Ian Reynolds
FED Saves The US Banking System (Again)
Prompt action backstopping deposits by FDIC, FED and many other acronyms, alleviated further banking crises in the US for now.
Do they care ? Well not about Signature and Silvergate as their apparent purpose was helping crypto exchanges, funds etc on and off rails. Actually they're quite glad about that.
Not really about Silicon Valley Bank who was funding VCs and early stage private companies.SVB had a particularly insane operating treasury model so pretty much everyone doesn't care about them.
And in the same flurry the world got rid of the dirtiest bank ever, Credit Suisse.
So not bad for a week's work.
The problem is that the normally passive savers of the world finally awoke to the robbery that's been going on for a long time. They won't be going back so that leaves the US regional banks with a massive hole in their financial model.
The Wall Street Journal is reporting 186 US banks in financial trouble.
But for now some calm. Remember the GFC was like this. Chaos one week, calm the next.
Zombies On The Horizon
Globally SMEs are feeling the pinch, Government entities are warning that they'll be insolvent in 10 years, construction companies and car dealers are going to the wall.
Here's a good article in the AFR
Worst Default Wave Since Global Financial Crisis
Coolabah Capital know their stuff and do their research well. Their in-house knowledge of how the Reserve Bank of Australia works, enables them to question the academic assumptions in the central bank's modelling. They're worth a follow .
Is Real Money Poised To Break Higher ?
In Case You Missed It
Donald Trump to surrender to New York prosecutors on Tuesday [FT]
Defence lawyer says former US president ‘will not be put in handcuffs’ in hush money case.
Global Inflation (CPI) Trending Lower But Still High - [FT]
Italy close to securing industry safety net for Cinven-owned Eurovita [Reuters]
Eurovita grew rapidly under Cinven but ran into trouble when rising interest rates prompted clients to redeem their policies to reinvest the money.
FED's Favourite Indicator (PCE) Down But Not Out
Social Security to become insolvent in 10 years if 'no legislative action' taken, officials warn [Washington Examiner]
Australia
Business leaders bracing for a tax-the-rich budget [AFR]
There are growing expectations that Jim Chalmers will be inspired by governments in the US and Canada.
1700 aspiring owners stranded as Porter Davis goes under [AFR]
More than 4500 aspiring home owners have been left stranded by a wave of home builder collapses across Australia’s east coast that started in late 2021 and worsened on Friday when Melbourne-based Porter Davis Homes went into liquidation.
Also
- Property price declines slow
- Auction clearances rise
- Rents rise amidst record low vacancy rates
AUD / USD Trade Update
Short 0.7000
Short 0.7100
Stop 0.6940
Consolidating now into short-term uptrend. Be patient.
This Week's Economic Indicators
