Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Memetrics
novahockey
quarterback
ScottC
yellojktVital Statistics:
| Last | Change | |
| S&P futures | 3,942 | -2.5 |
| Oil (WTI) | 65.67 | -1.07 |
| 10 year government bond yield | 3.38% | |
| 30 year fixed rate mortgage | 6.42% |
Stocks are lower as investors digest the Credit Suisse deal. Bonds and MBS are up.
Credit Suisse was bought by rival UBS over the weekend at less than half of its closing price on Friday. The deal includes a credit line from the Swiss National Bank, which will also share in some of the credit losses if necessary. There is no shareholder vote for either side. The AT1 bonds (sort of like the CRT bonds Fannie and Freddie issued) will get wiped to zero, but the rest of Credit Suisse’s bonds should get paid off. Those bonds were widely held in Swiss pension funds, so that is really who is getting bailed out here.
New York Community Bank has agreed to purchase some of the assets of failed Signature Bank. The branches in New York will be re-branded as Flagstar. It looks like this rescue will cost the FDIC about $2.5 billion.
It still doesn’t look like anyone wants Silicon Valley Bank. A few observers considered Silicon Valley Bank to be in the subprime bank loan business, making loans to companies with good ESG scores that hemorrhaged cash. Regardless of how the Administration tries to spin it, this was a bailout of the US tech sector.
Global central banks have put together a dollar swap facility to improve liquidity in the banking system. It would “serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses.”
The week ahead will be all about the Fed meeting on Wednesday. As I discussed in my latest Substack article, the Fed is in a bind here. It is playing with fire if it continues to raise rates, yet inflation is nowhere near fixed. The real estate component of inflation is about played out, but the labor market remains tight.
Here is an excerpt from that piece:
The Fed (and global central banks in general) have painted themselves into a corner. Raising rates have blown up parts of the banking sector and they are playing with fire if they keep hiking. On the other hand, the labor market remains tight as a drum and workers are in the driver’s seat. The Fed was hoping to get unemployment up around 5%. That doesn’t appear to be in the cards. The Fed is probably going to have to start easing despite bad inflation numbers, and there is not a damn thing they can do about it.
Think about this: Treasuries have fallen far enough to blow some holes in banking balance sheets, and real interest rates are still negative. Sovereign Debt is wildly overvalued and valuations are still in bubble territory.
The Fed Funds futures see a 2/3 chance of a 25 basis point hike this week and a 1/3 chance on no hike. They also see that hike being reversed at the June meeting and three rate cuts by December.
The dot plot will be a wild card in this report. In December, the Fed saw the Fed Funds rate above 5% by the end of 2023. The Fed Funds futures see rates about 125 basis points lower. This will be the real wild card in the Fed meeting. If the Fed still has a dot plot that looks like the one below, then markets will have a conniption.
The big question for the mortgage business is what happens to MBS spreads? MBS spreads have blown out since the start of this banking crisis, although that probably has more to do with interest rate volatility than anything. The bond market just got whipsawed big time between the higher-than-expected inflation numbers and then the round of bank failures.
If RMBS were the asset class that blew up a lot of these banks, then it probably means that there will be supply as banks bite the bullet and try and unload paper to put into short term Treasuries. That can’t be good for mortgage rates, although I wonder if there simply isn’t going to be much of a bid in the market for 3% UMBS.
One other thing that is a given is that the party in the MSR space is over. If rates are falling, then servicing valuations will be falling too. There are a lot of people out there marking their servicing portfolios at 5.5x or higher.
Filed under: Economy |
All Things in Moderation 
Fucking zombie Reagan, man.
https://nypost.com/2023/03/19/new-york-times-spins-democratic-conspiracy-theory-as-fact/?utm_source=twitter_sitebuttons&utm_medium=site%20buttons&utm_campaign=site%20buttons
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I gotta believe a zombie William Casey could confirm this in a zombie deathbed confession to Bob Woodward.
Bob, bald in your court.
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Goddamn!
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Makes sense. Leftism is fundamentally a philosophy driven by resentment.
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Men being better women than women will never not be my favorite thing.
https://citizenfreepress.com/breaking/biological-man-wins-womens-200m-national-championship/
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Amazing, liturgy and all.
https://www.dailykos.com/stories/2023/3/19/2159184/-I-have-COVID-again-x1f922
Btw, the author thinks it’s possible to control 7 billion people.
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Taibbi’s latest is interesting:
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Gotta admit, for all Tiabbi has seen re government corruption, I’m baffled as to why he personally went all-in on getting the vaccine and boosters.
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He is still a leftie after all and believes in government. Maybe not this one, but in general.
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If THE WORST THING EVER is a political opponent holding office then maybe you should dilute that office holder’s power?
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If THE WORST THING EVER is a political opponent holding office then maybe you should dilute that office holder’s power?
The left is incapable of thinking that way. It isn’t in their DNA.
They control damn near every institution and they think they are the oppressed little guy speaking truth to power. I don’t get it, and after the past 6 years, I have no desire to. .
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“Gotta admit, for all Tiabbi has seen re government corruption, I’m baffled as to why he personally went all-in on getting the vaccine and boosters.”
For myself it was probably a generational thing. Being Gen X I still have memories of the vaccine efforts of the 1970’s to eliminate polio, mumps, measles, etc. and instinctively associated it with that.
Also I figured that if there was a real issue, it would be too big to cover up.
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I too am Gen X and was vaccinated as per whatever the school districts of California and Arizona required. That said, my parents were Very Serious Goldwater Republicans, and like him they are very conservative as well as very libertarian. I think that stemmed from both of them coming from Chicago and experiencing the Chicago Democratic regime. My paternal grandfather was also a non-degreed ombudsman for the IRS, so that also had an influence. I lost my Believe the Government cherry early on in life watching just how shitty, corrupt and incompetent public school teachers are, so while I hoped the vaccine would work I was and am awfully suspicious of the actual number of deaths around it (dying from vs dying with) and the incentives hospitals had in framing things as catastrophic.
This is a very long way around saying that I was highly suspicious of what was going on. I’m endlessly shocked that he and Greenwald are still lefties. Looking at the corruption they seem to see everywhere yet still believing that if the right people are in charge it will all work. That’s like thinking all Hell needs is ice.
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McWing:
That’s like thinking all Hell needs is ice.
Hahahah….I like that one.
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I can’t help but wonder what side effects he’s had and what source he’s listening to. Maybe he still trusted science when he got the shots……………….before he went anti-woke/government?
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Maybe all of these young people suddenly dropping dead had something to do with it.
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Oh please…………….do the research Brent. Are there risks of side effects…………..sure, are they significant and leading to serious outcomes and death…………nope!
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lms:
are they significant and leading to serious outcomes and death…………nope!
How would you know?
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I don’t remember all these people dropping dead, say 5 years ago. Do you?
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lms:
Maybe he still trusted science when he got the shots
Do you ever think outside of left-wing cliches?
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“I can’t help but wonder what side effects he’s had and what source he’s listening to”
He’s digging through the internal communications of Twitter and the government and various NGO’s regarding vaccine “misinformation” and comparing what they were saying publicly with what they were saying privately.
Whole thread is here, with the supporting documents:
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“Maybe he still trusted science when he got the shots……………….before he went anti-woke/government?”
lmsinca, I took the vaccines and I believe they are generally safe.
But I’m also now convinced that if they were determined not to be safe, that the government would lie about it rather than admit the truth. And they would tell themselves that they were doing it for noble reasons the entire time.
And that’s not a conspiracy theory, but based on the actual internal communications that have been released.
This isn’t about “trusting science” but rather trusting authority.
Consider how long it took for the government to admin the possible health effects of Agent Orange exposure or the burn pits in Iraq:
https://www.washingtonpost.com/world/2023/03/18/iraq-burn-pits-pact-act/
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But I’m also now convinced that if they were determined not to be safe, that the government would lie about it rather than admit the truth. And they would tell themselves that they were doing it for noble reasons the entire time.
Exactly. Preservation of power trumps all.
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Ultimately, “trusting science” is trusting what politicized “scientists” are claiming to be true. That seems a tough circle to square.
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Ultimately, “trusting science” is trusting what politicized “scientists” are claiming to be true. That seems a tough circle to square.
What do you get when you mix science and politics? politics.
And people aren’t “science deniers” when they call out the left’s bullshit.
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Brent:
And people aren’t “science deniers” when they call out the left’s bullshit.
I was going to say that virtually no one is actually a “science denier”, but there actually is one large group of people that routinely do deny plain scientific reality: pro-choice lefties.
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Not sure if any of you are interested but here is a fairly (IMO) scientific evaluation of the risk of infection versus the risk of vaccination.
https://www.cbsnews.com/news/covid-19-vaccines-myocarditis-heart-damage-infection-children/
The United States Vaccine Adverse Event Reporting System, or VAERS – which is an initial reporting system for vaccine side effects – is by itself inadequate to determine the rate of any vaccine-associated side effect. This is because any side effect can be reported, and verification of a reported event only takes place afterward by the Centers for Disease Control and Prevention.
That vetted data is then reported in more robust databases like the Vaccine Safety Datalink. A very small number of the myocarditis events following COVID-19 vaccination have resulted in significant long-term consequences like heart rhythm troubles. However, such cases do not reflect the majority.
Thankfully, severe myocarditis after mRNA vaccination for COVID-19 is extremely rare. A 2021 study from Nordic scholars, which looked at comparative risks of myocarditis and heart arrhythmia in patients who experienced myocarditis after COVID-19 infection versus immunization found that the risks vary significantly by age group.
This has been touted as a reason not to vaccinate healthy young men against COVID-19. The follow-up study, however, found that the comparative risks of negative outcomes were worse from myocarditis from COVID-19 infection and other viral myocarditis than from vaccination in all patients older than 12 years of age.
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lms:
but here is a fairly (IMO) scientific evaluation
And your opinion is based on what exactly?
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