regional bank scare 2.0?

Discussion in 'Economics' started by spectastic, Apr 25, 2023.

  1. spectastic


    market is selling off because of FRC losing deposits, but we already saw this in march. is this a bear trap/dip buy opportunity, or did the market fail to appropriately price in the full implications of super fast rising rates the first time, like it did with covid in Jan, 2020. thoughts?
    murray t turtle likes this.
  2. maxinger


    Europe also has bank problem.

    But look at their stock markets.
    France CAC40 keeps on breaking record high. Other indices will break record high soon.
    murray t turtle likes this.
  3. Silvergate Capital Corporation (SI) comes in top positions in my scanner, for Put shorting...
    Something is going on with it...

    Sector(s): Financial Services
    Industry: Banks—Regional
    Full Time Employees: 300
    Silvergate Capital Corporation operates as a bank holding company for Silvergate Bank that provides banking products and services ...
    Last edited: Apr 25, 2023
  4. SunTrader


    $BKX (KBW Bank Index) gapped down on open, moved lower into the lunch hour, then closed near LOD. A bull trap if ever there was.

    The trend is the trend until it bends.
  5. newwurldmn


    Frc announced its going to suicide itself by selling 1/2 its assets in a fire sale. That caused the drop at lunchtime.
  6. spectastic


    to clarify, I think the lingering question since March had always been, if banks had been suffering, what else got damaged? And did the market fully price it in? not so much are banks still liquid/solvent, because we already know the fed has guaranteed depositors. it's likely the reason why the russell has been so weak and is diverging further from spy and qqq.
    newwurldmn and M.W. like this.
  7. SunTrader


    R2K (black line) ended the day much weaker than $BKX (red line) components seem to indicate that it would. Also as Spread Ratio (blue line) indicator shows $BKX being, relatively speaking, stronger - at the close.

    ! BKX v R2K.png
  8. What's the opposite of bank run? Money center banks are seeing massive inflow of panic deposits from regional bank depositors.
  9. SunTrader


    Likely much of the money TBTF banks put in Republic, originally came from Republic.

    Thanks once again to the Fed "Rich get richer".
    turkeyneck likes this.
  10. piezoe


    IMO it's categorically wrong to blame the Fed for this, although I see it done over and over again.. The Fed facilitates the rich getting richer, but it seems they have no choice if they are to do their job well.

    This phenomenon of the rich getting richer is a fundamental characteristic of economies where the return on capital is greater than the economic growth rate. Up to a point this is a desirable feature of capitalism, but both the rate and the limits to which the rich get richer is regulatable in a way that maintains both a strong economy and a strong democracy. Central Bankers can not do this. It must be done with fiscal measures that Congress controls. Here, the United States is falling woefully short. If nothing is done to correct the faults we have introduced into our taxing system, then we should expect a continuation of the current drift toward concentration of political power, which seems to be making possible a disconnect between what people want and what government is doing in specific matters that benefit only a very few. The outcome of this tendency is never very clear, but it is generally considered to be bad thing. It leaves the fate of the people in the hands of too few powerful people who may not always have the best interests of society in mind when making decisions.

    The responsibility to maintain a wise tax system is entirely within Congress's hands; not the Fed. We are in trouble because we have intentionally made political choices that have resulted in both an unwise taxing system and a dysfunctional Congress. It would seem all "-isms" contain the seeds of their own destruction. We may be experiencing the veracity of this first hand.
    Last edited: May 15, 2023
    #10     May 15, 2023
    murray t turtle likes this.