{"id":1455695,"date":"2024-02-06T21:00:00","date_gmt":"2024-02-07T02:00:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1455695"},"modified":"2024-02-06T21:00:00","modified_gmt":"2024-02-07T02:00:00","slug":"bank-blow-up-butterflies-spark-bid-for-bonds-bullion-bitcoin","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/bank-blow-up-butterflies-spark-bid-for-bonds-bullion-bitcoin\/1455695\/","title":{"rendered":"Bank Blow-Up ‘Butterflies’ Spark Bid For Bonds, Bullion, & Bitcoin"},"content":{"rendered":"

Bank Blow-Up ‘Butterflies’ Spark Bid For Bonds, Bullion, & Bitcoin<\/span><\/p>\n

\n

No major macro today but more jawboning overnight from Beijing sparked some global gains in stocks.<\/p>\n

China Small Caps were up 7% (but put in context, not so impressive)…<\/p>\n

<\/a><\/p>\n

However, today’s biggest newsmakers was FedSpeak, Yellen yellin’, and bank blow-ups…<\/p>\n

Take your pick:<\/p>\n

The Good: <\/strong>KASHKARI: 3M, 6M INFLATION RATES ‘BASICALLY THERE’ AT 2%<\/strong>; WE DO NOT THINK ABOUT POLITICS NOR UPCOMING ELECTION<\/em><\/p>\n

Bad<\/strong>: MESTER: EXPECT FED TO GAIN CONFIDENCE TO CUT ‘LATER THIS YEAR’, DON’T FEEL THERE’S ANY NEED TO RUSH RATE CUTS<\/strong>, NO URGENCY TO SLOW PACE OF BALANCE-SHEET REDUCTION NOW<\/em><\/p>\n

Ugly<\/strong>: YELLEN SAYS INCENTIVES TO MOVE AWAY FROM DOLLAR EXIST<\/strong>, NATURAL SANCTIONED COUNTRIES TRY WORKAROUNDS ON DOLLAR; BUT UNAWARE OF ANY DEEP THREAT TO THE DOLLAR<\/em><\/p>\n

But ugliest of all was the regional banking system.<\/strong><\/p>\n

The KBW Regional Banking Index is down 15% from its December highs (which had basically run all the way back up to the pre-SVB levels) but down 12% in the last 5 days…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

A few desks claimed that NYCB is ‘idiosyncratic<\/strong>‘…<\/p>\n

*NEW YORK COMMUNITY BANCORP SINKS 22% TO HIT LOWEST SINCE 1997<\/p>\n

<\/a><\/p>\n

…but to be frank, that’s just bullshit. It just happens to be the first domino to fall…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

With bank bewilderment building, traders bid for bonds<\/strong> (with the short-end outperforming 2Y -8bps, 30Y -5bps). However, yields are still higher on the week…<\/strong><\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

Bullion was also bid, with spot gold prices testing $2040…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

And so was black gold, with WTI back above $73…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

And crypto was bid.<\/p>\n

Yesterday saw the 7th straight day of net inflows to Bitcoin ETFs…<\/strong><\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

…and Bitcoin rallied today, but only modestly and within its recent range…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

…but Ethereum surged up to $2375…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

…with the ETHBTC pair rallying back above FOMC spike highs to two-week highs…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

\u00a0<\/span>Big-tech actually had a down-day today (but rates were lower…). Small Caps were best (Short squeeze) and The Dow and S&P managed gains with a late-day surge…<\/p>\n

<\/a><\/p>\n

MAG7 stocks drifted lower today…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

After topping 85 (RSI) on the ‘overbought scale last night, NVDA dared actually decline today (but not before it topped $700 overnight)…<\/p>\n

<\/a><\/p>\n

But ‘most shorted’ stocks were squeezed hard from get-go (supporting small caps despite the bank bloodbath)…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

Finally, as a reminder, Small banks are proper fucked without The Fed’s (soon to be killed) BTFP bailout facility (red line)…<\/strong><\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

…and one can’t help but notice the burgeoning balance sheet of the big banks – willing to scoop up small banks with the FDIC’s help?<\/p>\n

Don’t believe us? Here’s Jay Powell on Sunday: <\/a><\/p>\n

“We looked at the larger banks’ balance sheets, and it appears to be a manageable problem. There’s some smaller and regional banks that have concentrated exposures in these areas that are challenged.<\/strong><\/em><\/p>\n

…<\/em><\/p>\n

There will be expected losses.<\/em><\/strong><\/p>\n

It’s a sizable problem… it doesn’t appear to have the makings of the kind of crisis things that we’ve seen sometimes in the past.<\/strong><\/em><\/p>\n

I don’t think there’s much risk of a repeat of 2008. I also think, you know, we need to be careful about making proclamations about the.. future.<\/em><\/p>\n

…<\/em><\/p>\n

There will be certainly be some banks that have to be closed or merged out of, out of existence because of this. That’ll be smaller banks,<\/strong> I suspect, for the most part. <\/em><\/p>\n

You know, these are losses. It’s a secular change in the use of downtown real estate. And the result will be losses for the owners and for the lenders, but it should be manageable.”<\/em><\/p>\n

Do you feel lucky, punk? Picking the right regional bank that will be bought before it’s closed under FDIC?<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nTue, 02\/06\/2024 – 16:00<\/span><\/p>\n

\u200bRead More<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Bank Blow-Up ‘Butterflies’ Spark Bid For Bonds, Bullion, & Bitcoin No major macro today but more jawboning overnight from Beijing sparked some global gains in…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1455695","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1455695","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1455695"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1455695\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1455695"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1455695"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1455695"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}