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The Math Behind Deposit Insurance, And Why It's The Beginning Of The EndMar 23, 2023 - 10:10:25 PDT
As Simon White writes today, "a full guarantee of all bank deposits would spell the end of moral hazard disciplining banks and mark the final chapter of the dollar’s multi-decade debasement." And yet that's where we are headed, even if with a few hiccups along the way, because as White also notes, with the latest banking crisis in the US, it’s the clean-up that could end up doing far...
"To the shame of two generations of economists-turned-policy-advisors, moral hazard is a fact of life. We don’t need to add permanent dollar depreciation to this mess." ~ Alexander William Salter
The Country Where Economic Freedom Has Grown the Most Over the Last Two DecadesMar 23, 2023 - 08:19:44 PDT
The US only just scrapes into the second-best of the five categories, falling to #25 in the world.
Europe has made a valiant effort to seize back the banking shitshow crown it has owned for most of the past decade, but at the moment it seems the US still has a firmer grasp of it. Deutsche Bank’s George Saravelos has sent over some interesting charts on how US and European banks are faring at the moment. Notwithstanding the messy final denouement of Credit Suisse’s yearslong faceplants, Europe still looks better.
Approval of President Joe Biden has dipped slightly since a month ago, nearing the lowest point of his presidency as his administration tries to project a sense of stability while confronting a pair of bank failures and inflation that remains stubbornly high.
Republicans Introduce Bills To Prevent Biden Administration From Banning Gas StovesMar 23, 2023 - 08:08:47 PDT
ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
Mar 23, 2023 - 07:35:06 PDT
The median price of new home sales is down a whopping -8.18% since December 2022. And average price is down -12.83%.
Property Market Valuations: Another casualty (and cause) of banking stress is likely going to be all flavors of property… particularly given that all 3 of REITs, commercial real estate, and housing market valuations reached record highs in the wake of the pandemic emergency stimulus measures.
The boss of the country’s biggest brick-making company, Brickworks managing director Lindsay Partridge says a sharp slowdown in housing construction and renovations is likely towards the end of 2023, with a backlog of work stemming from tradie shortages to provide a short-term buffer of about six months.
While Fed Chairman Jerome Powell appears determined to bring inflation down to their 2% target, inflation is far from under control.
At roughly the 1:26:00 mark in the video below, Powell responded to a Politico reporters question on the failure of Silicon Valley Bank. Politico: Can you speak to the role you will be playing in the Fed's internal investigation on its supervision and regulation.
Powell Explains the Fed’s New Regime: Rate Hikes & QT to Fight Inflation while Offering Liquidity to Banks to Keep them from...Mar 23, 2023 - 06:58:12 PDT
An enormously important new regime gets engraved into central-bank handbooks. The ECB and Bank of England are also on board.
Initial jobless claims dropped (again) last week to 191k (fewer than expected) and once again standing in the face of anecdotal evidence of waves of headlines of mass layoffs.
Goldman Sachs on Thursday raised its gold price forecasts, describing it as the best hedge against financial risks, and reiterated its bullish view on commodities as a banking crisis has yet to spill over into physical markets.
Gold prices extended gains on Thursday after the Federal Reserve signalled a potential end to its monetary tightening cycle could be on the horizon.
Russia’s central bank said its bullion holdings jumped by 1 million ounces over the past year as it bought gold in the face of Western sanctions.
Mar 23, 2023 - 06:12:15 PDT
Every time there’s a banking crisis, some scratch their heads and wonder, how could this happen? Surely it must be greed, bad risk management, or a lack of regulation? More intervention should solve it. However, all those excuses miss the most critical point: The U.S. banking system was destroyed by design, and the big banks played along with it.
Investors are convinced the Federal Reserve will hike again this year and won’t pivot to monetary easing until 2024 — an outlook they see as bearish for stocks.
Differing Powell and Yellen Messages Were a Lot for the Stock Market to DigestMar 23, 2023 - 06:09:37 PDT
Traders are accustomed to a bumpy ride whenever Jerome Powell speaks. But when Powell speaks at the same time Janet Yellen is talking to Congress about the health of the banking sector, the turbulence can get overwhelming.
Economic writer Charles Hugh Smith has repeatedly warned [about] the "crapification" of the U.S. economy.... customers with scant other buying options are forced to accept that few purchases will last.