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Fed/FDIC decisions on SVB determine whether they risk a bank run trillions of dollars in size.
1/3 of US deposits are in small banks and ~50% are uninsured. Haircutting SVB depositors will raise sensible questions about holding deposits at any small bank, risking a broader run.
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It seems @SecScottBessent’s “quick face-saving deals” strategy isn’t working even with close allies who appear unwilling to fulfill their roles in the Kabuki theatre.
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This is not the 2008 cycle.
Those drawing conclusions from '08 about the need to cut fast today to avoid the risk of a precipitous drop in growth ahead are missing the big picture.
'08 was the bursting of the greatest debt bubble in 100 years. This cycle is totally different:
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🔥 Top post: Years ago I led research on the GFC and was way out front sugges · 2.2M views
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It seems @SecScottBessent’s “quick face-saving deals” strategy isn’t working even with close allies who appear unwilling to fulfill their roles in the Kabuki theatre.
It doesn't take a PhD to understand tariff impacts:
- 10% tariffs are mostly absorbed by foreign producers.
- 50% tariffs are mostly paid for by domestic consumers.
- 245% tariffs stops all trade.
There are increasing signs the new admin is committed to cutting 25-35% of the federal workforce, totaling as much as 800k job losses ahead.
These cuts would add 50bps to the unemployment rate even before considering knock-on consequences…
Wrecking the economy is certainly one approach to create disinflation...
Tariffs implemented today are just the start of suite of planned levies that would bring US tariffs to above the Smoot-Hawley days in just a few weeks.
Even with modest retaliation by trade partners, these policies are shaping up to slice…
Economic data is coming in weaker than expected even before the growth negative fiscal policies from the new admin start to show up in the stats.
And for the first time we are starting to see some cracks in the euphoric expectations buil…
The selloff in US bonds has sparked a global dump of developed world sovereign debt.
Since US yields started rising after the Fed meeting in Sept, global bond yields are higher, while the dollar and gold are surging, reflecting an increas…
An aggressive global easing is here without a global slowdown or any stress in asset markets.
Such Over Easy policy has been pursued in the past by individual countries, but has never been run at a global scale.
Thread.
This is not the 2008 cycle.
Those drawing conclusions from '08 about the need to cut fast today to avoid the risk of a precipitous drop in growth ahead are missing the big picture.
'08 was the bursting of the greatest debt bubble in 100 …
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