An Anatomy of the Banking Crisis
Last Friday (March 10), seemingly out of the blue, the financial world was rocked by the failure of Silicon Valley Bank (SVB), then Signature Bank. This week we saw the contagion spread to Europe (Credit Suisse). The chart above shows the rapid plunge this past week in the S&P Regional Bank Index, which is not […]
The Silicon Valley Bank Insolvency and the Oncoming Recession: Blame the Fed
The big market-moving event of the week was supposed to be the February jobs numbers on Friday (March 10), but there was never a mention of those numbers in the financial media, upstaged by the second largest and completely unexpected bank failure in U.S. history, i.e., Silicon Valley Bank (SVB). The real issue here, which […]
The Economy Has ‘Recovered’ – Anemic Growth To Follow
The September jobs report was filled with cross-currents, some showing possible economic weakness, some showing strength. This makes the Fed’s job exceedingly difficult. Is the economy strengthening or weakening? What’s the correct monetary policy prescription? “Taper” asset purchases? Raise interest rates? Since September payrolls were so ambiguous, perhaps October’s (which will be available to the Fed prior to its November meeting) […]
Are markets too exuberant?
Equity markets hit new highs during the Thanksgiving shortened week. Markets often move in anticipation of changes in policy. This post election market, however, appears to have instantaneously adjusted to what it perceives will be policy outcomes. Such outcomes, however, are by no means guaranteed; some outcomes may take several quarters, others years, if at all. […]
Post-election market drama
Last Tuesday evening, while dining with family and business associates, I had one eye on the elections and the other on the Dow Jones Futures Index, a proxy for the Dow Jones Industrials (DJIA) in the non-trading hours. At one point, the futures were down 900 points, and I was drooling over the prospect of […]
Painted into a Corner A Review of the Economic Environment Entering Q4/16
While Q3 started out much better than the very slow economy of the first half of 2016, August’s data was very weak although there was some bounce in September. So, we enter Q4 with some serious concerns about the fragile state of the economy, where an outside shock or policy mistake could have serious consequences. […]