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Dominoes
"As each domino falls, the next weakest begins to wobble," Bill Ackman warned.
He was referring, of course, to America's regional banks, which remain under siege despite exhortations and assurances from no less than Jamie Dimon and Jerome Powell this week.
Banking, Ackman reminded US officials, "is a confidence game." His assessment was dire. "At this rate, no regional bank can survive bad news or bad data as a stock price plunge inevitably follows, insured and uninsured deposits are withdrawn
TD is wise to drop the FHN bid. Why buy now at an “expensive” price when you can pick it up for pennies on the dollar later
The obvious answer is for the Fed to throw more gasoline on the fire and raise rates and run down the balance sheet! NOT!For all the experts out there blathering about inflation. Wake up! You are fighting the last war. Look with your eyes. When owners equivalent rent is priced in the inflation stats correctly very soon and inflation comes down you can cease to worry. But you should worry about the banking system, commercial real estate and cyclical industries running into grave problems. Oh yeah and a credit crunch debacle, including a US debt payment holiday…
An idea/concept worth considering is a 3-6 month moratorium on short selling the stocks of regional banks. Because any short attack on a regional bank is immediately hyped by financial media which leads to deposit outflows and crisis of confidence: self-fulfilling prophecy. SEC should definitely restore uptick rule.
Like that idea a lot.
Am I wrong in sensing that there are people hunting prospective victims to attack with shorts and media lies and Regional Banks which let themselves get in a somewhat precarious financial position are now the ‘huntees’?
If we (Federal Govt) are going to guarantee all deposits why wouldn’t we just create and transition to banking utilities and if any private or shadow banks that want to continue operations then they are on their own (like any other corporation)?
As goes deposits, so goes lending. If you move deposits from banks to some other entity, then banks can’t make loans.