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America’s Banks May Face ‘Profitability Crisis’
It still feels a bit like markets haven't internalized (or are unwilling to come to terms with) what the events of the past several days may portend for the banking system and the economy more generally.
Already, enough has been written on SVB to fill a book. And you can be sure that somebody, somewhere is already planning to write an actual book about the episode.
But in our zeal to pen the definitive take on one bank's demise, we shouldn't be derelict when it comes to assessing the read-thro
Net interest margin erosion, slower deposit and loan growth, heightened regulatory scrutiny, lower return on equity, and the risk of more “breakage”, not necessarily in banks but maybe in something that touches banks (CRE, etc). It feels like right now you only want to buy bank stocks if you can get them really cheap. Which means you’re looking at . . . the regionals . . . because I don’t think any of the SIFI banks are really cheap.
Treasury.Direct, where our family buys short term T-bills, was down most of the day yesterday due to “maintenance”. Go figure.