Obtuse: The Fed & Treasury View of Banking Issues
Despite ongoing silent runs on the Regional and Community Banks, it appears that both Fed Chair Powell and Treasury Secretary Yellen view the events of the recent past (SVB, Signature Bank, First Republic, Credit Suisse, and now Deutsche Bank) as one-off events and not symptomatic of stress in the world’s financial system. The dictionary defines […]
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 […]
Market Volatility to Continue – It’s the Economy (Stupid)!
Financial market volatility continued this past week (ending March 3). The equity indexes were up about 2% for the week (the Nasdaq slightly more) after shedding nearly -3% the prior week. They don’t seem to be able to make up their minds as to their direction. It’s a similar story for the fixed-income markets. The […]
CPI Will Set the Tone for Financial Markets
It was a light week for economic data, giving markets time to digest and analyze the prior week’s Fed meeting and the unexpected jobs numbers. By Friday (February 10), with the Fed’s unanimous FOMC view that the future held interest rate increases (plural) and reinforced by the spectacular +517,000 jobs numbers, the markets threw in […]
Lies, Damn Lies, Payroll Data
The big spike in the Payroll data (+517K) was out of kilter with what has been occurring in the rest of the economy and other labor market data. Financial markets always shoot first and ask questions later, so on Friday, equity markets fell, and bond yields rose on the fear that the Fed would now […]