by way of confoundedinterest17
Regardless of never-ending guarantees from Washington DC that there would by no means be some other financial institution bailout, the Biden Management bailed out Silicon Valley Financial institution (SVB) by way of putting off the $250,000 cap on deposit insurance coverage. Then Treasury Secretary Janet Yellen added that at some point, best banks that posed SYSTEMIC RISK to the financial system might be bailed out. Translation: best the massive 4 Too Large To Fail (TBTF) banks might be bailed out. That means that the Biden Management prefers giant banks to group banks. “Heart-class Joe” loves BIG Pharma, BIG protection, BIG tech, BIG media and now BIG banks. He must rename himself “Large Joe” Biden for the 2024 Presidential election.
After all, we’re conscious about The Fed’s about face on shrinking their stability sheet (inexperienced line). Whilst Bankrate’s 30-year loan charge has now declined under 7% to six.97%, it has best fallen -15 foundation issues for the reason that fresh top of seven.12% on 3/2/2023 when the 10-year Treasury yield was once 4.056%. So, the 10-year Treasury yield has fallen -62.7 foundation issues since 3/2/2023 whilst the 30-year loan charge dropped best -15 foundation issues.
At the Ecu banking entrance, Credit score Suisse is kaput and each Swiss Financial institution and Deutsche Financial institution are bearing in mind purchasing the belongings of Credit score Suisse. In different phrases, MORE financial institution consolidation.
Here’s a chart of US financial institution attention as of 2009 with 37 banks in 1990 shriveling to 4 mega, TBTF banks in 2009 that stay nowadays. However will the now unprotected group and native banks be absorbed into the 4 superbanks? Time will inform, but when historical past is repeated, the solution is sure.
The KBW financial institution index endured to fall regardless of the bailouts of SVB and Signature Banks. However no less than overall returns on Treasuries and MBS that banks hang larger with the go back of QE!
Yellen and Biden compete for the Knucklehead Of The Century Award. Whilst no longer as sloppy because the unexpected Afghanistan withdrawal, bailing out the Silicon Valley elites is not going to finish smartly.
