Markets spooked by a small bank in the US being in trouble. Should be "nothing to see here" especially as the UK economy grew 0.3% in January. But......
FTSE down almost 2% and most European markets down 1.5%.
Markets spooked by a small bank in the US being in trouble. Should be "nothing to see here" especially as the UK economy grew 0.3% in January. But......
FTSE down almost 2% and most European markets down 1.5%.
These sharp guys, whose articles I flatter myself to imagine I fully understand, reckon that rationally there is no correlation between SVB and bigger banks, so there *should* be nothing to worry about, but sometimes the irrational fear of contagion takes on a life of its own. Gulp.
The big picture is the Humphrey Hawkins testimonies at the start of the week, with Powell re-iterating, for the hard of hearing, "higher rates, for longer" and that he would be guided by data, especially from the services and employment data. We then had two very strong employment numbers on Wednesday and yesterday and the Big One will be at 13:30 today. Then we have US CPI Tuesday.
This is still playing out almost exactly like 1973-74. People always seem to worry about the last crisis but the next one is almost always similar to the one that's not in living memory for most people. If only we had a technique for looking back at history and learning from it ....
We have rising inflation AND rising interest rates and a commodities squeeze. That's classic 1973-74. The next 6 months could be hairy. My position hasn't changed - I have money on the side, picking up some cash from the odd short but am pretty confident that most things I continue to be invested in will be worth much more in 3-5 years.
Given that backdrop, some small regional bank taking a hit could be an over-reaction and an opportunity to buy global banks. FTX is going to take some digesting but so far it's been contained to berks. It could cause another Long Term Capital Management but I'd be amazed if it hit the big banks, given all the work done since 2008. If you see a serious player, the equivalent to BNP Paribas in the Financial Crisis, selling out before it all goes to shit, then worry. Even then, Lehman was 6 months after Paribas.
Similar to @WishIdStayedinthePub re interest rates - I watched a webinar yesterday from Waverton & the market prediction for UK interest rates is that they might go up to 4.5%-4.75% (original thinking was 4.25%) before staying there longer than had been anticipated. Thoughts late last year were that they'd start falling 3rd quarter this year & settle around 2.5%-3% by 2025. Now the thinking is 3.5%- 4% by end of 2024.
But reassuringly for @PragueAddick Bonds are recovering, although Waverton like Gov Bonds not Corporates. They have a Global Strategic Government Bond fund that has performances decently over the past couple of years. Actually made money last year which is novel for a Bond fund.
These sharp guys, whose articles I flatter myself to imagine I fully understand, reckon that rationally there is no correlation between SVB and bigger banks, so there *should* be nothing to worry about, but sometimes the irrational fear of contagion takes on a life of its own. Gulp.
Bill Ackerman is calling for the Fed to guarantee deposit holders and take a warrant in exchange. If the bank really is solvent, the government gets the upside and the run is stopped. Shares suspended 61% in pre-market.
Strong NonFarm Payroll numbers but markets bouncing - all about expectations!
These sharp guys, whose articles I flatter myself to imagine I fully understand, reckon that rationally there is no correlation between SVB and bigger banks, so there *should* be nothing to worry about, but sometimes the irrational fear of contagion takes on a life of its own. Gulp.
Bill Ackerman is calling for the Fed to guarantee deposit holders and take a warrant in exchange. If the bank really is solvent, the government gets the upside and the run is stopped. Shares suspended 61% in pre-market.
Strong NonFarm Payroll numbers but markets bouncing - all about expectations!
If thats what you call a bounce, you can call me a champion high-jumper😉
These sharp guys, whose articles I flatter myself to imagine I fully understand, reckon that rationally there is no correlation between SVB and bigger banks, so there *should* be nothing to worry about, but sometimes the irrational fear of contagion takes on a life of its own. Gulp.
Bill Ackerman is calling for the Fed to guarantee deposit holders and take a warrant in exchange. If the bank really is solvent, the government gets the upside and the run is stopped. Shares suspended 61% in pre-market.
Strong NonFarm Payroll numbers but markets bouncing - all about expectations!
If thats what you call a bounce, you can call me a champion high-jumper😉
One man’s bounce is another’s bloodbath. My stock monitor app is a sea of red. Only P&G, inexplicably is up, but its been clobbered for the last few weeks anyway.
Medium term, I'm afraid. The analysts I follow have been right about this market for months, even the rallies, and they've been promising this would happen somehow and sometime. CPI tomorrow could give a big relief rally. Or it could be the final kick in the bollocks.
Either way, sooner or later, people are going to extrapolate all this debt and conclude the recession really is coming this time. House and car markets in the US are deteriorating rapidly.
Blimy, this is not looking good, a sea of red the last couple days. So SVB is followed by Signature Bank is there more to come.
Those who no more than me, can you explain why this hitting the FTSE so hard, and especially financials. Lloyds is almost 100% Uk retail based, so why are their shares plummeting. Surely they are not likely to be exposed to either of these banks and or their account holding customers….. ?
Blimy, this is not looking good, a sea of red the last couple days. So SVB is followed by Signature Bank is there more to come.
Those who no more than me, can you explain why this hitting the FTSE so hard, and especially financials. Lloyds is almost 100% Uk retail based, so why are their shares plummeting. Surely they are not likely to be exposed to either of these banks and or their account holding customers….. ?
Think investors are anticipating higher costs/lower profitability coming down the pipe for all global banks as a result of the issues in the US (eg higher capital requirements just like post-2008).
Comments
FTSE down almost 2% and most European markets down 1.5%.
That's what they said about Lehman Brothers ;-)
This is still playing out almost exactly like 1973-74. People always seem to worry about the last crisis but the next one is almost always similar to the one that's not in living memory for most people. If only we had a technique for looking back at history and learning from it ....
We have rising inflation AND rising interest rates and a commodities squeeze. That's classic 1973-74. The next 6 months could be hairy. My position hasn't changed - I have money on the side, picking up some cash from the odd short but am pretty confident that most things I continue to be invested in will be worth much more in 3-5 years.
Given that backdrop, some small regional bank taking a hit could be an over-reaction and an opportunity to buy global banks. FTX is going to take some digesting but so far it's been contained to berks. It could cause another Long Term Capital Management but I'd be amazed if it hit the big banks, given all the work done since 2008. If you see a serious player, the equivalent to BNP Paribas in the Financial Crisis, selling out before it all goes to shit, then worry. Even then, Lehman was 6 months after Paribas.
But reassuringly for @PragueAddick Bonds are recovering, although Waverton like Gov Bonds not Corporates. They have a Global Strategic Government Bond fund that has performances decently over the past couple of years. Actually made money last year which is novel for a Bond fund.
Strong NonFarm Payroll numbers but markets bouncing - all about expectations!
If thats what you call a bounce, you can call me a champion high-jumper😉
Either way, sooner or later, people are going to extrapolate all this debt and conclude the recession really is coming this time. House and car markets in the US are deteriorating rapidly.
Those who no more than me, can you explain why this hitting the FTSE so hard, and especially financials. Lloyds is almost 100% Uk retail based, so why are their shares plummeting. Surely they are not likely to be exposed to either of these banks and or their account holding customers….. ?
Bitcoin looking good today too.