Brief Banking Crisis Update: Luongo Update

Yesterday I presented some alternative views. Today, it’s possible to see some clarity emerging after the weekend developments. I turn here to Tom Luongo’s update views this morning, and especially because his take has been consistent. I also note that Danielle DiMartino Booth, presumably with insider input, believes that Powell is not “pivoting.” Short and sweet:

Danielle DiMartino Booth

@DiMartinoBooth

·

11h

RECAP

@profplum99 notes banks followed Fed into QE purchases (see @zerohedge chart) Insurmountable, unhedgeable HTM losses smoked SVB the most, quickening deposit bleed. Runs forced @FDIC @federalreserve @USTreasury to make depositors whole & screw share/bond holders & creditors.

Not as short:

Tom Luongo (Head Sneetch)

It's all here from the @washingtonpost:
Yellen wants to bail out all depositors up to an unlimited amount, blowing away FDIC limits, spending money she doesn't have.

The Fed will give loans on generous terms to provide domestic bank liquidity.

washingtonpost.com/us-policy/2023…

It isn't Yellen's job to bail out depositors. In fact, it is EXPRESSLY NOT HER JOB to obligate taxpayer funds to bailout bank depositors.

Note that the WaPo runs a picture from October to suggest Yellen and Powell are on board with this idea.

The Fed is not. 

Yellen is clearly trying to force the Fed to pivot and go back to the zero-bound with this. And bail out those that were funding the undermining of US institutions and war.

Who in their right mind thinks the "little guy" has more than $250k in deposits? 

OK, that’s all pretty predictable. Yellen is trying to preserve the Globalist climate agenda and save the Greenies who banked at SVB. Now some more big picture. We start with expansion on the Fed providing loans to banks:

Tom Luongo (Head Sneetch)

@TFL1728

Replying to

@DeonOpperman1

It will be to provide liquidity to keep the US banks that are systemically important solvent, while continuing to raise rates. Yellen can't fund WWIII with rates at 7%.

And now this exchange:

Tom Luongo (Head Sneetch) @TFL1728

@DeonOpperman1 I'm saying a lot of the contagion risk (to where exactly) has already been walled off. The US banks stopped taking EU debt as repo collateral pre-COVID. This is why the SOFR blowout of Sept/19. You know what may happen? An imploding eurobanking system w/o contagion.

Deon Opperman

@DeonOpperman1

Replying to

@TFL1728

Thanks for reply. I think a Euro banking system collapse is high probability. Credit Suisse is going down for sure. Italy, Spain, Greece all basket cases. Going to be interesting to see if that could be contained in Europe.

Continuing on that theme (and editing for readability—you know where to go):

Tom Luongo (Head Sneetch)

More offshore dollar banks collapsing. Not the Fed's problem.

Quote Tweet

John Olooney

Is it the next phase we see beginning.

First Silicon Valley now this:

https://dailymail.co.uk/news/article-10967735/Australian-bank-Volt-collapses-140-workers-losing-jobs.html

Maybe Putin can rescue some of these folks? He’s gotta be LHAO:

Tom Luongo (Head Sneetch)

Signpost

Quote Tweet

Aleksandr Volodarsky

Mar 12

We are a Ukrainian startup that had all of our funds in SVB.

Whatever happens on Monday, we should be prepared to move forward with just $250k from FDIC.

Please, share this message. This will help us bring new clients and keep operating to support the engineers and startups.… Show more

And now:

Tom Luongo (Head Sneetch) @TFL1728

Huh... you don't say? The 2/10 is normalizing? Right in line with the BoJ, SIVB and closing off more eurodollar funding.

And don’t forget that the bigger picture is more than just arcane financial stuff. It’s war. Foreign—as referenced above—and domestic. Meaning, politics:

Tom Luongo (Head Sneetch) @TFL1728

Hey @chuckschumer i have three words for you "Drip, Drip, Drip," Love @SpeakerMcCarthy

zerohedge.comMcCarthy Says He Will “Slowly Roll Out” Jan. 6 Footage To News Outlets“I think transparency is best and allow the American public to see it all...”

Astrid Wilde ☼ @astridwilde1

the Fed’s new program means banks can now borrow against their long duration bonds at par without limit. there is now zero risk for moving everything out to long duration and huge rewards for locking in 4.5% coupons for 10+ years. US banking just unlocked new levels of degeneracy

Luongo responds:

Tom Luongo (Head Sneetch)

@TFL1728

Yes, this closes the holes in the US banking system's balance sheet after raising rates aggressively.

You know who doesn't get to participate in this?

The Rest of the World. Again, the target is the Leveraged Offshore Banking System.

If Luongo is correct, this all should mean that Our Gangsters have had enough of the Wokesters and funny money running America down. They want MAGA, but maybe without Trump—but who knows? They’re about watching out for Numero Uno, and that means the US banking system, not parasites like the Davos crowd. They can do a deal with Putin, but they may need to do some regime changing right here at home first.

May you live in interesting times.