Thanks Peter & Team. Great insights again! Your investment time horizon and risk profile is perfect for investors who want to get the best medium term entry and exit points.
The paper “Monetary Tightening and U.S. Bank Fragility in 2023” does not mention the fact that the Fed is backstopping underwater assets by lending at par value against them and has said in systemically important cases, they will make depositors whole (which imo, is nearly all cases). The risk of more bank runs is certainly possible in the future, but the Fed did put in some very strong backstops that should prevent another HTM asset/liquidity run at least this year so they could raise rates futher if they want to. However, banks know that the protection is temporary and are tightening standard as you’ve shown.
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I’m not worried about another SVB. Just even faster tightening of lending standards is plenty to worry about.
Thanks Peter & Team. Great insights again! Your investment time horizon and risk profile is perfect for investors who want to get the best medium term entry and exit points.
Every pullback in IEF was met with heavy buying today are we getting closer to opening a position?
The paper “Monetary Tightening and U.S. Bank Fragility in 2023” does not mention the fact that the Fed is backstopping underwater assets by lending at par value against them and has said in systemically important cases, they will make depositors whole (which imo, is nearly all cases). The risk of more bank runs is certainly possible in the future, but the Fed did put in some very strong backstops that should prevent another HTM asset/liquidity run at least this year so they could raise rates futher if they want to. However, banks know that the protection is temporary and are tightening standard as you’ve shown.
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I’m not worried about another SVB. Just even faster tightening of lending standards is plenty to worry about.