interesting dynamic today with the 3 month treasuries taking a hit on rates but the 4 month treasuries rising. honestly not sure what to make of that.
There is a financial Rubicon between those two maturity dates that hasn’t been resolved.
Well so much for QT.
Fed balance sheet now at early Nov 2022 levels, erasing 4 months of QT.
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this theory hasn’t held up well today.
You’re telling me the debt ceiling was raised?
Massive liquidity is being injected back in the system greater than the crisis in ‘08 and ‘20. The debt burden will expand, they need to refinance their loan at a greater cost, and inflation will run hot. Let them continue to raise rates and see what happens to the even bigger banks.
QE infinity: what’s the other option? QT? Sucking the liquidity of the system at such high rates that the bank’s business model doesn’t work because they borrow short (volatile deposits) and lend long (loans and buying morgage backed securities). Now I also want to differentiate between demand deposits and time deposits. Time deposits are CDs or savings accounts. If you read the fine print, banks have the right to prevent you from withdrawing your deposits because those are NOT demand deposits. You have agreed to lend that money to the bank. That’s legally what a bank deposit is. It’s even more acute when it’s a time deposit and the bank can simply say “No”.
If there was a bank that took on deposits with 100% reserve then technically there would be no “bank run” because the bank would be able to give back everyone’s deposits. There is no bank like that today because the Fed has denied every attempt. People need to very careful where they deposit their money. If you deposit money at an exchange or intermediary and there’s no fee? They have costs, capital requirements, technology costs, staffing costs, right? What are they doing with your securities to be able to offer you free trading with no commission? They’re taking on a risk.
The Federal Reserve right now!
My favorite thing I read so far on US banking!
“Why just borrow 100% of the face value when you can turn around and immediately buy more treasuries using the first treasuries as collateral”
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This could easily snowball. How much money transferred this week from banks to bitcoin/crypto and precious metals? People losing trusts in banks could absolutely cause more contagion with defaults in that sector.
UBS is taking over CS and ubs isn’t exactly solvent either. This is all going to burden tax payers as govts are “backstopping” losses
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Surely (hopefully!) this is a joke haha
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Nobody talking about the fact UBS took over CS for almost 10 cents on the dollar.
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And now Bank of Japan? Oh boy…
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They did a little better. 40 on the $1 but still terrible for any shareholders. I wouldn’t be holding any banks right now, even though buffet is going value shopping apparently.
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FRC looking like a $0 unless they get bought for a CS deal.
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I didn’t hold that garbage. I just had a good feeling they were all gonna pop off last Monday’s lows! I didn’t sell at the top but it was still a good swing trade!
Aka I bought at the top of the tech bubble. Again…
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How did those FRC and CS calls you were recommending work out?