Have we hit peak Federal interest rates?

Correct. Crypto firms banked with SVB. Their issue (incompetence) had nothing to with investments in Crypto or exchanging it for real money.

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partially. the other part was their inability to seemingly manage risk by sinking almost all their money into bonds and not having liquid assets to cover an event such as this.

with a SVP from Lehman i suppose you couldn’t expect for anything less…

Apologies. I think I grossly exaggerated the ‘bet heavy on crypto’ part.
They did have some direct exposure to the cryptos derivatives though, or am I mistaken?
And I do believe there is a conceptual bet on crypto-ecosystem thriving on these banks’ parts.

I guess I am trying too hard to find things to discredit Crypto Currencies.

Are we loading the CS calls today? Some bank with take them over for the treasure trove of Swiss bank account black mail.

Cs has been having issues for years. Saudi prince said they won’t be bailing them out. Def more risk on calls here then the small us based banks Monday. I’m not touching CS. Been burnt in the past by them

This is also euro politics not American. They want Switzerland to use euros so it’s highly possible they allow their main bank to fail.


As I think you mentioned, BTFP is funded by ESF, and as far as I’ve read is still capped at $25B. Even if you bring $25B in MBS and lend it all back-out at the money multiplier, you’re at roughly $225B. I don’t see where you get Jaime Dimon’s fantasy numbers here.

Even if that becomes the number, none of these emergency programs were ever tapped-out (which is the point).

The ECB raising rates 50 bps today did nothing to help the situation.

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ESF can be as much as the Fed, Pres and Congress want it to be. CARES Act funding, Mexico relief (no congressional approval there though) and on and on.

The Fed can pretty much do whatever it wants with authorization. If the current mess keeps accelerating I could see the ESF being north of $2T before it is all over. Printing more money always can be done as long as you can pay the interest on the debt and can keep inflation under control (right? ha!)

I need to find my $1T coin…


But we’re not paying for it… :joy:


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.


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”


Why started this meme by the way? :face_with_raised_eyebrow:


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


Next time, it’ll be different.

Need to buy puts for who ever this person works for.