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Fade the Jobs Number 3/10/23


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I would not blame JPM for bad call since they almost hit the target. The top was 350. Pretty good call. Just use trailing stop and probably around 320-330 you would be gone on the way back before crash.

 

bear in mind that brokers do thousands of calls or recommendations so they will always make some bad calls. the Q is whats the balance betweed good and bad calls.

 

Be the first to throw the stone...

 

The most important part is to manage the trade and get out in the right moment. its actually an art.

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A TALE OF TWO SISTERS

There are two sisters

1/ The FHLB ....the rather attractive sister.

2/ The FDIC...the less attractive sister.

When a bankster gets into trouble they have to dance with one of the sisters.

They all want to dance with the FHLB.

Because they get to live...perhaps not happily ever after..... but they get to live.

If they have to dance with the less attractive sister they get liquidated.

Silvergate bank got to dance with the FHLB.

But then suddenly the FHLB did not want to dance with it anymore.

Result....dance with the FDIC and liquidation.

SVB never got to dance with the FHLB.

Only a dance with the FDIC....liquidation.

Signature bank is still dancing with the FHLB

Lucky them.

But for how long??????????

The FHLB is getting rather fickle with its choice of dancing partners.

 

Without the implicit FHLB withdrawal gurantee.

The deposit whales are going to develop a bad case of itchy feet.

They will flee to the systematically important banks.

Who's stocks will outperform the regional bank stocks on a relative basis

Sounds like a good idea for a long short bank fund.

A good ETF idea

It needs a catchy name for marketing purposes of course.......

How about the "Fear and loathing bank ETF" 

 

 

 

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Great thread on twitter on Silicon Valley Bank https://threadreaderapp.com/thread/1634250754486857729.html

 

BTW on the sideline

"In 2018, President Donald J. Trump signed a bill that lessened scrutiny for many regional banks. Silicon Valley Bank’s chief executive, Greg Becker, was a strong supporter of the move. Among other things, it changed requirements for the amount of cash that these banks had to keep on their balance sheets to protect against shocks. "

 

Uncle Sam is banker to most of the startups in this country.  And all because SVB:

- had a core business lending to unprofitable companies 

- made a ridiculously long bet on bonds and MBS

- triggered its own run by announcing a fire sale and capital raise

 

 

IMG_20230311_094705.jpg

IMG_20230311_094723.jpg

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THE BIG BENEFICIARIES

The big four banks will be the big beneficiaries of all this.

The Whale depositors will flee to them.

They will have cheaper deposits and a stronger competitive position versus the regionals.

 

Of course a deposit protection scheme that protects above 250K would level the playing field.

(Particularly as the FHLB's seem to have withdrawn their implicit withdrawal guarantee....but it may still exist on a case by case basis)

So probably lots of legislative fun and games about to commence.

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32 minutes ago, Jimi said:

Does anyone really believe that banks in America are going to open Monday morning without a plan to make all the uninsured depositors at SVB whole?

Buy this bridge from me:

image.jpeg.89825521acbc1bfcac9d732a0a17b98e.jpeg

My sister just called to get advice on how to keep her cash safe. Large depositors are abusing the wire service to get the hell out of regional banks right now. The damage is done.

The Fed needs to get a pair and end "the Fed put" and ZIRP. It'll be very painful but that's what needs to happen.

 

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32 minutes ago, sandy beach said:

My sister just called to get advice on how to keep her cash safe. Large depositors are abusing the wire service to get the hell out of regional banks right now. The damage is done.

The Fed needs to get a pair and end "the Fed put" and ZIRP. It'll be very painful but that's what needs to happen.

 

That‘s what equities holders never get:

In the end, when it comes hard, CB‘s will always sacrifice equities to save the system as such. I mean it is quite easy to understand. Take solvency law fir example: First bond holders are served THEN equity holders. That‘s in fact the reason why bonds are perceived as „safer“.

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38 minutes ago, fxfox said:

That‘s what equities holders never get:

In the end, when it comes hard, CB‘s will always sacrifice equities to save the system as such. I mean it is quite easy to understand. Take solvency law fir example: First bond holders are served THEN equity holders. That‘s in fact the reason why bonds are perceived as „safer“.

Unless you are GM (General Motors), et. al....and Politics as usual become the new norm.......

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