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Kolanovic, JPMorgan Stress ‘Ongoing Market Risks’
"For lack of better words, our outlook is negative," JPMorgan's Marko Kolanovic told a conference in
The real irony of current trends is that people are emptying their bank accounts to put their money in money market funds, which any banker will tell you are not protected by anyone or anything. And since the Treasury debt ceiling has not been raised, it is possible the first securities the Treasury will put in default will be the short term credits found in all money market funds. Sadly, stupid is a growing problem it seems.
My feeling, without any rigor supporting it, is that the real crisis will come from leverage away from regulated banks.
Shadow banking is my guess.
https://www.bloomberg.com/news/articles/2023-03-27/banking-crisis-raises-concerns-about-hidden-leverage-in-the-system?
https://www.bloomberg.com/news/articles/2023-03-29/jpmorgan-goldman-plan-to-start-trading-private-credit-loans
Private debt is a shadow banking area overdue for a mark-to-market paroxym.