Category: Financial Markets

Two Weeks To Save The Banking System!

For the final time in Australia, I caught up with Robbie Barwick from the Citizens Party. We looked at the progress towards the establishment of a Public Bank in the light of recent failures, and the inquiry into Regional Banking.

Importantly, there are just two more weeks to get your submission to the Inquiry. Have your say! and support the transformational policy.

https://www.aph.gov.au/sitecore/content/Home/Parliamentary_Business/Committees/Senate/Rural_and_Regional_Affairs_and_Transport/BankClosures/Submissions

Make a submission to regional bank closures inquiry

Submissions to the inquiry are due by 31 March. All communities, organisations, businesses, and individuals impacted by the banks’ war on cash are strongly urged to make a submission, including to support a government post office bank.

A submission can be a formal representation from an organisation, or as simple as a letter or email, which explains to the Committee your experience and views.

Elderly and vulnerable regional bank customers, who are disproportionately affected, are especially encouraged to hand-write or type physical letters and mail them to the Committee through the post.

Mail your submission to the Committee at this address:

Committee Secretary
Senate Standing Committees on Rural and Regional Affairs and Transport
PO Box 6100
Parliament House
Canberra ACT 2600

Email your submission to the Committee at rrat.sen@aph.gov.au

Upload your submission, and get more information, at the inquiry website

For more information, phone the Committee on 02 6277 3511.

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No Free Market Capitalism Here!

So once again the banks get a helping hand from the FED, and depositors in the US are guaranteed to an unlimited extent. But what of moral hazard?

And the markets now do not expect further rate rises, despite the inflation pressures in play. Yet perhaps there is a bifurcation between liquidity and rates, so perhaps the markets are not reading things right.

And once again the FED and Treasury proved Free Market Capitalism is dead!

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Banking Crisis Incoming?

Last Thursday the S&P 500’s bank index finished down 6.6% after hitting its lowest level since mid-October, its biggest one-day drop in over two years as Investors fled the sector after tech-industry lender SVB Financial Group launched a share sale to shore up its balance sheet due to declining deposits from startups struggling for funding and following crypto bank Silvergate’s decision to wind down operations.

Shares of SVB, whose operating segments include Silicon Valley Bank, slumped over 50% in their deepest one-day drop on record after the company announced a $1.75 billion share sale late on Wednesday. SVB is battling cash burn due to declining deposits from startups struggling with a venture capital funding drought.

Unlike most banks, which are helped by rising rates, SVB Financial is “generally hurt by them,” Oppenheimer says, as its deposit base is “generally made up of commercial customers who are rate-sensitive.”

The slump in SVB Financial further soured the sentiment on banking stocks, which have been pressured by a deeper inversion in the Treasury yield curve – a harbinger for a recession.

Morgan Stanley analysts said lower 2023 NII guidance at SVB is driven by cash burn among private companies that bank with SVB. This, according to the analysts, will cause SIVB to bring more higher-cost sweep accounts onto its balance sheet, paying roughly the Fed funds rate to do so.

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Risk On In Tech And Financials

The S&P 500 slumped Friday, amid fears of contagion that swept through banking stocks as regulators closed SVB Financial to protect customer funds after the beleaguered bank’s effort to secure funding failed.

The S&P 500 fell 1.4%, the Dow Jones Industrial Average fell 1%, or 333 points, the Nasdaq Composite was down 1.8%.

SVB Financial Group was closed by regulators and its deposits placed under control of regulators to protect depositors following a run on deposits, after its parent company’s share price crashed a record 60% on Thursday.

In the latest update regarding the rapidly moving SVB Financial Group saga, the Federal Deposit Insurance Corporation (FDIC) said Friday that SVB has been shut down by the California Department of Financial Protection and Innovation.

The regulator, which appointed the Federal Deposit Insurance Corporation as receiver, revealed that the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB) to protect insured depositors. (250k)

“The FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank,” the FDIC said in a statement.
They added that all insured depositors will have access to their insured deposits no later than Monday, March 13.

The FDIC said it will pay uninsured depositors an advance dividend within the next week. For any remaining uninsured funds, depositors will receive a receivership certificate. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to certificate holders.

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All About The Fed, And What Might Break First!

In this week’s market update we look at the contention between the markets and Central Banks. The former is banking on cuts later this year, the latter focusing on inflation control, and the need for higher interest rates. Both cannot be true.

And results this past round suggest weakness ahead.

CONTENTS

0:00 Start
0:15 Introduction
00:30 US Monetary Policy
03:00 US Markets
07:35 US Bond Yields
08:15 US Terminal Rates
10:30 Gold (Who Is Buying?)
12:00 Sound Money??
16:25 Oil
18:20 European Markets
19:25 Euro Terminal Rates
21:00 Asian Markets
23:10 Australian Markets
25:54 Crypto
26:55 Summary And Close

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DFA Live Q&A HD Replay: Investing Now With Damien Klassen

This is an edited version of a live discussion with Head of Investments at Nucleus Wealth and Walk The World Funds, Damien Klassen. Where are the markets heading, and what are the chances there will be a policy mistake as rates are taken higher?

You can ask a question live.

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Amplified Concerns Signals Further Market Falls Ahead!

In the latest market update, we look at stronger economic data from the US driving inflation and FED rates higher. We also cover Europe, Asia and Australia. Risks seem elevated with regards to future market action! A wake-up call to Bulls?

CONTENTS

0:00 Introduction
1:30 Earnings and PEG
6:24 PCE Read
9:45 New Home Sales
11:39 US Markets
14:15 Oil Prices And the USD
17:10 European Markets
19:35 Asian Markets
21:20 Australian Market
23:54 Crypto
24:11 Summary and Conclusion

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When Good News Is Bad News And People Run For The Hills!

The latest PMI data was strong, but the markets took it as a signal of more FED rate hikes, so the indices dropped. More evidence that good news in bad news. And more analysts are not calling a higher terminal rate, and lower markets, as earnings slump.

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Households Caught In The Cross-Fire!

In the latest edition of our weekly update, we look across the markets and reflect on how households are being pushed under the bus by higher rates, and as the expectation for yet higher rates (and for longer) takes hold.

Locally the first signs of stress are showing on the banks.

  • CONTENT
  • 0:00 Start
  • 0:15 Introduction
  • 1:00 US Markets
  • 5:05 US Households And Debt
  • 6:55 Oil and Gas
  • 8:23 Europe
  • 10:17 Asia
  • 12:18 Australia
  • 14:00 Bank Margins And Rising Exposures
  • 21:00 RBA Under The Microscope
  • 26:30 Crypto
  • 26:40 Conclusion And Close

The latest edition of our finance and property news digest with a distinctively Australian flavour.

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US Inflation Is Hanging Around Like A Bad Smell!

The latest US inflation data suggests inflation is more intractable than the markets were hoping. So what are the consequences for rates and markets in the months ahead.

Opinion is divided, but more analysts are forecasting higher rates and for longer, and are becoming more aligned to the FED’s position.

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