Yes it was. Peak inflation was over prior to the Fed taken action. Besides, this wasn't normal inflation due to economic activity or demand. It was shutdowns, pandemic, supply chains, gov overspending, workforce dynamics, etc. Lots of logic to say such things are beyond the Fed's control. Most of these rate hikes were unneeded.
Peak inflation may have been over, but it was still 8% in Sept. Heck it's still over 6%.
Your POV? LOL. I "think" it's "you" agreeing with "their" POV. Not vice versa. You should diversify your media sources. Repeating the musings of CNBC cartoon characters is problematic. Maybe go Bloomberg. "Fed has blood on their hands." Funny. No mas....
That would be good for everyone; except for my regional bank shorts
I read about SBNY yesterday. Regardless of a SVB sale, you may want to hold onto that short! LOL.
Do you stop taking antibiotics on day 2 of a 5 day prescription because you feel a little better? You're not cured on day 2.
I don't disregard the long term trend. And on the ground I'm still seeing prices increasing.
Or stop pouring water on a house fire that is "mostly" out?
YoY data has no bearing on reality or policy decisions moving forward. It is just a nice historical view of past metrics.
www.marketwatch.com
20 banks that are sitting on huge potential securities losses — as was SVB
SVB Financial faced a perfect storm, but there were plenty of other banks with high levels of unrealized securities losses as of Dec. 31.
| Bank | Ticker | City | AOCI ($mil) | Total equity capital ($mil) | AOCI/ TEC – AOCI | Total assets ($mil) |
| Customers Bancorp Inc. | West Reading, Pa. | -$163 | $1,403 | -10.4% | $20,896 | |
| First Republic Bank | San Francisco | -$331 | $17,446 | -1.9% | $213,358 | |
| Sandy Spring Bancorp Inc. | Olney, Md. | -$132 | $1,484 | -8.2% | $13,833 | |
| New York Community Bancorp Inc. | Hicksville, N.Y. | -$620 | $8,824 | -6.6% | $90,616 | |
| First Foundation Inc. | Dallas | -$12 | $1,134 | -1.0% | $13,014 | |
| Ally Financial Inc. | Detroit | -$4,059 | $12,859 | -24.0% | $191,826 | |
| Dime Community Bancshares Inc. | Hauppauge, N.Y. | -$94 | $1,170 | -7.5% | $13,228 | |
| Pacific Premier Bancorp Inc. | Irvine, Calif. | -$265 | $2,798 | -8.7% | $21,729 | |
| Prosperity Bancshare Inc. | Houston | -$3 | $6,699 | -0.1% | $37,751 | |
| Columbia Financial, Inc. | Fair Lawn, N.J. | -$179 | $1,054 | -14.5% | $10,408 | |
| SVB Financial Group | Santa Clara, Calif. |
| Bank | Ticker | City | AOCI ($mil) | Total equity capital ($mil) | AOCI/ (TEC – AOCI) | Total assets ($mil) |
| Comerica Inc. | Dallas | -$3,742 | $5,181 | -41.9% | $85,406 | |
| Zions Bancorporation N.A. | Salt Lake City | -$3,112 | $4,893 | -38.9% | $89,545 | |
| Popular Inc. | San Juan, Puerto Rico | -$2,525 | $4,093 | -38.2% | $67,638 | |
| KeyCorp | Cleveland | -$6,295 | $13,454 | -31.9% | $189,813 | |
| Community Bank System Inc. | DeWitt, N.Y. | -$686 | $1,555 | -30.6% | $15,911 | |
| Commerce Bancshares Inc. | Kansas City, Mo. | -$1,087 | $2,482 | -30.5% | $31,876 | |
| Cullen/Frost Bankers Inc. | San Antonio | -$1,348 | $3,137 | -30.1% | $52,892 | |
| First Financial Bankshares Inc. | Abilene, Texas | -$535 | $1,266 | -29.7% | $12,974 | |
| Eastern Bankshares Inc. | Boston | -$923 | $2,472 | -27.2% | $22,686 | |
| Heartland Financial USA Inc. | Denver | -$620 | $1,735 | -26.3% | $20,244 | |
| First Bancorp | Southern Pines, N.C. | -$342 | $1,032 | -24.9% | $10,644 | |
| Silvergate Capital Corp. Class A | La Jolla, Calif. | -$199 | $603 | -24.8% | $11,356 | |
| Bank of Hawaii Corp | Honolulu | -$435 | $1,317 | -24.8% | $23,607 | |
| Synovus Financial Corp. | Columbus, Ga. | -$1,442 | $4,476 | -24.4% | $59,911 | |
| Ally Financial Inc | Detroit | -$4,059 | $12,859 | -24.0% | $191,826 | |
| WSFS Financial Corp. | Wilmington, Del. | -$676 | $2,202 | -23.5% | $19,915 | |
| Fifth Third Bancorp | Cincinnati | -$5,110 | $17,327 | -22.8% | $207,452 | |
| First Hawaiian Inc. | Honolulu | -$639 | $2,269 | -22.0% | $24,666 | |
| UMB Financial Corp. | Kansas City, Mo. | -$703 | $2,667 | -20.9% | $38,854 | |
| Signature Bank | New York | -$1,997 | $8,013 | -20.0% | $110,635 | |
I think the long term, mid term, and short term should all be considered. And I don't think just taking an average of them gives you an accurate picture. It's nuanced, and I do think that even though the short term metrics indicating inflation is done, the longer term trends indicate that it's not, or at least the potential for further flare ups are still there.
Some stocks get too much short interest so if you go to short a stock you are faced with with either a:
But it’s the Fed’s fault.So it seems like Founders Fund and a widely read tech blog started the bank run.
A Tech Newsletter caught wind of SIVB's finances after their last earning call, tweeted out the 185:1 leverage that SIVB was using, two weeks ago. VC's started paying attention.
Earlier in the week, Peter Theil's Founders Fund, started moving its own cash out of the bank. Then on Wednesday, he asked that their normal capital call deposits be made to other banks instead of SIVB(capital call is a process when limited partner investors send in money to VC fund accounts housed at a bank, for the purposed of the VC fund investing in a portfolio of start ups).
On Thursday $42 Billion was pulled. Game over.
Evan Armstrong
@itsurboyevan
Kinda insane that this entire debacle was potentially caused by
@ByrneHobart's newsletter.
Here's how the butterfly effect happened. 1) Byrne posts this article/Tweet calling out SVB's risk. 2) Pretty much every VC I know reads this newsletter 3) They all start to pay very, very close attention to SVB earnings 4) Absolutely massive earnings miss by SVB 5) Peter Thiel, USV, and Coatue are first to send out messages/mass emails to portfolio co's to pull out funds 6) Tech Twitter catches word of this 7) Bank Run 8) Collapse 9) If FDIC/Buyer doesn't come in, in the next 7 days, potential 20%+ collapse of entire startup industry. All started by one overly prolific dude in Austin. Amazing.
-----------------------------------------------------------------------------------------
Quote Tweet:
Byrne Hobart
@ByrneHobart
·
Also in today's newsletter: Silicon Valley Bank was, based on the market value of their assets, technically insolvent last quarter and is now levered 185:1.
Show this thread
ridiculous....
After SVB failure, US acts to shore up banking system confidence
U.S. authorities launched emergency measures on Sunday to shore up confidence in the banking system after the failure of Silicon Valley Bank threatened to trigger a broader financial crisis.www.reuters.com
this has zero to do with relaxing regulations as the only one that matters is glass steagal. try as the left might, this isn't on Trump. This is soley, 100% on management
SVB CEO Greg Becker lobbied the government to relax some Dodd-Frank provisions on regional lenders in 2015. Trump did in 2018.
When Silicon Valley Bank busted, it had assets of $220 billion. Trump's rollback lifted the "systemically important" threshold from $50 billion to $250 billion.fortune.com
SVB CEO Greg Becker lobbied the government to relax some Dodd-Frank provisions on regional lenders in 2015. Trump did in 2018.
Looks like another trainwreck.
no they did not which is not odd considering the hubris and lack of financial credibility it's management had. they should have
no, the FED window is open for any and all liquidity issues and if coverage ratios are below limits (this is not a tier 1 bank so they have different limits and responsibilities that Citi, BAC etc don't have) then the Fed would still take manage but not in receivership
they'd of had to pledge htm securities which they could have however, this bank was so mismanaged that they didn't have enough of pledgable securities other than what state commission required.
I'm not an expert on it but but they may not have been creditworthy enough to use the primary discount window.
That's why the fed should not pay $1 for an uninsured account over $250K.
This is what the FED is supposed to do. This will bolster the dollar, which is disinflationary.Interesting thread circulating among cognoscenti .
SVB was very generous towards clients -good terms, helping them buy homes etc (lots of clients from China - maybe 1/3)
I like people (Dowd and some other) who do long-term perspectives
50 years of charts is not much in land of tectonic economics
Western economies are historically unique for their acceleration over 100s of years.
The "Industrial Revolution" was 800 years in the making.
Credit was a key to acceleration and it needs to keep expanding more or less
With global debt described as over 300 trillion, there isn't much room left for viable debt (hence US buying own debt)
In US, M2 growth has gone below zero only fives times since 1868.
1958 was the only mild sub-zero tank - deflation usually followed pronounced spikes (had different causes)
Greatest increase of M2 in history was during lockdown.
Post peak the piper will need paying and there isn't much the Fed or anyone else can do.
Dollar will be biggest midget for now.
"The greatest deflationary cycle ever I believe lies ahead. Tim Wood & I discuss Stocks, Dollar, 30 yr Bond (prices) & most importantly M2 the money supply. This is the 5th time since 1868 that M2 growth has gone negative on a yearly basis. Interview link below."
you're wrong and most of these stupid pundits you refer too reallyhaven't a clue on liquidity management or FI.
telegraphed, should not be a surprise to anyone. the rate of increases from zero was fine, the management of the interest rate risk was not. I know what my bank has done throughout
Do you think this is solely a liquidity issue? They were under capitalized after they realized the losses. Treasuries are super liquid. Going to the Fed wouldn’t get them more than selling in the open market.
agree and on top of this, this will be deflationary as I said earlier as this will impact lending
no i've said it's a interest rate mismanagement issue that led to a liquidity issue once the balance sheet was examined.
