Tag: Federal Reserve

Venture Debt & SVB<span class="badge-status" style="background:red">Premium</span> 

Venture Debt & SVBPremium 

Venture Debt is a risky way to earn a return (just as SVIB) - especially when the source of capital is customer deposits as opposed to long-term limited partner capital for example. Extending loans to Technology firms that aren't generating cash, or in many cases that are not generating revenue is a risky bet. The … Continue reading Venture Debt & SVBPremium 

Tough Month For Banks

Tough Month For Banks

Tough month for bank stocks. Not a surprise when 3 month T-Bills yield 5%. How many depository institutions can compete at that rate level? Will the Fed blink? If JPM and GS shares crater - Yes. Otherwise, probably not. Also, as we wrote last night, SIVB may have a new owner come Monday. Source: https://g.co/finance/BANK:INDEXNASDAQ?window=1MContinue reading Tough Month For Banks

Labor Force Participation  – Weak

Labor Force Participation – Weak

Blame the various COVID relief packages for the weak labor force participation rate - 62.5% in February, up from 62.4% in January but down from 63.3% in February 2020 pre-pandemic. This at a time when the Biden Administration is proposing a $7 trillion budget. I'm not sure where demand for U.S. Treasuries to fund this … Continue reading Labor Force Participation – Weak

The Fed’s Balance Sheet Reduction (QT) Update<span class="badge-status" style="background:red">Premium</span> 

The Fed’s Balance Sheet Reduction (QT) UpdatePremium 

The Fed slightly reduced its T-Bill holdings this week. That was the extent of its QT effort. Meanwhile, crypto lender Silvergate went down for the count earlier this week. In addition, Silicon Valley Bank (ticker: SIVB) lost 60% of its market value on Thursday and is off another 22% in the aftermarket as Tech VC … Continue reading The Fed’s Balance Sheet Reduction (QT) UpdatePremium 

The Fed’s Balance Sheet Reduction (QT) Update

The Fed’s Balance Sheet Reduction (QT) Update

The Fed modestly reduced its Treasury and Agency security holdings. The 2-Year Treasury yield sits at 4.89%, its highest level since June 2007. The 10-Year Treasury yield sits at 4.08% (we told you it had upside and there is lots more room to move higher), it's highest level since November 2022. Yields will move higher … Continue reading The Fed’s Balance Sheet Reduction (QT) Update

Short-Term Paper, Quality Names and Gold

Short-Term Paper, Quality Names and Gold

Short-term Treasuries look attractive. The 1-month T-Bill offers a 4.67% yield. Beats cash and beats holding an equity index fund or ETF. I'm always a fan of owning Quality companies at an attractive price. However, I don't value equities as most investors do - I don't bucket stocks into "Value" "GARP" and "Growth" buckets. I … Continue reading Short-Term Paper, Quality Names and Gold