My pure SWAG is that SVB will be bailed out, as this allows the Fed to kick the can down the road without having to give up on its goals of furthering Empire and crushing labor, while rich people cannot be allowed to lose money.
This move in rates is getting insane... The vol too... Maybe just FOMO buying based on March 2020 muscle memory, but it feels more like a Volmaggedon/CHF de-peg/GME/etc. type squeeze... Some funds/institutions getting caught short?
I tend to agree my base case is the violent repricing of rates we're seeing is premature, I think authorities will spin the SVB failure as idiosyncratic and isolated and the Fed will stay the course for the time being (we'll find out in 2 weeks I guess) and not pivot. However, while SVB seems to have been poorly managed and all the doomsday talk seems more like PTSD from 08-09 than a realistic assessment of the situation, it does show the stress on the system. I'm not a believer in another widespread US banking crisis, but to me it does seem to show that there is a significant risk of a bigger credit/liquidity event down the road (might not be one big thing... may be the economy dying from a thousand cuts...). How do you assess that risk? You've said previously that you don't expect a recession, but if you expect other failures, in banking or elsewhere, surely in a highly leveraged system that raises the risk of an eventual recession?
Interesting comment about new subscribers. Behind the Balance Sheet by Steve Clapham said the same thing earlier this week. I find that really weird. Both of you were on the Grant Williams podcast, but a while back.
I thought it was funny, maybe not in hindsight.
My pure SWAG is that SVB will be bailed out, as this allows the Fed to kick the can down the road without having to give up on its goals of furthering Empire and crushing labor, while rich people cannot be allowed to lose money.
Might be a noob question but how much do central bankers care about gold?
What would lead you to change your mind Russell?
If wheat/corn prices stop rising anymore?
If unemployment in the US > 6%?
Surely the Fed has it limits too.
This move in rates is getting insane... The vol too... Maybe just FOMO buying based on March 2020 muscle memory, but it feels more like a Volmaggedon/CHF de-peg/GME/etc. type squeeze... Some funds/institutions getting caught short?
Is the larger/premium miners a good enough position to have the call on gold or it's imperative to have the right call to be in $GLD
I go back and forth on this and like the miners for the 3%+ yield they off per quarter
I tend to agree my base case is the violent repricing of rates we're seeing is premature, I think authorities will spin the SVB failure as idiosyncratic and isolated and the Fed will stay the course for the time being (we'll find out in 2 weeks I guess) and not pivot. However, while SVB seems to have been poorly managed and all the doomsday talk seems more like PTSD from 08-09 than a realistic assessment of the situation, it does show the stress on the system. I'm not a believer in another widespread US banking crisis, but to me it does seem to show that there is a significant risk of a bigger credit/liquidity event down the road (might not be one big thing... may be the economy dying from a thousand cuts...). How do you assess that risk? You've said previously that you don't expect a recession, but if you expect other failures, in banking or elsewhere, surely in a highly leveraged system that raises the risk of an eventual recession?
👍🏻
Interesting comment about new subscribers. Behind the Balance Sheet by Steve Clapham said the same thing earlier this week. I find that really weird. Both of you were on the Grant Williams podcast, but a while back.
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