Operating at the Intersection of Technology and the Capital Markets
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Before we get to this week’s BTFP activity, when investors ask "When will we see a recession?", recall that back in March we were days away from a number of bank failures which surely would have caused those banks left standing to dramatically tighten access to credit. Rather than allow those mismanaged banks to fail, … Continue reading Weekly Update: Bank Term Funding Program
All is fairly quiet in the Eccles building as the Fed essentially held its Treasury position constant while modestly trimming its mortgage holdings. Treasuries: The Fed’s Treasury security holdings declined by $1.7 billion for the week-ended October 25th and declined by $47.7 billion on a rolling 4-week basis. Agencies: The Fed’s Government Agency security holdings declined by … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
The Wall Street Journal has published at least two articles this week about Return To Office (RTO) policies and how employees are coping with and gaming them. The fact that this is even an issue makes me sick to my stomach. If you are a company such as Automattic (the platform that TEK2day is published … Continue reading CEOs: Be Willing To Break A Few Eggs
The consumer is weakening, there is no doubt. This consumer weakening has played out in slow motion. The trend is likely to continue in my view so long as interest rates remain elevated. Elevated rates translate to higher borrowing cost for the consumer. This at a time when the price of goods and services remains … Continue reading Look at BofA’s Numbers. The Consumer Is Weakening.
For some companies, debt repayments are taking priority over innovation and other operational initiatives. Aside from zombie companies going bankrupt as a result of the Fed holding rates higher for longer, there is an entire class of Technology companies that will continue to suffer as a result of higher interest rates for longer. Take SS&C … Continue reading When Debt Payments Take Priority Over Investing In The Business
We have folded our CEORater-related content under our TEK2day brand. TEK2day will publish more content to YouTube in the coming weeks. Our YouTube content won't necessarily be published as a TEK2day podcast. We occasionally publish our content to LinkedIn, but not all of our content. The best way to find our content is here at … Continue reading TEK2day: All Things Technology & Capital Markets-Related
We don't write frequently about U.S. Labor data because it is junk data. Most Government survey data is in fact garbage. I can't think of a Government data set that I believe is a quality data set. The Labor data that the BLS publishes lags. It is better to watch what companies are doing. From … Continue reading Unemployment Will Get Worse Before It Gets Better
Back on June 28th I wrote that the Fed was not removing liquidity from the system on a net basis (QT, BTFP, TGA drawdown, reverse repo market, bank reserves). Bank reserves are a great proxy for liquidity in the system. In fact, bank reserves were up 1.3% year-over-year on June 28th, meaning there was more … Continue reading Liquidity Is Falling
The NASDAQ is still overvalued. Companies like SNAP, ZI and PAYC that have taken valuation hits over the past week due to disappointing earnings still have far to fall. The large Tech companies will also experience a valuation reset as rates remain elevated and as the money supply shrinks (QT), albeit much more slowly than … Continue reading Equities Will Eventually Reflect Economic Reality
The tune Fed Chair Jerome Powell is whistling is called "Dance of Death", and portends the death of commercial banks, especially small commercial banks. A close look at the chart below (click caption to expand), shows that as the Fed has raised its Fed Funds rate (blue stepped line), Retail Money Market Funds AUM has … Continue reading The Fed’s Dance of Death
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