Operating at the Intersection of Technology and the Capital Markets
Month: March 2023
UBS agreed to acquire CSFB. Sure, $17 billion in high yield debt was wiped out (perhaps we will see high yield downgrades as a result elsewhere across the landscape of financial issuers?) Despite the writedown of $17 billion in high yield debt, I hesitate to characterize this deal as a "bail in" because the Swiss … Continue reading The Latest Bank Bail Out: UBS To Acquire CSFB.
Americans fear for their bank deposits. Your deposits are safe. However, you should fear the remedy. The Fed bail out from last Sunday could result in $1-2 trillion of additional public debt assuming that the Fed marks up the assets of and extends loans to all U.S. banks except J.P. Morgan, Bank of America, Wells … Continue reading We’ve Got It All Wrong
Back in March 2019 we wrote about the future use of NLP-powered applications across various industries - in particular Financial Services (our 2019 TEK2day article HERE). Microsoft (MSFT) is bringing natural language capability to its Productivity suite - Microsoft 365. This natural language offering has a name: "Copilot". We include an example of Copilot deployed … Continue reading NLP & Productivity Apps: Microsoft Copilot
Investors have historically moved to Gold in times of uncertainty. Gold has moved substantially higher since the market turmoil in the banking sector kicked off last week. Here's why investors should be interested in Gold: perpetual money printing by the Fed, ever larger fiscal deficits and a mounting debt load - the combination of which … Continue reading Gold Safer Than Software
Fed Chairman Powell should lob calls into Andy Jassy (AMZN CEO), Tim Cook (AAPL CEO), Sundar Pichai (GOOGL CEO), Satya Nadella (MSFT CEO) and Doug McMillon (WMT CEO) in an effort to persuade them to consider acquiring a bank. To hell with potential pushback from the FTC. AMZN, AAPL, GOOGL, MSFT and WMT already dabble … Continue reading Amazon Bank, Apple Bank, Google Bank…
The Fed modestly decreased its Treasury and mortgage-backed holdings during the week-ended Wednesday March 15th. Thus, the Fed simultaneously ran QT with QE running in the background in the form of the Bank Term Funding Program (BTFP). You may read about the BTFP's first week in operation by clicking HERE. Treasuries: The Fed’s Treasury security holdings … Continue reading The Fed’s Balance Sheet Reduction (QT) Update Premium
The Bank Term Funding Program (BTFP) had approximately $11.9 Billion in outstanding loans as of Wednesday this week, just north of the Paycheck Protection Program (PPP, a COVID relic), which had $10.6 billion in loans outstanding. The "other credit extensions" line item of $142.8 billion includes the FDIC loans made to the regional banks this … Continue reading Weekly Update: Bank Term Funding Program
Nobody overdoes it like the Fed, except maybe the fiscal side of Government. Not only does the Bank Term Funding Program (BTFP) make bank collateral owned as of March 12th whole, the BTFP has a more attractive rate (at today's rate), compared to the Fed's discount window. When a bank borrows from the Fed's discount … Continue reading Expect Banks To Borrow Heavily from BTFP
It would be a mistake to believe that the prices of goods and services can't accelerate from here. Look at the trend (chart below) in Core CPI - it has headed in precisely the wrong direction since November 2022. Some of the Core CPI momentum is due to the Shelter category which carries a heavy … Continue reading The Fed Must Fight Inflation
If it was not clear in our recent piece Bail Out, I am not a fan of bail outs. Sunday's Fed action was a bail out, plain and simple. So much for Capitalism. Since 2009 the Fed has done as much to damage Capitalism as FDR's New Deal, Nixon's taking the U.S. off of the … Continue reading Fed Bail Out Creates Enormous Moral Hazard
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