if you want to be a contrarian... Japan Finance Ministry gives rare nudge to BOJ amid bond worries - Nikkei Asia Shop prices hit record high in March as inflation “yet to peak” (yahoo.com) Even chocolate! damnit ICE BofAML MOVE Index (^MOVE) Charts, Data & News - Yahoo Finance MOVE index IS key Michael Kao on Twitter: "Musings of the Day, 3/27/23: I've been saying that the epicenter of the next crisis will NOT be in the Banking sector and more likely to be in Shadow Banking. This chart from DB corroborates at least the first part of my postulate: https://t.co/ct1z5q7cW3" / Twitter ''''epicenter of the next crisis will NOT be in the Banking sector and more likely to be in Shadow Banking''' but it's complicated, large-small hit in at various levels, depositors schemes, BTFP, discount window all come into play and who you lend to in the end.. Paulo Macro on Twitter: "Update on oil because it does seem to be getting interesting. While I would have liked to really feel the fear & dejection at $65, it’s fair to say we have come a long way down. In fact in the past few weeks we have seen WTI non-commercial net longs drop to decade+ lows: 1/5 https://t.co/e2tuqhFpBp" / Twitter Turn on Crude prices ? Who will replace Andréa Maechler on the SNB’s board? - SWI swissinfo.ch China’s economic rebound weaker than expected, warns Maersk | Financial Times (ft.com) They should know ? Kwarteng stung: Mini budget chancellor offered to set up meeting between fake firm and Boris Johnson for '£10k' (cityam.com) seriously bent! if there was any doubt out there 70-Year-Old T-55 Tanks Are ‘Expendable’ In Ukraine (forbes.com) An independent Russian newspaper—one of the few left in the country— asked some hard questions about those 70-year-old T-54 and T-55 tanks the Kremlin is pulling out of long-term storage, presumably for front-line use in Ukraine. Binance and CEO Changpeng Zhao sued by CFTC over trading and derivative violations | TechCrunch Stock Markets: First Citizens made a good deal (cnbc.com) Snapped assets at the right time and at the right level (in the panic it's cheaper) >>> One of the best bank deals of our time! shares up 50% yesterday Nick Timiraos on Twitter: "Gruenberg: The ten largest deposit accounts at SVB held $13.3 billion in the aggregate." / Twitter Amateur Australian gold digger finds massive nugget - BBC News Good for him! EU reaches deal on service stations for EVs, alternative fuels | Reuters Lithium miner Liontown soars as it snubs $3.7 bln Albemarle bid | Reuters North and South agree: we have to build HS2 from Euston to Manchester (cityam.com) Israel Latest: Protesters Clash With Police as Netanyahu U-Turns (yahoo.com) #VNO - US commercial real estate REIT's - this is why markets worried about WHICH banks are mostly involved in this sector, there will be plenty of very bad loans in there..

Money market funds swell by more than $286bn as investors pull deposits from banksGoldman Sachs, JPMorgan Chase and Fidelity benefit from big inflows amid turmoil in financial sector >>> Why would anyone deposit and/ leave money in a bank account yielding close to zero...with U.S money markets yielding over 4% ? this is 2023, clients can all act very quickly from their Iphones! no need to queue at the tills to get cash out.. banks only got themselves to blame for not lifting 'deposit rates' higher in recent months..? China’s industrial profits slump deepens on soft demand, high costs.. S&P: Our growth prediction of 5.5% for China this year is higher than the country's aim of roughly 5% and is driven by consumption and services. Jack Ma returns to China in sign of political easing on Alibaba First Citizens Bank to buy SVB 's deposits, loans from FDIC Israel : mass protests after sacking of minister who opposed judicial overhaul Fed' Bullard raised his outlook for how high interest rates should rise by 25bps to 5.625%, “ I would put 80% of probability on the case where financial stress abates ," Bullard said, speaking in St. Louis. " If it doesn't abate, that's a completely different world where financial stress gets more intense, and I would be willing to react to that. ” US bank trouble heralds end of dollar reserve system. Bank crisis not a credit quality problem but stems instead from now-impossible task of financing America’s ever-expanding foreign debt Probability of US Recession Remains Elevated/The Conference board (chart) Finma Chair Accuses Credit Suisse of Lack of Cooperation Bill Gates / The Age of AI has begun . Artificial intelligence is as revolutionary as mobile phones and the Internet Nato condemns 'dangerous' Russian nuclear rhetoric Novartis : Kisqali Breast Cancer Drug Cuts Risk Of Recurrence The recent Iran-Saudi Arabia deal, brokered by China, heralds a reduced role for Switzerland in the region. China’s success in mediating between the two countries has come as a surprise to many France strikes intensify as anger mounts over retirement age hike Markets : No bank failure, some chatters of government interventions late last week, helped SPX500 flirt with 4K area again >>> broad relief in bank shares this morning too, DB and so on, but heading into quarter-end so beware of (lack) of liquidiities, works both ways mind ! #DB Deutsche Bank cheak enough for a trade ? chart below (and-or a few European banks of your choice..) FXland fairly quiet really in majors relative to bonds. CHF remains firm overall Bonds remain wild, few 'leveraged' CTA/Macro fund casualties (see article below), after those incredible moves seen in March #marchmadness ! GOLD tested $2K - profit taking into quarter-end likely it seems Markets will remain a little wild, lack of liquidities ( U.S March payrolls will be on Good Friday..when most markets closed next week ), few days of quietness doesn't mean the horizon is clear. It will take a while to heal Quarter-end focus to dominate market flows this week Probability of US Recession Remains Elevated (conference-board.org) Star-Led Hedge Funds Hit by Steep Losses, Stunting Their Comeback - BNN Bloomberg By contrast, last year’s star performers from Pierre Andurand and Said Haidar to billionaire Chris Rokos were hit by double-digit losses and gave up a large part of their gains in a matter of days. One veteran macro trader, Adam Levinson, erased more than the money he’s ever made since he spun off his Graticule Asia macro hedge fund in 2015. The fund is now shutting down. Money market funds swell by more than $286bn as investors pull deposits from banks | Financial Times (ft.com) Holger Zschaepitz on Twitter: "Deposits at US banks posted biggest decline in nearly a year during week when multiple bank failures triggered the latest bout of global financial turmoil. Bank deposits fell by $98.4bb to $17.5tn in the week ended March 15, acc to Fed data released Friday. (BBG) https://t.co/tkscIdwNYc" / Twitter US bank trouble heralds end of dollar reserve system – Asia Times >>> little bit of a pro Gold article long-term..which many will argue is nothing 'really' new, but still.. Fed's Bullard sees more rate hikes as bank stress abates (msn.com) Novartis gets positive result from breast-cancer drug trial (msn.com) Cannabis trial to start in Switzerland (theswisstimes.ch) One step closer to legalization? Advocates say the move could help Switzerland’s economy and undermine the black market for marijuana in the country China's industrial profits slump deepens on soft demand, high costs (cnbc.com) Israel: mass protests after sacking of minister who opposed judicial overhaul | Israel | The Guardian Tidjane Thiam Prefers to Blame Others (finews.asia) Finma Chair Accuses Credit Suisse of Lack of Cooperation (finews.com) The Old Lady of Threadneedle Street’s not for turning (thearmchairtrader.com) Ukraine war live updates: Latest news on Russia and the war in Ukraine (cnbc.com) The Age of AI has begun | Bill Gates (gatesnotes.com) Switzerland loses two mandates as protecting power - SWI swissinfo.ch Watch: French strikers clash with riot police deployed outside oil depot | Euronews Deutsche Bank - cheap enough for a trade ?

Inflation is still high and US banks need support. Jerome Powell can’t fix one without hurting the other — from here on, and very most likely...? ..and for the first time ever the Fed is going to have to choose.. U.S. Treasury Secretary Janet Yellen sought to reassure jittery investors that American bank deposits were safe and promised policymakers had more firepower to battle any crisis even as bank stocks resumed their slide on Thursday >>> Run into US money mkt funds continues. Assets rose by another $117bn in past week to hit ATH Biden’s approval rating falls again amid concerns about economy, Poll Finds >>> TikTok ban would be 'a slap in the face' to young Democratic voters, activists warn Financial turmoil complicates central banks’ focus on inflation. Some former monetary policymakers fear narrow focus on damping price pressures could exacerbate panic Hindenburg strikes agai n, the new Adani is Block UK consumer mood hits one-year high, but financial gloom persists Markets were caught by surprise by Credit Suisse's multi-billion dollar AT1 bond write-off. Banks sound off on the future of the asset class, especially in Asia FOMC, BoE, SNB and Norges Bank all raised 25bps, as expected >>> from here on, the market thinks maybe another 1 hike in some places, a pause, and eventually a cut or 2 in 2024, this assuming inflation moderate back down towards say 4pct towards year-end The Fed has outsourced monetary policy and lost control of the economy, former White House advisor says, Gary Cohn not mincing his words Archegos founder Hwang must face fraud charges, US judge says French protesters vent fury at Macron over pension push UK and EU to seal Northern Ireland Brexit deal - a bit late, but getting there finally ! Gundlach says he forecasts the FOMC will cut rates, substantially, soon (he doesn't think financials calm down..) Markets : FXland, when it's about credit risk, JPY will surge, GOLD not far behind and CHF 2yUST 3.70% - absolutely unreal. .. not too long ago it was 5% Equity markets, banks much in focus clearly, SPX500 : sell ripps and rallies to put on some hedgies , NQ does well on lower rates, but funding will become more expansive and this many will chose equity issuance going forward, be careful out there IMHO : I could foresee a Fed cutting 150bps one day on financial stability risk, thus forgetting about inflation for a bit (GOLD would fly, and so would JPY..), or continue to stay stubborn on inflation and hope banking issues ease off after quarter-end, anything goes . The unbearable tightness of bank funding | Saxo Market Call (podbean.com) well worth a listen! and few charts to back it all up PowerPoint Presentation (podbean.com) What went right this week: how the world got kinder, and more good news - Positive News Janet Yellen on Wednesday : Not considering any new insurance to back up bank deposits beyond the current $250k limit Janet Yellen yesterday : The strong actions we have taken ensure that Americans’ deposits are safe >>>> no wonder investors/markets are confused and thus more volatile..! and if you were to guaranty all deposits, you socialise the entire system, and then politicians will be in charge ! be careful what you wish for . The MOST obvious and would be MOST popular is for banks to pay decent deposit rates!! that way investors will be more stable, but then banks will be less profitable.. (many US banks, almost all, including JP etc paying near enough to nothing on short-term deposit, when UST 2y is 4% , was 5% not long ago The Fed Has Outsourced Monetary Policy and Lost Control of the Economy (businessinsider.com) The Fed's balance sheet increasing $392 billion over the last 2 weeks, the largest 2-week spike higher since April 2020. Thus over 60% of the Quantitative Tightening since last April has been undone ... in just two weeks. Banks Sound Off on AT1 Outlook (finews.asia) Finma Defends Credit Suisse CoCo Bond Wipeout (finews.asia) Financial turmoil complicates central banks’ focus on inflation | Financial Times (ft.com) “This is not the ECB in 2008,” says AdamPosen , referring to the now-infamous ECB decision to raise interest rates ahead of the collapse of Lehman Brothers. Both the Fed & BoE should raise rates or risk entrenching “the inflationary dynamics." Holger Zschaepitz on Twitter: "WTF? Costs of insuring against Deutsche Bank default (CDS prices) jump in violent move while share price plunge as stress in banking system keeps rising following Fed rate hike. https://t.co/yt56WL1df9" / Twitter Deffner & Zschäpitz: Wirtschaftspodcast von WELT: Wer hat Schuld am Bankenbeben? auf Apple Podcasts ‘Democracy at stake’: French protesters vent fury at Macron over pension push (france24.com) Macron doing what he said he was going to do, reform France...now French people unhappy - good grief, what a nightmare, across France! Top regulator eyes tighter rules for global financial system | Financial Times (ft.com) Biden’s Approval Rating Falls Again Amid Concerns About Economy, Poll Finds (forbes.com) TikTok ban would be 'a slap in the face' to young Democratic voters, activists warn (nbcnews.com) Hindenburg accuses Block, Jack Dorsey's tech company, of fraud (qz.com) DUP has not come to terms with Brexit deal support, says Heaton-Harris - BBC News Dan Snow on Twitter: "My eagle eyed wife compiled a short highlights sizzle. https://t.co/xkdqgTegu5" / Twitter this is brilliant :-) UK and EU to seal Northern Ireland Windsor Framework deal - BBC News Crypto founder Do Kwon indicted in US following Montenegro arrest | Reuters Tim Martin's JD Wetherspoon blames 'ferocious' inflation for profits plummeting 91 per cent JD Wetherspoon: 'Ferocious' inflation sends profits down 90.9 per cent (cityam.com) Sure is tough out there ! good grief TikTok CEO Shou Zi Chew's Congress showdown: Five takeaways - BBC News Estonia says China's plan to end Ukraine's war 'extremely unfair' (cnbc.com) USDCHF - clearly not a good price action lately - must hold this .9100/50 area for the bulls, EURCHF struggling to clear par - GBPCHF need a BIG 1.15+ to change the negative trend of last many years..

Treasury Secretary Janet Yellen is not considering any plans to guarantee all bank deposits without congressional approval following the collapse of Silicon Valley Bank and Signature Bank, she told senators >> this is what did the damage into the close yesterday..not Powell FOMC +25bps, as expected, stuck between a rock and a hard place >> inflation still too high clearly, but financial conditions matter. SNB hiked 50bps this morning (they only meet quarterly), BoE should do 25bps minimum and Norway add 25bps too Powell : small difference there, slowly peaking maybe, "ongoing increases" to "some additional policy firming may be appropriate", though the dots Switzerland’s central bank raised its key interest rate by a half-percentage point and said the country’s bank crisis had ended CITI: “This was the first week of [Citi credit card] data following the disruption within the financial sector, and we were curious if it might have had an impact on the consumer. It sure did. .. biggest decline in total retail spending .. since the pandemic began (April 2020).” PacWest Bank seems to be the next one in the news - 20% of deposits withdrawn since January Rishi Sunak hails Windsor Framework vote as 'a good deal for Northern Ireland' WSJ: "Credit Suisse customers kept pulling deposits Thursday. Authorities moved to make more than $150 billion in additional liquidity available to the bank, Ms. Keller-Sutter, the finance minister, said" - that's not a small sum ! BlackRock took $5B out of its ESG etf, another bubbly thematic investment idea not working ECB's job not yet done, bank must be bold and decisive. Inflation projections contain upside risks, wages may rise more strongly than assumed "'A bull market is like sex. It feels best just before it ends." - Warren Buffett Nestlé says less than half of its mainstream food and drinks are considered ‘healthy’, good grief the negative swiss news keep on coming The SEC issued crypto exchange Coinbase a Wells notice, warning the exchange that it identified potential violations of U.S. securities law Markets : CHF . there is a definite risk we will look back in 12-18months and this was the top of CHF strength - happy to have chat about it - let me know USD softened again with lower UST yields, GOLD testing 2K again ( more capital flows our of regional banks will strengthen #JPY and #XAU...) Headwinds in the U.S economy on teh back of 'financial stress' will be deflationary over time! All bout credi t and U.S regional banks, #IAT etf is one you can follow, sentiment shifting slowly to 'sell the rallies', as/if/when regionals weaken Credit Suisse fallout threatens to halt issuance of risky bank debt (msn.com) Swiss Central Bank Lifts Key Rate, Declares End to Bank Crisis - WSJ 'Blanket insurance' of bank deposits is not being discussed, Yellen tells senators (msn.com) Nestlé says less than half of its mainstream food and drinks are considered ‘healthy’ | Financial Times (ft.com) Hedge Fund Manager Odey Bets on UBS Following Credit Suisse Deal - Bloomberg He's not alone! as discussed sunday night ! The ECB's Nagel delivers some bold words | Forexlive Coinbase warned by SEC of potential securities charges (cnbc.com) Art Basel Launches in Hong Kong This Week (finews.asia) If boring Switzerland can’t save its banks, who can? – POLITICO OK for the record Switzerland is not boring ! Patek Watch Fetches Record Price at Online Auction (finews.asia) Rishi Sunak hails Windsor Framework vote as 'a good deal for Northern Ireland' (msn.com) Boris Johnson claimed No 10 party was for official who didn’t leave until month later | The Independent Tories fear if Johnson is suspended over Partygate then Uxbridge could be lost in byelection – UK politics live (theguardian.com) There will be a lot of deals similar to these Rival brokers FinnCap and Cenkos Securities merge to make City's largest mid-tier investment bank (cityam.com) Bill Gates says AI will give everyone a personal assistant | Fortune usually these things get overhyped initially...got to agree with Bill there ! U.S regional banks ETF - there are many others - but clearly key for credit, gold, jpy and general risk at the moment

Powell to go financial stability or inflation ?...25bps pretty much priced in, very tricky presser. " This will be Powell's trickiest press conference yet . Either there is exogenous financial conditions tightening that the Fed leans against, or if the Fed keeps going, they have to be ready for a less stable financial system as a result." >>> d oes 25bps one way or another really matter ? probably not - all about CREDIT "The press is full of angry fund managers saying that the Swiss Government has mucked around with the order of creditors ... AT1 Bonds: (NOT all AT1 are the same, EU confirmed it early doors... hence risk-on since Monday) >>> it was in the main document, not even in the small print, see below ! “The Write-down may occur even if … ordinary shares of CSG remain outstanding”, the fund managers involved did not read the document, they made a mistake, plain and simple ? >>> CS bond holders preparing a lawsuit though it seems - lawyers dream land.. Electric Vehicle Battery Makers Test a Future Without Lithium . A test vehicle unveiled by Chinese carmaker JAC has the battery world buzzing about sodium-ion cells WSJ-Vladimir Putin and Xi Jinping have been cementing a decade-long bond, described by some analysts as a “strategic bromance” UK Annual inflation rates rise again following the easing in Jan 2023: Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 9.2% in the 12 months to Feb 2023, up from 8.8% in Jan 2022 CPI rose by 10.4%, up from 10.1% >>> more than sticky this inflation! It is Boris Johnson day for the Conservative Party, as he defends himself in the Privileges Cttee against the charge of recklessly lying to parliament and also votes against Rishi Sunak’s treasured compromise with the EU to fix Brexit arrangements for Northern Ireland UBS shares erase almost all of the losses made during the recent banking rout - quite clearly was the deal of the century for UBS... Swiss gold exports In February, gold exports to China reached 58 tons, valued at $3.5 billion, up from January's 26.1 tons In February, gold exports to India reached 25.6 tons, an increase from January's 3.2 tons Bundesbank chief says rate-setters must be ‘more stubborn’ in inflation fight Markets : Overall Eq markets been in recovery mode since UBS/CS take over, realization that not all AT1 bonds are the same and expectations that FED will go easy today on the dots / presser #Gold a little softer, #WTI crude a little higher for the same reasons FX land more about higher CROSSJPY's as rates correct higher from Monday morning lows All about Powell and #FOMC now - good luck with it - he won't be able to satisfy everyone.. wouldn't want to be in his shoes Catch 22 for the FOMC: market leans for a hike, but... | Saxo Market Call (podbean.com) and PowerPoint Presentation (podbean.com) Financial or Price Stability? - Bloomberg From Bank of America's Global Fund Manager Survey.. Question: What do you consider the biggest ‘tail risk’? 31% of global investors see a systemic credit event as the biggest risk for markets , up from only 8% last month and knocking inflation concerns (25%, down from 40%) off the first spot for the first time in nine months Recession risk is rising: BofA (yahoo.com) From JP Morgan: A recession seems to be a certainty given the banking crisis and the expectation for additional “unknown unknowns” to emerge. Combined, this feels like another bear market rally rather than the beginning of a new bull market Credit Suisse promises to pay bonuses to staff despite UBS rescue | Financial Times (ft.com) Folgen der Credit-Suisse-Übernahme: CS-Anleihenbesitzer sind frustriert: Anwälte bereiten Sammelklage vor | Tages-Anzeiger (tagesanzeiger.ch) -- They changed the law & basically stole 16 Bln francs worth of bonds." did they? Samantha LaDuc on Twitter: "Per @RJRCapital: Ackman’s $3B in losses can motivate one to call for a Fed pivot. But more deflation is needed first. And as I’ve shown clients, there is a credit event risk brewing Q2 - which is more likely to trigger Fed to actually pivot." / Twitter AT1 Bonds: when to abandon your fund manager (substack.com) excellent write-up - Furthermore, any Write-down will be irrevocable and, upon the occurrence of a Write-down, Holders will not (i) receive any shares or other participation rights in CSG or be entitled to any other participation in the upside potential of any equity or debt securities issued by CSG or any other member of the Group, or (ii) be entitled to any write-up or any other compensation in the event of a potential recovery of CSG or any other member of the Group or any subsequent change in the CET1 Ratio, Higher Trigger Capital Ratio or financial condition thereof. The Write-down may occur even if existing preference shares, participation certificates and ordinary shares of CSG remain outstanding. "Although the market for CoCos has yet to develop, we think the extended time horizon for implementation will enable these instruments to emerge over time. We also believe that Credit Suisse will be an attractive issuer of these new securities." Brady Dougan, Sept 2010 But of course they will try Credit Suisse bondholders prepare lawsuit after AT1 bond writedown in UBS deal (cnbc.com) Right thing to do, if they want to avoid a run into MM funds etc !! Australian banks finally passing on interest rate hikes to savers – but there’s a catch | Interest rates | The Guardian Smart savers are cashing in on higher CD rates right now (msn.com) According to Bankrate , the national average yield for savings accounts is 0.23 percent APY for the week of March 15. Many online banks have savings rates higher than the national average, though. >>>> quite ridiculous really The lithium bubble is bursting - chart - Lithium - 2023 Data - 2017-2022 Historical - 2024 Forecast - Price - Quote - Chart (tradingeconomics.com) Electric Vehicle Battery Makers Test a Future Without Lithium - Bloomberg Xi and Putin Rekindle ‘Strategic Bromance’ in Russia - WSJ Putin will be arrested if he comes to Ireland, Department of Justice says – The Irish Times That's going to be fun ! Boris Johnson hearing live: Dominic Cummings says ex-PM knew garden event was drinks party 'because I told him' - new evidence as he prepares to face MPs | Politics News | Sky News UK inflation leaps to 10.4 per cent smashing forecasts (cityam.com) UBS shareholders happy...as mentioned early Monday, it was the deal of the century.. #UBS

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 Saudi National Bank wollte Credit Suisse retten: Bundesrat lehnte ab - 20 Minuten How the Swiss ‘trinity’ forced UBS to save Credit Suisse - SWI swissinfo.ch 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 7 March 2023 | Minutes of the Monetary Policy Meeting of the Board | RBA Macro Digest: Implications of the UBS takeover of Credit Suisse. | Saxo Group (home.saxo) 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 speec h. 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. What Gets Lost When You Rescue Markets - WSJ 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. Holger Zschaepitz on Twitter: "Good Morning from #Germany where right-wing populist AfD party is ahead of the Greens for 1st time since 2018, acc to an INSA poll for BILD. Greens have fallen out of favor w/voters b/c of compulsory installation of heat pumps, which will apply from 2024 & be costly for Germans. https://t.co/jAbDwTMR2c" / Twitter Farmers-led party set to prosper in key Dutch regional elections | Netherlands | The Guardian Vladimir Putin wanted by International Criminal Court - Kremlin calls move 'outrageous and unacceptable' | World News | Sky News The Telegraph on Twitter: "🇯🇵 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 Follow our live blog for the latest updates ⤵️" / Twitter France pension reform: Macron's government survives no-confidence vote - BBC News Amazon layoffs: Company to cut 9,000 more workers (cnbc.com) 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 Trump Tries To Block Georgia Election Investigation As Criminal Charges Loom (forbes.com) Credit Suisse set to pay bonuses and boost salaries despite UBS takeover (cityam.com) why not double the bonus for management and board ! Fate of First Republic Uncertain as Shares Plummet Again - The New York Times (nytimes.com)

-FED priced 50/50 on 25bps, ie 13bps -Asian Markets were flat ish up to 2 hours ago or so -Rates all over already early this morning, SFR +30 suddenly -Bank credit in the open now.. -The Fed made joint announcement with BOE, ECB, BOC, BOJ and SNB to increase frequency of USD swap lines from weekly to daily. -China delivered a 25bps cut in RRR starting 17Mar, Xi to visit Russia -There will be question as to why shareholders get some and AT1 bond holders don’t..!! hierarchy etc etc .. more about it here : It is all about credit, particularly from here on. Polemic Paine on Twitter: "So UBS have, once guarantees and write downs are considered ($17bln AT1s at zero) bought CS for minus 15bln and been handed a free 9bln put option on top Deal of the century." / Twitter Federal Reserve Board - Coordinated central bank action to enhance the provision of U.S. dollar liquidity And final CUBS deal it’s not a merger clearly .. more like a botched rescue (Bloomberg) -- UBS Group AG agreed to buy Credit Suisse Group AG in a government-brokered emergency rescue announced on Sunday. Under the terms of the deal, Credit Suisse shareholders will receive 1 UBS share for every 22.48 Credit Suisse shares held, equivalent to CHF0.76/share for a total consideration of CHF3 billion, UBS said in a statement  The price represents a 59% discount to Credit Suisse’s closing price on Friday, according to Bloomberg calculations The takeover will create a global wealth manager with $5 trillion of invested assets across the group Both banks can obtain a liquidity assistance loan with privileged creditor status in bankruptcy for a total amount of up to CHF100 billion UBS is to get CHF25 billion downside protection from the transaction to support marks, purchase price adjustments and restructuring costs, and additional 50% downside protection on non-core assets Colm Kelleher will be chairman and Ralph Hamers will be CEO of the combined entity The combination is expected to generate annual run-rate of cost reductions of more than $8 billion by 2027 UBS remains “strongly capitalized well above our target of 13%” and is committed to progressive cash dividend policy The Federal Council has established bankruptcy privilege rights for this additional liquidity assistance, which gives the SNB the necessary assurance to make available to Credit Suisse substantial additional liquidity The extraordinary government support will trigger a complete write-down of the nominal value of all AT1 shares of Credit Suisse in the amount of around CHF16 billion, and thus an increase in core capital The takeover will result in a larger bank, for which the current regulations require higher capital buffers Swiss regulator FINMA will grant appropriate transitional periods for these to be built up FINMA will very closely monitor the transaction and compliance with all requirements under supervisory law FINMA will coordinate continuously with national and international authorities in this regard, namely the US Federal Reserve and the British Prudential Regulatory Authority To ensure that all obligations can continue to be met at all times throughout the transaction, further liquidity assistance will be assured This means that the banks involved will have substantial additional liquidity available to carry out the takeover The liquidity provided by the SNB will include a loan covered by a federal guarantee

Quadruple witching day - can get some funky vol during day ECB hiked 50bps, stayed the course , confirmed/displayed strength/confidence in EZ banking system, data dependent (and they only should be..), get over the current bump in markets and continue course of hiking, however if problem persists we are on hold... BofA, JPMorgan lead bank group to infuse First Republic with $30B in deposit >>> so depositors take money out of small banks to put into big banks, big banks puts money back into small banks. .(big banks too big to fail..)...madness really - see Yellen interview below , market shuffling deposits to where liquidity is needed Macron’s defiant show of force in parliament exposes a weakened president FedEx jumped after hours , smashing earning forecasts Deal! NHS unions strike pay pact with ministers after months of UK strikes, Teachers unions also having more serious talks with Govt Volkswagen to invest in mines in bid to become global battery supplier China's Xi to visit Russia next week Markets : FED action, let's be clear, technically this is not QE, FED is not buying assets per say, other banks are borrowing funds pledging collateral (same for CS and SNB..) >>> all of which gave some air yesterday to markets, NQ recovered, CS recovered although trading back below 2CHF again, JPY and CHF weakened etc, but all this should not stop FED from hiking 25bps next week (priced) or even 50bps Equity markets, main indexes pretty dull, big rotations, recession calls vs utilities, and NQ rallies on lower rates. But let's sit back, I read headlines such as ''stocks rising in the midst of a banking crisis'.. in many ways it's about liquidity is the wrong places/issues, but beware, things can turn quickly Crude jumps back a few pct in sympathy with the above FX land, CROSSJPY's initially decently lower, EURJPY hit a 139.25 low yesterday, bouncing back to 142+ this morning, so decent moves in crosses, CHF a smidge weaker too. GBPCHF long-term? BOND 'settling' a little, rates VOL lower, helping the whole risk complex settle too >>> bond, rates VOL THE key.. Again high vols create great opportunities to enter into 'desired' position, we have purchased a few stocks this week for our clients that came to our levels, for this though we need 'room' to step in, use those 'deleveraging dips from other participants' to enter into new positions Market sees a glass that is half full of liquidity for now. | Saxo Market Call (podbean.com) BofA, JPMorgan lead bank group to infuse First Republic with $30B in deposits (msn.com) What's happening with First Republic Bank after SVB collapsed (qz.com) Lisa Abramowicz on Twitter: "Did quantitative tightening just end? The Fed’s balance sheet grew by about $300 billion in the past week as the U.S. sought to backstop deposits at regional banks. https://t.co/rDYuLzqmTm" / Twitter Senator from Oklahoma asks Yellen asks if deposits in his community banks are all insured - they are seeing outflows to big banks. Yellen basically says sorry - you ain't part of the club! LIVE: Treasury Secretary Yellen testifies before the Senate on Biden's 2024 budget — 3/16/23 - YouTube French Senate adopts contested pension reform, final vote set for lower house (france24.com) - Macron’s defiant show of force in parliament exposes a weakened president – POLITICO if you think UK parliament is fun watch this : French MPs sing Marseillaise and boo as PM forces through pension reform bill - YouTube FedEx optimistic after 3Q earnings, but more cost-cutting measures on the way (yahoo.com) Tiger Global Writes Down Venture Funds’ Bets by 33% in 2022 - WSJ Credit Suisse sued by US shareholders over finances, controls | Reuters tmnxeq on Twitter: "swiss news outlet claims CS tweaked their CET1 in 3Q22 to remain solvent; finma & snb approved change" / Twitter Seven ways in which Credit Suisse isn’t SVB | Financial Times (ft.com) agreed - however, the issue is its fundamental business, and how one can operate with so much debt!! (ever checked the annual report?..) >>> and those thinking UBS and CS should merge, have those people ever asked UBS management and major shareholders ? major restructuring is required, has been for 10years... get rid of IB business, reduce worldwide bizz to wealth management, focus on wealth management, reduce staff drastically in CH too, reduce amount of branches dramatically, sell some to cantonal banks and/or Raiffeisen group etc Deal! NHS unions strike pay pact with ministers after months of UK strikes – POLITICO Teaching unions and government to hold ‘intensive talks’ after strikes | The Independent Volkswagen to invest in mines in bid to become global battery supplier | Reuters Peter Stefanovic on Twitter: "Wow. After introducing his guest as “a particularly distinguished professor of economics at Kings college London” Jacob Rees-Mogg squirms as he’s told some hard truths about the damage of Brexit. Watch in disbelief at what comes next https://t.co/YIgvFptOeh" / Twitter DUP leader tells Chuck Schumer to 'read a history book' as Brexit jostling continues in Washington | World News | Sky News More Democrats sympathize with Palestinians than Israelis for first time: Gallup | The Hill Western allies must ‘act faster’ on weapons, says Ukraine | Evening Standard At Virgin Orbit, it never should’ve come to a staff furlough | TechCrunch when financing is plenty and funding is at zero it all made sense Michael Pettis on Twitter: "1/2 "China is likely to work on smaller, less risky and more profitable trade-linked infrastructure projects overseas in the coming years after a number of larger ones under the Belt and Road Initiative encountered financial problems." https://t.co/5MRcRXdJYb via @scmpnews" / Twitter Five years into the trade war, China continues its slow decoupling from US exports | PIIE GBPCHF - forget about the next 3-5pct - the point here is....for the right reasons (Brexit), GBP has been hammered. There are a few positives to look for long-term and CHF could lose its safe heaven statis (partly) due to CS ?.. 'swissmade' status could be weakened have a wonderful Friday and week-end Team PVM

Credit Suisse is taking decisive action to pre-emptively strengthen its liquidity by intending to exercise its option to borrow from the Swiss National Bank (SNB) up to CHF 50 billion under a Covered Loan Facility as well as a short-term liquidity facility, which are fully collateralized by high quality assets. Credit Suisse also announces offers by Credit Suisse International to repurchase certain OpCo senior debt securities for cash of up to approximately CHF 3 billion ECB decision time, will SVB and CS news change anything to the most likely 25bps ? market pricing sees about 50% chance of 50bps, plenty of rumors going around that the ECB should chicken out today despite core inflation trending over 5.5% because of the banking stress European regulators criticise US ‘incompetence’ over Silicon Valley Bank collapse-FT JPMorgan Says Fed’s Loans Will Provide $2 Trillion of Liquidity Top Japanese manufacturers agree to big wage hikes amid inflation Hydrogen will be bigger than the Industrial Revolution. Clean, green fuel for all sounds too good to be true, but this entrepreneur’s new airship could make the hydrogen economy a reality Iran has agreed to halt covert weapons shipments to its Houthi allies in Yemen as part of a China-brokered deal to re-establish diplomatic relations with Saudi Arabia, U.S. and Saudi officials said New EIA Report Reveals Massive Downward Reductions In US Shale Oil Output Markets : Crude WTI 68$ - recession calls increasing - you could argue (I will..) that it is very welcome news for consumers and inflation ! Rates, SOFR madness has to calm down first, for rest of markets to calm down GOLD making new highs vs major currencies Equity markets short cover of headline news like CS 'lifeline' last night, and/or other liquidity injections, stick to quality still, no need to be too brave in these volatile times, but these markets bring new opportunities! USD not doing too much, CHF weakened fairly sharply on the day yesterday, maybe a CS related move ? let's see. In relative terms to rates market, FX, major equity indices pretty ''quiet'', but beware if they awaken (and become as volatile as rates - clearly won't be welcome sign) 20230315 mm statement.pdf SNB statement on CS Credit Suisse Group takes decisive action to pre-emptively strengthen liquidity and announces public tender offers for debt securities (credit-suisse.com) Market turmoil tests ECB rate hike appetite (yahoo.com) Holger Zschaepitz on Twitter: "In at least one respect, we are witnessing the re-emergence of 2008. The MOVE Index, which tracks implied volatility in US Treasury yields, has reached December 2018 levels. https://t.co/qZvGfigEqP" / Twitter Warren says $250,000 cap in deposit insurance for banks should be reexamined | The Hill Guaranty all deposit ? ok , but then it's all but nationalized...would have some big impact on share prices over time European regulators criticise US ‘incompetence’ over Silicon Valley Bank collapse | Financial Times (ft.com) JPMorgan Says Fed’s Loans Will Provide $2 Trillion of Liquidity - Bloomberg SVB collapse may be start of ‘slow rolling crisis’, warns BlackRock boss | Silicon Valley Bank | The Guardian Goldman Sachs bought the SVB bonds whose $1.8 billion loss set off the startup lender's meltdown (yahoo.com) GS..had to be How Switzerland’s once-feted banking industry became a national embarrassment (yahoo.com) Stripe raises $6.5 billion at sharply reduced $50 billion valuation (cnbc.com) Top Japanese manufacturers agree to big wage hikes amid inflation - Nikkei Asia Best of Bitcoin’s Latest Rally Is Over. Watch This Key Level for the Next Move. | Barron's (barrons.com) Rinaldo Brutoco - Financial Times - Partner Content by Withers (ft.com) UK budget worth extra £320m to Scotland, Hunt says - BBC News For Chancellor of the Exchequer Jeremy Hunt, the conditions are ripe to deploy fiscal drag, allowing the government to extract more revenue from taxes without a single policy change. The stealth tax hike comes into play when thresholds are frozen but pay goes up, pushing more people into higher tax bands. While the use of fiscal drag is hardly unique to this government, it will have a much bigger impact this year as inflation runs near its highest level in 40 years and employers raise compensation to help their staff battle spiraling costs Iran Agrees to Stop Arming Houthis in Yemen as Part of Pact With Saudi Arabia - WSJ Oil Traders Ignore EIA Data And Focus On Banking Crisis (fxempire.com) XAU vs EUR making new highs very similar vs most major currencies

´´ 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 Global Market Quick Take: Europe – March 15, 2023 | Saxo Group (home.saxo) US stocks rise as bank shares rebound and CPI shows inflation continues to cool (yahoo.com) Moody’s cuts outlook on U.S. banking system to negative (nbcnews.com) Holger Zschaepitz on Twitter: "Cost of insuring against US default (CDS Price) has jumped due to debt ceiling stand-off and bank bailouts BUT market-implied probability of default w/3.5% is way lower today than in former episodes – particularly the summer of 2011, or autumn of 2013, https://t.co/3XFBreQ2OW" / Twitter KPMG Gave SVB, Signature Bank Clean Bill of Health Weeks Before Collapse - WSJ 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 Genevieve Roch-Decter, CFA on Twitter: "BREAKING: Goldman Sachs was the buyer of the $21 billion portfolio Silicon Valley Bank sold at a loss, which started SVB's collapse https://t.co/JsnBZbz3bZ" / Twitter Robinhood Users Say The Trading App Won’t Cash In Their Profitable Bets Against Silicon Valley Bank (forbes.com) Meta's big job cuts aren't about the tricky economy or rising inflation. They're about Mark Zuckerberg's mistakes. (yahoo.com) A Russian warplane struck a US drone over the Black Sea (qz.com) Warren, Porter Take First Step to Repeal Trump-Era Law Blamed for SVB Collapse (businessinsider.com) Chancellor set to deliver ‘back-to-work’ Budget amid push for growth | The Independent France faces fresh round of strikes over highly contested pension reforms (france24.com) Volkswagen to make electric vehicle batteries in Canada – DW – 03/13/2023 How Switzerland’s once-feted banking industry became a national embarrassment (msn.com) Charity: Swiss support of Ukrainian refugees fading (theswisstimes.ch) Peter Zeniewski on Twitter: "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, and so today the @IEA released a commentary exploring how all this happened. Quick thread. https://t.co/1LqRpWKVHi" / Twitter WTI - is it slowly time to get some crude on board ?

FED have now 'broken' a few things with their powerful hiking cycle , will they show signs of pausing/easing off on hiking.. (Crypto, coins, LDI, housing, commercial REIT's, leveraged/weak balance-sheets, VC space now etc), IMHO they still do 25bps , definitely not 50bps, but honestly anything goes.. Today is U.S CPI >>> Doubleline’s Gunlach: The Fed will hike next week in order to save their credibility but shouldn’t, Barclays no hike next week and Nomura goes for a cut next week and Fed to stop QT...anything goes, FED caught between a rock and a hard place (should still hike on Inflation vs financial conditions perhaps calling to stop or cut potentially..) >>> The events over the last three trading days is “expansionary” in monetary sense -ie, printinting money, likely stopping QT and Terminal rates were probably for this mini-cycle reached/Saxo-Steen Moral hazard :... if you are/were a small financial institution/bank, you can/could take as much risk to boost your share price 15years, forget about hedging anything, if (when..) it goes wrong, they get a bailout... >>> all this goes all the way back to the LTCM days, the system should have never bailed them out...it allowed too many institutions to not care much about anything, as Central Banks and Governments would be here to bail them out eventually >>> the fastest rate hike cycle ever, is forcing the issue with too lightly/non-regulated, too concentrated businesses and weak/leverage balance-sheet balance-sheets FT-How could regulators have missed the risks at Silicon Valley Bank? that IS the question.. Pfizer has agreed to pay USD 43 billion for biotech Seagen and its pioneering class of targeted cancer drugs, The Wall Street Journal reported Credit Suisse said it had identified “material weaknesses” in its internal controls over financial reporting , the latest blow to a bank battling to revive its fortunes A deal to restart Ukraine grain exports will be signed today. Ukraine, Russia, Turkey, and the UN have arrived to an agreement that will free up 20 million tons of grain trapped in Odessa Quantitative easing apparently is re-accelerating: The BoJ revealed on Monday evening that it had stepped into the Tokyo equity market for the first time since early December 2022, buying $5.2bn worth of exchange traded funds GS-Blankfein : A few banks may have issues like SVB, but only a few/thread below Markets : UST 2year yields down to 4%, a full 1% below last week's levels, just an incredibly HUGE rates move, broken every records, and not just in the U.S >>> Historic moves in the bond markets y'day, biggest decline in 2Y UST yields since 1982 (-60bps).... and the biggest decline in the 2Y German bond yields since 1990 (-40bps).... Swiss even bigger & wilder GOLD naturally does well in these conditions, rates, QE, credit risks etc Equity markets actually pretty stable, all things considered, few NASDAQ names liked lower rates yesterday, though internally, moves(swings were huge, depending on quality of names/balance-sheets/credit etc....as it should, it's not all good or all bad anymore...! Main indexes in the U.S stable, Europe readjusted 2% lower (was still near recent cycle highs) BTC loved the Fed action (QE) Stuff happening very fast these days, no queue outside forming at banks to take cash out, it's all done in few minutes/hours on the phone...on the back of a few tweets.. FX been remarkably stable really, a few crowded trade like long MXN, long CROSSJPY's and GBPCHF (briefly sub 1.10) came under pressure last few days. EURCHF down a little too, CHF, JPY and Gold always do well during these kind of periods.. Could the move in JGB's (now back to 28bps!), revive a little bit of a weaker JPY scenario (or...might be a perfect time for the BoJ to abandon YCC with JPN sovereign curve out to the 10yr trading comfortably below the 50bp cap... Specs short-squeezed (JGB's and JPY) after last week's meeting Risk and equity rallied/held well, on lower rates/QE, but from here on, the real driver is and will remain credit, this is the most important thing in days, weeks and months ahead, it is all about CREDIT, like in 2009 period, equity do not necessarily need to go down big, but in credit and macro definitely ! so much more about specifics https://saxostrats.podbean.com/e/careening-toward-a-credit-crunch/ and https://s356.podbean.com/pb/3fd05f2ec7da1793121b243156ee3fbc/64103cf0/data1/fs56/5709963/uploads/2023_03_14_SaxoMarketCall.pdf?pbss=13cf189c-4657-59a8-a15e-f60c4e634e94 .. Historical moves in 2y bonds (not just US..) - well worth a listen Lloyd Blankfein on Twitter: "A few banks may have issues like SVB, but only a few. Govt actions removed reasons for bank runs. Biggest banks have much tougher regulation and stress testing. Anxiety and volatility high, but sharply lower interest rates, fed likely on hold, are strong positives for markets." / Twitter Bank share sell-off spreads to Japan as SVB collapse shakes markets | Financial Times (ft.com) >>> The BoJ revealed on Monday evening that it had stepped into the Tokyo equity market for the first time since early December 2022, buying $5.2bn worth of exchange traded funds. Collapse of Silicon Valley Bank, Signature Bank Calls Fed Interest Rate Path Into Question - WSJ >>> There is a saying that the Federal Reserve raises interest rates until something breaks. A big surprise over the past year had been that nothing broke. Things have broken now... SVB shows the perils of regulators fighting the last war | Financial Times (ft.com) After all, the fact that SVB was sitting on a massive, unhedged portfolio of long-term Treasuries was no secret; last year, JPMorgan circulated shocking calculations to its clients (which were recirculated this week) that showed that these (then) unrealised losses could wipe out tier one capital. Signature Bank Closure Deals Another Blow to Crypto Industry (yahoo.com) If you can't cash in casino chips after gambling and go home then folks will stop going to the casino... Credit Suisse finds ‘material weaknesses’ in financial reporting controls | Financial Times (ft.com) >>> In its annual report on Tuesday, Credit Suisse said “management did not design and maintain an effective risk assessment process to identify and analyse the risk of material misstatements in its financial statements” >>> CDS market a big spot of bother.. Credit Suisse Finds ‘Material’ Control Lapses After SEC Prompt - Bloomberg Barney Frank Sat on Board for Collapsed Signature Bank (breitbart.com) Couldn't make this up Pfizer Agrees To Buy Seagen For 43 Bn - BW Businessworld A deal to restart Ukraine grain exports is on its way (qz.com) Good news ! Budget 2023: Jeremy Hunt to create 12 new low-tax ‘investment zones’ across UK (msn.com) best stay calm and steady on spending Controversial small boats bill clears first Commons hurdle amid Tory calls for changes (msn.com)

Looks like the FED has 'finally' broken a few things with all their hikes...for those arguing that they will only stop when things break, a few are breaking now.. This week : markets will deal with SVB fall outs and consequences on rates policy and other 'moral hazards' out there , initial reaction positive in Eq markets (from oversold levels), but watch out. UK Budget coming up, the market will be all over what the FED will do or not do next week, 25bps still most likely IMHO, let's see. The ECB should do 50bps still on Thursday SVB closure & receivership is going to have a big impact on the tech ecosystem. SVB was not just a dominant player in tech but were highly integrated in some non-traditional ways Federal Reserve Board announces it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors Project Icebreaker, a joint initiative from the Bank for International Settlements and the central banks of Israel, Norway, and Sweden, has successfully concluded a study on the potential benefits and challenges of using retail central bank digital currencies (CBDC) in international payments “With 311k jobs added in February after an exceptionally strong January increase, we think the Fed will continue to see the labor market as still too tight….We continue to expect a 50bp hike and policy rates reaching 5.50-5.75%:” Citi’s Hollenhorst Gary Cohen : This is not 2008. Then every bank had a similar portfolio - mortgages - and home prices were falling. SVB has a very unique balance sheet. And unlike 2008, banks today are very highly capitalized and operate with significant regulations. The SVB matter is a classic run on a bank Bailouts : everyone calls on every governments to bail them out, government's money comes from 'everyone' (in other words : us, taxpayers..), they keep telling us that 'no public money' has or will be used.. ..sounds like a lot of cobblers to me ! GS : "In light of recent stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its March 22 meeting with considerable uncertainty about the path beyond March."... .this will be the ongoing discussion amongst ALL players.. did we see the top ? has the FED finally broken something, which is what will tell them to ease-off/stop the hiking cycle ..?.. Markets : Fastest FED hiking cycle in decades >>> should not be too much of a surprise that most ''leveraged'' parts of the investment community gets hit first, LDI, REIT's, housing, Crypto and parts of VC world, related banks >>> we pointed out recently that JNK, HYG was perhaps (still) too richly priced lately, again not all credit are bad, home work needs to be done on individual bonds, stocks and so on! Terminal rate from 5.7 in Sep to 5.06 in June now ..curve steepener (or less inverted..) 2s10s 75bp not -110 anymore Markets are unlikely to just settle nicely and quietly, they will be 'hunting' for the weak stories, weak balance-sheet stories, no need to be too brave at the moment, anyone who says they know exactly what will happen is not realistic about things. Many will push the contagion risk, again weakest balance-sheet, asset-liability mismatch stories will be looked at...it is not all bad! Investors will (should have done long ago) dump vulnerable names and buy quality GOLD either way should do rather well from here (credit risk and rates topped), credit risks always bring Gold, CHF and JPY higher Joint Statement by the Department of the Treasury, Federal Reserve, and FDIC | U.S. Department of the Treasury Federal Reserve Board - Federal Reserve Board announces it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors Where Were the Regulators as SVB Crashed? - WSJ Silicon Valley Bank CEO Tells VC Clients to ‘Stay Calm’ — The Information Last Thursday, CEO was telling clients 'stay calm'... couldn't make this up, this is exactly what you say when you want to trigger a panic... Rick Palacios Jr. on Twitter: "Unfortunately, home prices in tech and venture capital hubs are already down the most from 2022 peaks for markets we track across the country. Any additional setbacks for tech & VC (now brewing) aren't ideal. https://t.co/7K1H2gvTxO" / Twitter Coinbase Gave Silicon Valley Bank Stock Warrants for Access to USD Payments - CoinDesk Lack of diversification the big issue for these kind of banks (any business for that matter) Alf on Twitter: "SVB does not deserve a bailout. A deep look at their financial statement reveals how horrific they were at risk management. And in my opinion incompetence explains only part of it. Moral hazard must have been at play. A thread. 1/" / Twitter Prisoner ends life in Zug - WRS (worldradio.ch) Lordstown Motors founder cashed in before electric truck stalled | Automotive News (autonews.com) why or how can the 'system' let these things happen nowadays... BBC will not broadcast Attenborough episode over fear of rightwing backlash | BBC | The Guardian world (UK) definitely gone mad, good grief The Crooked House: Britain's 'wonkiest pub' to be sold - BBC News Love it! Central banks conclude cross-border CBDC experiment, Project Icebreaker (finextra.com)