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Investors reeled in their expectations for global central bank rate hikes, and bank stocks tumbled once again. Reuters GraphicsIn the money markets, a closely watched indicator of credit risk in the U.S. banking system edged up on Monday, as did other indicators of credit risk in the euro zone. The gap between two-year euro swap rates and two-year German bond yields , widened by around 20 basis points to 83 basis points, to the highest since Nov. 11. Reuters GraphicsIn Germany, two-year bond yields were last down over 40 basis points, much more than a drop of 24 basis points on swap rates. Back in late 2008, when failed investment bank Lehman Brothers collapsed, this swap rate went as negative as 300 bps.

☆ It's crystal clear now: More banks are going to fail
▼ + stars: | 2023-03-13 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +4 min

It is likely that more bank failures are coming after the collapse of Silicon Valley Bank. "There's no doubt in my mind: There's going to be more. Investors are clearly nervous about the potential for a cascade of bank failures, reflected in the stock price of a handful of regional banks on Monday. Biden, Yellen vow no bailoutsThough depositors have been made whole in both recent failures, banks and their shareholders should be prepared for the government to let them fail, and should not count on anything resembling a 2008-style bailout. "And the reforms have been put in place means that we're not going to do that again."

Responding to SVB’s failure, the central bank promised to make available additional liquidity to banks and other deposit-taking institutions. By reassuring depositors, the central bank aims to prevent runs on other institutions and contagion through the financial system. And by promising to buy high-quality assets at face value, the central bank is trying to forestall a fire sale that could depress valuations and become self-reinforcing. POLICY AND SUPERVISIONThe central bank’s intervention has highlighted the complex interaction between monetary policy and bank supervision. But given the spillovers between monetary policy and supervision, the offer of additional liquidity is probably not enough to insulate monetary policy from financial stability considerations.

☆ U.S. government steps in and says people with funds deposited at SVB will be able to access their money
▼ + stars: | 2023-03-12 | by ( Jeff Cox | ) www.cnbc.com time to read: +5 min

Those with money at the bank will have full access starting Monday. The Treasury Department designated both SVB and Signature as systemic risks, giving it authority to unwind both institutions in a way that it said "fully protects all depositors." The Fed facility will offer loans of up to one year to banks, saving associations, credit unions and other institutions. The SVB failure was the nation's largest collapse of a financial institution since Washington Mutual went under in 2008. Authorities had spent the weekend looking for a larger institution to buy SVB, but came up short.

☆ 3 Failed Banks This Year Were Bigger Than 25 That Crumbled in 2008
▼ + stars: | 2023-03-11 | by ( Karl Russell | Christine Zhang | ) www.nytimes.com time to read: +6 min

The three banks that failed this year were worth more in inflation-adjusted assets than the 25 that collapsed in 2008. Before Silicon Valley Bank, the last bank to fail was in late 2020, as the coronavirus was ravaging the country. First Republic Bank ranks 14th, Silicon Valley Bank ranks 16th and Signature Bank ranks 29th. Silicon Valley Bank’s chief executive, Greg Becker, was a strong supporter of the move. In a review of the Fed’s oversight of Silicon Valley Bank released on Friday, Michael S. Barr, the central bank’s vice chair for supervision, said the Fed would “re-evaluate” its rules for banks that were similar in size to Silicon Valley Bank.

☆ Investors implore the government to step in after Silicon Valley Bank failure
▼ + stars: | 2023-03-11 | by ( Matt Rosoff | ) www.cnbc.com time to read: +5 min

Big names in Silicon Valley and the finance sector are calling publicly for the federal government to push another bank to assume Silicon Valley Bank's assets and obligations after the financial institution failed on Friday. But the vast majority of SVB's customers were businesses that had more than that on deposit at the bank. As of December, more than 95% of the bank's deposits were uninsured, according to regulatory filings. Investors are concerned that these failures could reduce confidence in the banking sector, particularly mid-sized banks with under $250 billion in deposits. "This was a hysteria-induced bank run caused by VCs," Ryan Falvey, a fintech investor at Restive Ventures, told CNBC on Friday.

☆ Paul Krugman says Silicon Valley Bank could've been called the 'Schmoozing and Vibes Bank,' but it's probably not another 'Lehman moment'
▼ + stars: | 2023-03-11 | by ( Ryan Hogg | ) www.businessinsider.com time to read: +2 min

Paul Krugman said SVB maybe should have been called the "Schmoozing and Vibes Bank." As far as I can tell, it was just unusually good at cultivating relationships with, um, Silicon Valley, specifically VC," Krugman said. "Maybe it should have been called Schmoozing and Vibes Bank." While this created huge problems for SVB, Krugman believed there was little chance of contagion to other banks. The Nobel Prize-winning economist said he did worry about the effects of SVB's collapse on the broader VC ecosystem.

☆ Billionaire investor Bill Ackman says feds 'screwed up' handling of Silicon Valley Bank collapse, warns they have '48 hours to fix a soon-to-be-irreversible mistake'
▼ + stars: | 2023-03-11 | by ( Aaron Mcdade | ) www.businessinsider.com time to read: +4 min

Billionaire investor Bill Ackman posted a lengthy tweet about the Silicon Valley Bank collapse Saturday. Ackman criticized the response of the federal government and its lack of monitoring SVB for risk. He said the government has "about 48 hours to fix a-soon-to-be-irreversible mistake" with its handling of SVB. "The gov't has about 48 hours to fix a-soon-to-be-irreversible mistake," Ackman tweeted in a lengthy post Saturday morning. In Ackman's view, this could lead to the collapse of several other smaller banks around the country.

☆ Run on Silicon Valley Bank injects some panic into an already slumping stock market
▼ + stars: | 2023-03-11 | by ( Michael Santoli | ) www.cnbc.com time to read: +8 min

The charts suggest that breaking the December low in the S & P 500 around 3765 – down just 2.5% from here – would lose the bullish case a lot more credibility than has been surrendered so far. Of course, fears of contagion can outrun the facts and sometimes can become self-fulfilling, but the S & P 500 has (for now) simply backslid to a nine-week low. Jason Hunter, technical strategist at JP Morgan, had been expecting "a weakening corporate earnings environment would eventually take the narrative away from the Fed driven rates market. In the past week Apple shares lost about a third of what the S & P 500 did. Inflation has been at generational highs for two years as it was not then, and the labor market wasn't nearly as tight.

☆ CEO of failed Silicon Valley Bank no longer a director at SF Fed
▼ + stars: | 2023-03-10 | by ( Michael S. Derby | ) www.reuters.com time to read: +2 min

March 10 (Reuters) - The chief executive officer of failed Silicon Valley Bank, Greg Becker, is no longer on the board of directors at the Federal Reserve Bank of San Francisco. The spokesperson declined to say how Becker exited the San Francisco Fed board. Becker served as a Class A director at the San Francisco Fed, one of three finance executives representing member banks in the San Francisco Fed district. The 12 regional Federal Reserve banks are quasi-private institutions overseen by the Fed in Washington. The directors of the Fed banks have been in the spotlight in recent years as the central bank has faced criticism that bank directors lacked racial and gender diversity and were too weighted towards the business and banking community.

☆ Silicon Valley investors and founders express shock over SVB's collapse, describe struggles to get money out
▼ + stars: | 2023-03-10 | by ( Jonathan Vanian Ashley Capoot Jordan Novet Annie Palmer | Jonathan Vanian | Ashley Capoot | ) www.cnbc.com time to read: +9 min

Nikolas Kokovlis | Nurphoto | Getty ImagesVenture capitalists and technology executives are scrambling to make sense and account for the potential repercussions of the sudden implosion of Silicon Valley Bank on Friday. The Federal Deposit Insurance Corp. said Friday that U.S. federal regulators shut down Silicon Valley Bank , the premiere financial institution for Silicon Valley tech startups for the past 40 years. On Friday, Yang returned to the Silicon Valley Bank branch 15 minutes before it opened to remove the remaining money. One person showed a tweet on their phone suggesting that bank employees had been instructed not to come to work. Watch: CEO's react to the closure of Silicon Valley Bank

☆ 'Big Short' investor Michael Burry issues a grave warning after Silicon Valley Bank's stock rout: 'It is possible today we found our Enron'
▼ + stars: | 2023-03-10 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

'Big Short' legend Michael Burry just compared Silicon Valley Bank to Enron. The bank's stock plunged 60% Thursday as its parent company offloaded shares after massive bond losses. "It is possible today we found our Enron," the 'Big Short' investor said Thursday in a now-deleted Tweet, referencing the scandal-hit energy firm that collapsed during the early 2000s. Enron collapsed as the dot-com bubble burst in the early 2000s, with the tech-heavy Nasdaq Composite index plunging 78% in just over two years. The bank's updated investor deck, which was filed Wednesday, showed that the company's $21 billion bond portfolio had a yield of 1.8% and an average duration of just over three years.

☆ The Second-Biggest Bank Failure
▼ + stars: | 2023-03-10 | by ( Karl Russell | Christine Zhang | ) www.nytimes.com time to read: +5 min

A bar chart of U.S. bank failures since 2001, showing that Silicon Valley Bank’s collapse was the second-biggest in U.S. history in terms of assets. Before Silicon Valley Bank, the last firm to fail was in late 2020, as the coronavirus was ravaging the country. It’s unclear whether the collapse of Silicon Valley Bank will spread to the broader industry. Silicon Valley Bank 209 17. Silicon Valley Bank 209 Fifth Third Bank 17.

☆ Lehman Brothers' European unit loses bid to recoup $485 mln from bond insurer
▼ + stars: | 2023-03-09 | by ( Jonathan Stempel | ) www.reuters.com time to read: +2 min

NEW YORK, March 9 (Reuters) - A New York judge rejected a bid by the former Lehman Brothers' bankrupt European unit to claw back $485 million from bond insurer Assured Guaranty Ltd (AGO.N) over transactions that were canceled amid the global financial crisis. In a decision on Wednesday, Justice Melissa Crane of a New York state court in Manhattan said Assured's AG Financial Products unit instead deserved to recover about $20 million from Lehman Brothers International (Europe). "Meanwhile, Assured's valuation was reasonable and calculated in good faith." The Sept. 15, 2008 bankruptcy of Lehman Brothers Holdings Inc - once Wall Street's fourth-largest investment bank - was one of the major triggers of that year's financial crisis. The case is Lehman Brothers International (Europe) v. AG Financial Products Inc, New York State Supreme Court, New York County, No.

☆ Credit Suisse delays filing its annual report, reviving fears about the Swiss bank's finances
▼ + stars: | 2023-03-09 | by ( George Glover | ) www.businessinsider.com time to read: +4 min

Credit Suisse has delayed filing its annual report after a call from the US financial watchdog. "Management believes it is prudent to briefly delay the publication of its accounts in order to understand more thoroughly the comments received," Credit Suisse said. Credit Suisse ADRs have plunged 61% over the past year, with a restructuring plan announced on October 27 also failing to reassure markets of the bank's resilience. The SEC's late call isn't Credit Suisse's only regulatory worry. Read more: Credit Suisse is fending off concerns about its financial health, fanning fears of another Lehman Brothers moment that could roil the global financial system.

☆ Stocks may crash 30% in 60 days as Americans run short of cash and investors jump ship, a markets guru says
▼ + stars: | 2023-03-09 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +3 min

US stocks could plummet as much as 30% over the next two months, Larry McDonald said. "The Bear Trap Report" founder sees higher interest rates choking demand and hammering the economy. McDonald also predicts investors will swap stocks for bonds to earn higher yields. McDonald estimated that every 1% increase in rates translates into a $50 billion rise in costs for middle-class Americans. He noted that interest rates on US auto loans are approaching 14%, and nearly 20% of those loans cost over $1,000 each month.

☆ How universities became giant piggy banks for hedge-fund billionaires
▼ + stars: | 2023-03-08 | by ( Catherine Liu | ) www.businessinsider.com time to read: +14 min

The move also marked the beginning of a new way to manage endowment funds. The arrangement has been a boon for the hedge-fund managers who received university endowment cash, but the benefits for the schools are trickier to parse. As Eaton put it in his book, universities directed funds to "wherever those allocations would generate the largest further investment returns." Eaton estimated in 2017 that tax breaks for university endowments cost federal coffers up to $19 billion a year. As the influence of billionaires and hedge-fund managers has grown, universities have moved further away from their ultimate goal: educating people.

☆ FTX's lawyers and advisers cost $38 million for a month of work - and the bankrupt crypto exchange's new CEO charged $305,000 for February
▼ + stars: | 2023-03-07 | by ( Phil Rosen | ) www.businessinsider.com time to read: +2 min

The army of professionals working with FTX billed $38 million in expenses for January. FTX CEO John Ray III submitted a bill for $305,565 for the month of February. Those three firms have over 180 lawyers and over 50 other staffers working on the FTX case, per the CoinDesk report. Sullivan & Cromwell billed 14,569 hours of work in January for a total of $16.8 million. Meanwhile, FTX's trading arm sued Grayscale this week in a bid to claw back $250 million to repay customers.

☆ FTX might not have been the only crypto exchange using customer money for other things
▼ + stars: | 2023-03-02 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

As if the universe knew that I hadn't written a crypto newsletter in some time, here we go: Binance, the world's largest crypto exchange, has been under some scrutiny this week. The world's largest crypto exchange reportedly transferred nearly $1.8 billion in stablecoin collateral to hedge funds, the report said. Any move by Binance to shuffle customer money around isn't exactly illegal, but the risks are apparent in the wake of the FTX disaster, part of which involved the exchange using customer money for making big bets via its affiliated trading arm. That account, Reuters reported, was used to send $400 million to a trading firm managed by Zhao. In other news:Traders work on the main trading floor of the New York Stock Exchange March 21, 2007.

☆ 3 reasons why the stock market has been incredibly resilient in the face of an aggressive Fed, according to JPMorgan
▼ + stars: | 2023-03-02 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

There has been remarkable resilience in the stock market despite soaring interest rates and stalling earnings growth. Excess cash savings and a solid credit market have helped prop up the stock market, according to JPMorgan. These are the three reasons why the stock market has been so resilient despite an aggressive Fed. For more than a decade, consumers were able to take advantage of near-zero interest rates and score 30-year fixed mortgages at less than 4%, while businesses locked in long-term debt at low interest rates. Headroom in the equity risk premiumThe equity risk premium is the excess return earned in the stock market relative to the risk-free rate.

☆ How the Turkey earthquake caused thousands of aftershocks
▼ + stars: | 2023-03-01 | by ( ) www.reuters.com time to read: +11 min

10,000 tremors How Turkey has been rattled by aftershocks since the Feb. 6 earthquakeThousands of earthquakes struck southern Turkey in the weeks after a 7.8 magnitude earthquake on Feb. 6, killing more than 50,000 people in Turkey and northwest Syria. Chart shows about ten thousand earthquakes that have been recorded in southern Turkey since a 7.8 magnitude earthquake occurred on February 6. The Turkey quake also triggered a magnitude 7.5 earthquake that caused a separate rupture in the Earth’s surface, which in turn caused thousands of aftershocks. Domino effect Seismologists define aftershocks as temblors triggered by a large earthquake, close in time and location. Chart shows aftershocks that occurred in 24 hours after the 6.4 magnitude earthquake in southern Turkey within 30 kilometers around the city of Antakya.

☆ Revisiting JPMorgan’s innovative Cazenove deal
▼ + stars: | 2023-02-24 | by ( Peter Thal Larsen | ) www.reuters.com time to read: +6 min

JPMorgan avoided most of these problems by structuring its deal as a joint venture with Cazenove. Though the corporate entity called JPMorgan Cazenove was quietly wound down a few years ago, the name still graces the U.S. group’s UK banking business. At the time of the JPMorgan deal, Cazenove acted as broker to almost half of the companies in the FTSE 100 Index (.FTSE). By 2009, the enlarged business reported a pre-tax profit of 280 million pounds. The Cazenove deal still stands as a case study of how to buy an investment bank without destroying it.

☆ Wall Street analysts are warning stocks are about to come crashing down
▼ + stars: | 2023-02-22 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

Today's Fed minutes release should provide more insight on what's to come in March. So according to Wilson, stocks have entered this death zone after climbing too high too fast in hopes the Federal Reserve is about to pull back on its aggressive monetary policy. He's reiterated several times this year that the rally will lose steam, and he expects sticky inflation to push the Fed to hold interest rates higher for longer. The bank's analysts now see the Fed raising rates by 25 basis points in June, which would bring the terminal rate to a target range of 5.25-5.5%. "As [stocks] have reached even higher levels, there is now talk of a "no landing" scenario – whatever that means," Wilson noted.

☆ Indian tycoon Gautam Adani dismisses market volatility as 'temporary'
▼ + stars: | 2023-02-15 | by ( Sumathi Bala | ) www.cnbc.com time to read: +3 min

Art school teacher Sagar Kambli gives final touches to a painting of Indian businessman Gautam Adani (L) highlighting the ongoing crisis of the Adani group in Mumbai on February 3, 2023. Indranil Mukherjee | Afp | Getty ImagesIndian billionaire Gautam Adani has downplayed the recent market volatility of Adani Group's shares as "temporary." The Adani Group has denied those accusations, and said it was a "calculated attack on India." Adani flagship earningsOn Tuesday, Adani Enterprises reported a profit after tax of nearly $100 million for the October to December quarter. Shares of Adani Enterprises last traded about 3% higher Wednesday on National Stock Exchange of India.

☆ Crypto: Regulators are cracking down as FTX fallout casts a shadow over digital assets
▼ + stars: | 2023-02-14 | by ( Allison Morrow | ) edition.cnn.com time to read: +5 min

New York CNN —When FTX collapsed in November, it was a seismic event for the crypto industry. On Monday, New York regulators ordered blockchain firm Paxos to stop issuing BUSD, aka Binance USD, citing “several unresolved issues” related to Paxos’ oversight of its relationship with crypto exchange Binance. Investors typically buy them to store money and facilitate deals within the cryptocurrency infrastructure, making them a bedrock of the crypto ecosystem. “Regulation by enforcement is puzzling for crypto enthusiasts,” said Marcus Sotiriou, market analyst at digital asset broker GlobalBlock, in a note. In January, regulators warned US banks and other market participants about the risks of fraud, volatility, and shoddy risk management in the crypto world.

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