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OT: Stock and Investment Talk
- Thread starter RU-05
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Word on the Street and via hints from the WH is that it will come in more favorable vs expectations. Perhaps that has been priced in somewhat today though, offsetting what would be a bigger selloff.
In fact, with the VIX still running hot and the major indices in the green I'd venture to guess that is what is happening at least to some extent.
Sold this weeks expiring 22.50 strike frc puts for $5.
I assume VIX activity is just focused on the financial sector and banks. Not to fully discount it, but I doubt it is spilling over to other sectors.
Also, new Redfin data shows OER declined by 0.3% (-3.6% annualized). Fourth month in a row registering deflation. Even the YoY metric hit a 2-year low.
And they have been getting halted all day.
The banks trading like it's the fall of 2008 and the rest of the market doesn't care. So strange.
EUROPEAN BANK INDEX DOWN 6.3% ON THE DAY, LARGEST ONE-DAY FALL IN MORE THAN A YEAR
https://twitter.com/zerohedge/status/1635268627497713664
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I was trying to respond earlier and everything went down, got locked up (two interesting phrases for that shot) wow, make that three now. Think you broke the site for a bit.
Sorry, too much? :)
Depends on which "workforce" you're talking about.
(and JK here folks)
PS..another vote/plea to leave the CE stuff to the CE Forum.
Something broke, but the Fed is still expected to go through with rate hikes
Markets still expect the Fed to keep up its inflation-fighting efforts, despite high-profile bank failures that have rattled the financial system.
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anon_0k9zlfz6lz9oy
Guest
25bps rate hike this week buys them about 5 weeks to get to May. 25bps aint going to make or break anything at this point but what it does is it signals that they're not afraid and that credit shouldn't be loosening until they feel inflation totally rolls over. At least that's what I think.
Unless a lot of these banks have a bunch of bad non performing assets on the books, it’s not the same imo despite how the equity is performing. I do wonder about the cash burn of these start ups and while they may be okay now what happens when the cash dries up and how that could affect outstanding loans.
For now, it seems like poor capital allocation and liquidity management, not that there’s a bunch garbage on the books. At least from what’s out there.
Plus you’d think the FDIC would’ve rolled up any other bank they think might have issues like they did with Signature. Better to kitchen sink things and wipe the slate clean rather than have a threat of another failure out there. I take that they didn’t to mean that any bank of significance in the regional space should be able to handle liquidity issues with the facilities and the window accessing conditions the Fed created. They have a year to work things out too and if it was needed I could see them extending that as well.
Ok, but that doesn't explain why the banks are selling off hard and the overall market is doing fine.
A week ago the FDIC chairman, a white cisgender male (for the right wingnuts here), said there are $630B in unrealized fixed income losses, as of the end of 22.
Well imo the fact that the overall market isn’t reacting much shows that they don’t see a real systemic issue once the gov’t made its moves.
Who the heck is pushing these stocks down, who knows. WS will push anything up or down if it makes a buck, it doesn’t mean it’s always correct. The stocks are acting like they’re going out of biz but I can’t imagine that many of them are in that shape with the fed facilities at their disposal. I’d say wait a week or two and let the news digest and see how these stocks are reacting then and if any new info has popped up.
Probability of a 0.50% hike has dropped to zero. No rate increase now up to 25% and growing.Something broke, but the Fed is still expected to go through with rate hikes
Markets still expect the Fed to keep up its inflation-fighting efforts, despite high-profile bank failures that have rattled the financial system.www.cnbc.com
Fed Rate Monitor Tool - Investing.com
Our fed watch tool displays a forecast estimation for fed hikes or cut by the next upcoming FOMC meeting.
Plunge protection team getting ready. Lol
Yes its very odd and my belief is its because of algorithms.
90% chance of .25 priced in. Not sure where you are getting your infoProbability of a 0.50% hike has dropped to zero. No rate increase now up to 25% and growing.
Fed Rate Monitor Tool - Investing.com
Our fed watch tool displays a forecast estimation for fed hikes or cut by the next upcoming FOMC meeting.www.investing.com
That is certainly how the market appears to be looking at things. Doesn't mean they are right.
There is a big flight to quality move going on right now as well. Europe equities sold off, their banks got hit harder than ours. Treasuries bid all day. Bitcoin bid, but a lot of shitcoins sold off.
The US equity market might look like the best place to be for foreign equity investors.
What’s the number at any given time? I don’t know. What’s the quality of that fixed income. If there’s no liquidity issue to force the realization of losses does it make a difference?
I always say I’m a simple layman Joe Retail. I view things in simple fashion. Holding power can often be the issue with investments. If you have it, whether it’s real estate, stocks or whatever you can make out just fine but if you don’t you can be burned badly. I feel like a bunch of these regionals suddenly have holding power because of the moves the Fed made.
The link I posted. I'm happy the market is still pricing in a .25% hike so the Fed can save face. It will make the upcoming pause announcement even more impactful!
0% chance of .50%
75% chance of .25%
25% chance of no increase
They don't, what they have is interest rate risk unaccounted for and alm mismatches. Yet, they continue to lend like drunken sailors. As I've said, the fed should hit reserve requirements and revolving credit lines
Very few fed guys I worked with, dined with, taught, or lectured were guys you'd hire to run 100mm much less fomc operations or facilitate prudent economic principles
I’m thinking about bringing in some of my 10% short SPY position before tomorrow afternoon.
Here’s my thesis. There are 3 possible scenarios and two are bullish:
- CPI. comes in cool; market goes up because rate hike pause is much closer than previously thought
- CPI comes in hot; market goes up because the belief is that the Fed views the regional bank problems are inherently disinflationary so a hot number for CPI will carry less weight.
- CPI comes in hot; market sh!ts itself because unrealized losses will take a longer time to unwind due to inflationary pressures pushing QE a month or two out.
I think that it will be door #3 but it could also be #2.
The fact that the S&P is trading flat and not up 50 makes me think that no one is betting on #2.
I made 6% on the short in the last month plus I crushed the 2 day shorts. Might be time to adjust. Either way tomorrow is VERY pivotal. We could be at 3700 or 4000 by Friday.
Here’s my thesis. There are 3 possible scenarios and two are bullish:
- CPI. comes in cool; market goes up because rate hike pause is much closer than previously thought
- CPI comes in hot; market goes up because the belief is that the Fed views the regional bank problems are inherently disinflationary so a hot number for CPI will carry less weight.
- CPI comes in hot; market sh!ts itself because unrealized losses will take a longer time to unwind due to inflationary pressures pushing QE a month or two out.
I think that it will be door #3 but it could also be #2.
The fact that the S&P is trading flat and not up 50 makes me think that no one is betting on #2.
I made 6% on the short in the last month plus I crushed the 2 day shorts. Might be time to adjust. Either way tomorrow is VERY pivotal. We could be at 3700 or 4000 by Friday.
By end of week you will see. The par acceptance was the mechanism to allow for continued rate hikes. On top of that, pledging securities doubles as deflationary as it pulls funds otherwise used for lending etc.
I don't disagree at all. That fed move, a first, is a big one. Allows flexibility
It'll come but until we see cc debt contract. More and more models are weighting this higher. Finally
How commonplace is it for regional banks to engage in swaps to hedge that kind of rate risk of their longer dated treasuries/fixed income etc..
You know, the person that came up with these ideas was likely a diversity hire.
😜
More likely a millennial. This is the type of nonsense my generation loves to come up with.
Frank in 2003 concerning rising worries about mortgages
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
New Agency Proposed to Oversee Freddie Mac and Fannie Mae (Published 2003)
Bush administration proposes new agency be created within Treasury Department to assume supervision of Fannie Mae and Freddie Mac, House Financial Services Committee hearing; new agency would have authority, which now rests with Congress, to set one of two capital-reserve requirements for...
I sympathize with the midsize / smaller banks. The SIBs have a fairly significant competitive advantage on one side, emerging digital lenders create competition on the other, and—on top of that—there are a lot of small / medium sized banks in any given region and it’s hard to differentiate in an industry where the products / services are very similar across competitors. The days of choosing the one with the best placed branch are long gone (as a fellow millennial, we barely knew those days).
This stuff is silly, but how do you get people to know about Signature Bank? All I know them for is failing. At least SVB had an industry niche that made them prominent before all of this.
These banks probably had extra time because in 2018 Trump signed off on not needing to bother with stress tests anymore.
SVB Failure Sparks Blame Game Over Trump-Era Regulatory Rule
(Bloomberg) -- Eight years ago, Greg Becker delivered a blunt message to lawmakers in Washington: the bank he ran was not like Wall Street.Most Read from BloombergBonds Rally, Stocks Steady as Fed Rate Path Mulled: Markets WrapFed’s New Backstop Shields Banks From $300 Billion of LossesSignature...
Frank in 2003 concerning rising worries about mortgages
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
New Agency Proposed to Oversee Freddie Mac and Fannie Mae (Published 2003)
Bush administration proposes new agency be created within Treasury Department to assume supervision of Fannie Mae and Freddie Mac, House Financial Services Committee hearing; new agency would have authority, which now rests with Congress, to set one of two capital-reserve requirements for...www.nytimes.com
He is so full of shit. Claiming they had no idea Signature had an issue until Friday. People have been calling this bank out since last fall.
He also says he thinks that the Fed shut them down because of crypto. He could be right about that . Ha.
Why regulators seized Signature Bank in third-biggest bank failure in U.S. history
The swift move shocked executives of Signature Bank, said board member and former congressman Barney Frank.
