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SVTPerformance's Chain of Restaurants
Road Side Pub
SVB is Now In the Hands of the FDIC
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<blockquote data-quote="Klaus" data-source="post: 16892385" data-attributes="member: 190070"><p>Central banks are essentially plugging into each other so that they and commercial banks will have easier access to US dollars. </p><p></p><p>They are doing this because the market is freaked out about liquidity. Strange things happen in these moments given all of the intertwined relationships. If you are a giant bank or asset manager or insurance company it is impossible to game what your exposure to CS really is. </p><p></p><p>The last time they did this was in 2007 after JPM was forced to buy Bear Stearns. </p><p></p><p>Now it is UBS being forced to buy CS. </p><p></p><p></p><p></p><p>LOL that is a funny way of putting it but it is exactly correct. Nice analogy! </p><p></p><p></p><p></p><p>Pretty much. This week's Fed announcement will be the most watched in my career. The ECB showed last week that they do not give a **** and raised 50 bps. </p><p></p><p>My take is: </p><p></p><p>Raise 50 bps: market will go apeshit. Banks will fail since every fed raise makes the USTs they hold worth even less. Banks sell off hard and fed/FDIC intervenes. </p><p></p><p>No raise: market will go apeshit. The thinking will be "what does the fed know that we dont?" Banks sell off hard and fed/FDIC intervenes.</p><p></p><p>Raise 25 bps: market will be happy. Not sure if market goes up or down. Banks continue to fail as deposits continue to migrate to "SIBs" (Systematically Important Banks i.e. the ones that the fed will save no matter what)</p></blockquote><p></p>
[QUOTE="Klaus, post: 16892385, member: 190070"] Central banks are essentially plugging into each other so that they and commercial banks will have easier access to US dollars. They are doing this because the market is freaked out about liquidity. Strange things happen in these moments given all of the intertwined relationships. If you are a giant bank or asset manager or insurance company it is impossible to game what your exposure to CS really is. The last time they did this was in 2007 after JPM was forced to buy Bear Stearns. Now it is UBS being forced to buy CS. LOL that is a funny way of putting it but it is exactly correct. Nice analogy! Pretty much. This week's Fed announcement will be the most watched in my career. The ECB showed last week that they do not give a **** and raised 50 bps. My take is: Raise 50 bps: market will go apeshit. Banks will fail since every fed raise makes the USTs they hold worth even less. Banks sell off hard and fed/FDIC intervenes. No raise: market will go apeshit. The thinking will be "what does the fed know that we dont?" Banks sell off hard and fed/FDIC intervenes. Raise 25 bps: market will be happy. Not sure if market goes up or down. Banks continue to fail as deposits continue to migrate to "SIBs" (Systematically Important Banks i.e. the ones that the fed will save no matter what) [/QUOTE]
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SVTPerformance's Chain of Restaurants
Road Side Pub
SVB is Now In the Hands of the FDIC
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