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Off-Topic Stock Market & Crypto Discussion

SpikeUM said:
Thats irresponsible imho.
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100% agree. It could be another shoe that drops in the coming year. Tech Start-ups X, Y, and Z fail due to lack of capital YET they just ****ed it away by converting USD to Bitcoin, and Bitcoin dropped in value.
 
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90scane said:
A little irony in your own statements. Not sure what the official standard would be but over the next 5 years, I could see high inflation and slow growth.
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Thats why I said as a trade UNLESS there is stagflation, then all hard assets should do well or at least better than the market/
 
One more point: the bftp window is good for one year. Thus, the FED either expects to pivot before that year or banks somehow look stronger in a year which doesn’t seem likely without congressional intervention.
 
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SpikeUM said:
Another reason to be bearish

www.reuters.com

New York Fed board member warns of commercial real-estate risks

An executive who also serves on the board overseeing the New York Federal Reserve warned on Twitter of potentially systemic problems in the real estate finance market and called on the industry to work with authorities to avoid things getting out of hand.
www.reuters.com www.reuters.com
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There are so many negative flags in financials. Hard to see a way out of this mess without a big drop in rates or a big drop in asset prices/crash.
 
mr.h said:
U.S. stocks rose Monday, while bank stocks also moved upward after North Carolina-based First Citizens (FCNCA) bank agreed to buy most of Silicon Valley Bank….what do you think the Fed should do now?
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What I think doesn't matter one bit.

Since you asked: If I were J Powell, I likely would have raised .5 the last two meetings knowing full and well that **** was going to fall apart and I'd have to pivot at some point. The additional points would give me additional points to keep me from having to go to 0. I'd do everything in my power to keep rates above 2% from this point forward.
 
Now go back to January 2020: raise rates by .5 every other meeting and keep doing that until inflation goes away or something breaks. I have a funny feeling banks still would have failed but it may have taken longer AND the risk for the FED would be inflation would remain high and the terminal rate may have reached 3.5-4% thus not giving them much room to adjust down. As it stands, they could drop rates by 3.5% and likely get to 2%.
 
90scane said:
What I think doesn't matter one bit.

Since you asked: If I were J Powell, I likely would have raised .5 the last two meetings knowing full and well that **** was going to fall apart and I'd have to pivot at some point. The additional points would give me additional points to keep me from having to go to 0. I'd do everything in my power to keep rates above 2% from this point forward.
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That would blow up the economy and send us into a recession, that would not react to the rate cuts, the way the fed would want It to, in their made up time frame. So now we would have a new catastrophe.
The Fed has already hurt the economy with their excesses. We need a scalpel, not a chainsaw.
Imo, we are in pause territory.
 
Wow, if you read the article, they almost paid First Citizens instead of the other way around.
  • First Citizens BancShares is acquiring $72 billion in Silicon Valley Bank assets at a discount of $16.5 billion, or 23%, according to a Sunday release from the Federal Deposit Insurance Corp.
  • But even after the deal closes, the FDIC remains on the hook to dispose of the majority of SVB’s assets, about $90 billion, which are being kept in receivership.

www.cnbc.com

Here's why the U.S. had to sweeten terms to get the SVB sale done

The winning bidder in the government's auction of Silicon Valley Bank's main assets got several concessions to make the deal happen.
www.cnbc.com www.cnbc.com
 
SpikeUM said:
Wow, if you read the article, they almost paid First Citizens instead of the other way around.
  • First Citizens BancShares is acquiring $72 billion in Silicon Valley Bank assets at a discount of $16.5 billion, or 23%, according to a Sunday release from the Federal Deposit Insurance Corp.
  • But even after the deal closes, the FDIC remains on the hook to dispose of the majority of SVB’s assets, about $90 billion, which are being kept in receivership.

www.cnbc.com

Here's why the U.S. had to sweeten terms to get the SVB sale done

The winning bidder in the government's auction of Silicon Valley Bank's main assets got several concessions to make the deal happen.
www.cnbc.com www.cnbc.com
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We are back to “Two big to fail”
 
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7:30USDGoods Trade Balance(Feb) PREL $-91.6B +-0.20$-91B$-90.1B
07:30USDWholesale Inventories(Feb) PREL 0.2% +-0.960.6%-0.5%
07:55USDRedbook Index (YoY)(Mar 24) 2.8%--3.2%
08:00USDHousing Price Index (MoM)(Jan) 0.2% +1.16-0.6%-0.1%
08:00USDS&P/Case-Shiller Home Price Indices (YoY)(Jan) 2.5%02.5%4.6%
 
$160B was provided to banks via the discount window and BFTP since March 8. $110B of which was for First Citizen to buy SVB.

$300B was provided via FHLB in one week which is a massive amount! https://www.bloomberg.com/news/arti...one-week-as-banks-bolster-liquidity#xj4y7vzkg

In 2021, every quarter was below $400B. https://fred.stlouisfed.org/series/BOGZ1FL403069330Q

Since Insurance companies also hold MBS assets, I would assume a number of them have similar issues as banks that are holding MTM losses caused by the rapid increase in rates. Could we be heading towards a massive recession with insurance company, bank failures, and a massive credit crunch? Sure seems likely.
 
mr.h said:
That would blow up the economy and send us into a recession, that would not react to the rate cuts, the way the fed would want It to, in their made up time frame. So now we would have a new catastrophe.
The Fed has already hurt the economy with their excesses. We need a scalpel, not a chainsaw.
Imo, we are in pause territory.
Click to expand...

And you still think we aren't going to blow up the economy with .25? We are way past a soft or no landing IMO.

My safe assumption: many banks will fail beyond the 3 so far. Some insurance companies will fail. Unemployment will jump by 3% (not factoring in the millions who don't get counted). The recession is official at some point in 2023. The FED will be forced to pivot BUT will try to keep rates above 2%. Spreads from banks will remain above 2% due to the new risks of banking. Inflation is going to remain higher than 2%. As rates drop, the economy warms up again along with inflation and the next cycle will be much shorter.
 
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