The big news in the Middle East is what looks like reconciliation between Saudi Arabia and Iran—two regional Muslim heavyweights who have been at dagger point for decades. In a China brokered deal, the two countries are re-establishing diplomatic ties and opening embassies. This follows similar reconciliation between the Saudis and Egypt on the one hand and Syria on the other.
Just watched the Tucker segment on SVB. I think he is wrong on this. SVB didn't blow up from poor management. It blew up because interest rates went up. Its assets were performing as expected. Sure it was going to struggle as all it's customers were going to churn money and not be able to fundraise. As for the executives selling stock I don't expect much to come of it. I'll wait for the lawsuits ( there are always lawsuits) but it looks like all the problems were publicly available. And the regulators Bravo well done. They managed to corral half of the VC contagion in one box and let it explode only injure the people who made the bomb.
Both sides are using the collapse of SVB. The collapse went a lot faster due to the nature of the depositors, which made for a faster bank run.
The biggest loser of the Saudi Iran deal is the US. KSA (kingdom of Saudi Arabia) leadership is showing they don’t trust the US to protect them, and rather fear it. And with the Biden’s Administration’s continuing pushing big color revolutions and regime change, this makes perfect sense. Plus throw in the intense pushing lgbt / woke ideologies and for a traditional / conservative run country, you know you are on the Biden Administration’s enemies list. Or if your countries leadership disagrees with the US.
I just realized- The Biden Administration has managed to alienate / upset / ostracize every single Middle Eastern Power! They are actively plotting against Netanyahu. And shut down a proposed pipeline from Israel to Crete for natural gas. KSA was labeled as run by a murderer / thugs. Syria is partially occupied by the US, heavy sanctions, and the Us still wants regime change. Iran is under heavy sanctions. Iraq is now selling oil in Yuan. Libya is still a mess, and a huge example of US Hubris. Egypt the Obama Administration backed the Muslim Brotherhood, which got over thrown by the current regime. Turkey is being bribed by the Russians with making lots of money off sanction busting, and a potential energy distribution power house.
Regarding the SVB collapse some things are known that can contribute to speculation as to responsibility and who will benefit (without reaching final conclusions):
1) JPM and Jamie Dimon may not have been the primary trigger for the SVB collapse (that was the bank itself and its unrealized losses in long bonds crashing into its need for cash reserves) but they/he certainly took quick advantage of it: "Prominent venture capitalists advised their tech startups to withdraw money from Silicon Valley Bank, while mega institutions such as JP Morgan Chase & Co sought to convince some SVB customers to move their funds Thursday by touting the safety of their assets. Let us get this straight: the largest US commercial bank was actively soliciting the clients of one of its biggest competitors, and the 16th largest US bank, knowing full well deposit flight would almost certainly lead to the collapse of a bank which courtesy of fractional reserve banking, had only modest cash to satisfy deposit demands: certainly not enough to meet $42 billion in deposit outflows."
It is also worth noting that JPM alone, of all the major national and regional commercial banks, had its stock price go higher on the SVB news. So lots of people knew about this being of potential benefit to them, and them specifically.
2). Many, many people want the Fed to pivot (including, of course, the Davos group), Danielle DiMartino Booth's views on that possibility notwithstanding. Some are speculating that the U.S. government will step in and bail out SVB as soon as over the weekend. A measure of that desire and expectation is as follows:
"The 'panic' across markets had a dramatic effect on Fed rate trajectory expectations with the Fed's terminal rate expectations plunging over 55bps since the post-Powell spike earlier in the week, and 40bps of rate-cuts are now priced-in by year-end..." (https://cms.zerohedge.com/s3/files/inline-images/bfm51E3.jpg?itok=CZR4DtNL).
In this sense there would be plenty of motive for the anti-Fed people (in both the U.S. and Europe) to use this event to bend the Fed to their will. Coincidentally (perhaps) from what I have read SVB is known as being among the very wokest banks.
Mercouris reminded listeners of Zhou at the SOTU shouting: Who would want to be Xi Jinping? Then the two Alexes had a good laugh comparing Zhou's foreign policy failures to those of other presidents, with Mercouris saying, in terms of damage to the US, those other presidents aren't even in the game with Zhou.
After decades of KSA --USA alliance, I am doubtful that a couple years of the Zhou regime has ripped this long-standing relationship asunder.
After decades of KSA--IRGC enmity, I am doubtful that a couple years of PRC mediation has brought the two Muslim states, shia and sunni, to the kumbaya campfire.
In neither case is there mention of the Abraham Accords, which presumably remain in effect.
Persians gotta be Persian, the ultimate rug merchants.
Turkey ? Erdoğan is still young at 69 years (birthday 26 Feb). Dreams of the Neo-Ottoman empire dance in his head. How that fits with the Persians and KSA is still TBD. But, he's not as young as MBS.
MBS (Mohammed bin Salman Al Saud) at 37, has lots of runway in front of him.
Garland Nixon just gave a good lesson on Yemen and how it relates to Iran/Saudi. Of course the globalists are all over it since it involves oil and how to get it out of those ports with narrow straights. This alliance with Iran and Saudi would lay waste to the psychos plan to get an Iran vs Saudi war going. We should now watch to see if they tame Yemen and what Israel ends up with. And the Turkey lynchpin will be pivotal for stabilizing the region. Now the US needs to get out of Syria willingly or...
This bank grew really fast. 2018: $57 billion. 2021: $211 billion. No mergers that I can see - just organic. Banks don’t grow that fast. My take: The SF Fed and the rating agencies were asleep.
Just watched the Tucker segment on SVB. I think he is wrong on this. SVB didn't blow up from poor management. It blew up because interest rates went up. Its assets were performing as expected. Sure it was going to struggle as all it's customers were going to churn money and not be able to fundraise. As for the executives selling stock I don't expect much to come of it. I'll wait for the lawsuits ( there are always lawsuits) but it looks like all the problems were publicly available. And the regulators Bravo well done. They managed to corral half of the VC contagion in one box and let it explode only injure the people who made the bomb.
Both sides are using the collapse of SVB. The collapse went a lot faster due to the nature of the depositors, which made for a faster bank run.
The biggest loser of the Saudi Iran deal is the US. KSA (kingdom of Saudi Arabia) leadership is showing they don’t trust the US to protect them, and rather fear it. And with the Biden’s Administration’s continuing pushing big color revolutions and regime change, this makes perfect sense. Plus throw in the intense pushing lgbt / woke ideologies and for a traditional / conservative run country, you know you are on the Biden Administration’s enemies list. Or if your countries leadership disagrees with the US.
I just realized- The Biden Administration has managed to alienate / upset / ostracize every single Middle Eastern Power! They are actively plotting against Netanyahu. And shut down a proposed pipeline from Israel to Crete for natural gas. KSA was labeled as run by a murderer / thugs. Syria is partially occupied by the US, heavy sanctions, and the Us still wants regime change. Iran is under heavy sanctions. Iraq is now selling oil in Yuan. Libya is still a mess, and a huge example of US Hubris. Egypt the Obama Administration backed the Muslim Brotherhood, which got over thrown by the current regime. Turkey is being bribed by the Russians with making lots of money off sanction busting, and a potential energy distribution power house.
Regarding the SVB collapse some things are known that can contribute to speculation as to responsibility and who will benefit (without reaching final conclusions):
1) JPM and Jamie Dimon may not have been the primary trigger for the SVB collapse (that was the bank itself and its unrealized losses in long bonds crashing into its need for cash reserves) but they/he certainly took quick advantage of it: "Prominent venture capitalists advised their tech startups to withdraw money from Silicon Valley Bank, while mega institutions such as JP Morgan Chase & Co sought to convince some SVB customers to move their funds Thursday by touting the safety of their assets. Let us get this straight: the largest US commercial bank was actively soliciting the clients of one of its biggest competitors, and the 16th largest US bank, knowing full well deposit flight would almost certainly lead to the collapse of a bank which courtesy of fractional reserve banking, had only modest cash to satisfy deposit demands: certainly not enough to meet $42 billion in deposit outflows."
(https://www.zerohedge.com/markets/record-bank-run-drained-quarter-or-42-billion-svbs-deposits-hours-leaving-it-negative-1bn)
It is also worth noting that JPM alone, of all the major national and regional commercial banks, had its stock price go higher on the SVB news. So lots of people knew about this being of potential benefit to them, and them specifically.
2). Many, many people want the Fed to pivot (including, of course, the Davos group), Danielle DiMartino Booth's views on that possibility notwithstanding. Some are speculating that the U.S. government will step in and bail out SVB as soon as over the weekend. A measure of that desire and expectation is as follows:
"The 'panic' across markets had a dramatic effect on Fed rate trajectory expectations with the Fed's terminal rate expectations plunging over 55bps since the post-Powell spike earlier in the week, and 40bps of rate-cuts are now priced-in by year-end..." (https://cms.zerohedge.com/s3/files/inline-images/bfm51E3.jpg?itok=CZR4DtNL).
In this sense there would be plenty of motive for the anti-Fed people (in both the U.S. and Europe) to use this event to bend the Fed to their will. Coincidentally (perhaps) from what I have read SVB is known as being among the very wokest banks.
So, evidence on both sides. Time will tell.
Forbes, I doubt if that is it. I think lots of people in any job are too lazy to make a hard call. Examiners and analysts are no different.
Danielle DiMartino Booth
@DiMartinoBooth
EVERY BIT OF EASING FINANCIAL CONDITIONS PREDICATED ON BASELESS ASSUMPTIONS THAT POWELL WILL PIVOT FURTHER FUELS POWELL’S RESOLVE TO NOT PIVOT.
(Market participants just don’t get it…)
I don't really understand the dynamics of these banking power plays, but the Iran, KSA, China deal i do.
It is a big fat middle finger to the USA.
All 3, as you wrote, knew what the consequences were. And a very pissed off USA is the biggest of that list.
Mercouris reminded listeners of Zhou at the SOTU shouting: Who would want to be Xi Jinping? Then the two Alexes had a good laugh comparing Zhou's foreign policy failures to those of other presidents, with Mercouris saying, in terms of damage to the US, those other presidents aren't even in the game with Zhou.
But, Jim Cramer said SV Bank was a buy!
https://twitter.com/GRDecter/status/1634060787802071040?cxt=HHwWgICz5Z_orK0tAAAA
Just like he did with Bear Stearns.
https://twitter.com/GRDecter/status/1634061989247954944?cxt=HHwWgMC9oZeura0tAAAA
After decades of KSA --USA alliance, I am doubtful that a couple years of the Zhou regime has ripped this long-standing relationship asunder.
After decades of KSA--IRGC enmity, I am doubtful that a couple years of PRC mediation has brought the two Muslim states, shia and sunni, to the kumbaya campfire.
In neither case is there mention of the Abraham Accords, which presumably remain in effect.
Persians gotta be Persian, the ultimate rug merchants.
Turkey ? Erdoğan is still young at 69 years (birthday 26 Feb). Dreams of the Neo-Ottoman empire dance in his head. How that fits with the Persians and KSA is still TBD. But, he's not as young as MBS.
MBS (Mohammed bin Salman Al Saud) at 37, has lots of runway in front of him.
Interesting, but not a definitive realignment.
Garland Nixon just gave a good lesson on Yemen and how it relates to Iran/Saudi. Of course the globalists are all over it since it involves oil and how to get it out of those ports with narrow straights. This alliance with Iran and Saudi would lay waste to the psychos plan to get an Iran vs Saudi war going. We should now watch to see if they tame Yemen and what Israel ends up with. And the Turkey lynchpin will be pivotal for stabilizing the region. Now the US needs to get out of Syria willingly or...
This bank grew really fast. 2018: $57 billion. 2021: $211 billion. No mergers that I can see - just organic. Banks don’t grow that fast. My take: The SF Fed and the rating agencies were asleep.