Powell “stayed away from addressing the banking sector but the sharp decline in regional shares is certainly getting attention at the Fed.”
Could the combo "March cut is fully priced out + regional bank stress building" trigger a temporary spike of the VIX? Source: Carl Quintanilla
The two largest economies in Africa are under huge financial strain.
On Monday, Nigeria de facto devalued the naira by ~30% (after another ~30% devaluation in June). And Egypt is under pressure to devalue too, with the pound ~50% weaker in the black market. Source: Javier Blas Bloomberg
China Factory Activity Expands Again, Private Survey Shows
Source: Bloomberg, C.Barraud
BREAKING: Mortgage demand fell to a new 30-year low in January 2024, down 54% from the pandemic peak, according to Reventure.
Mortgage demand is down 14% over the last year and 40% from pre-pandemic levels. Source: The Kobeissi Letter, re:venture
The US is facing a "death spiral" as a result of its mounting debt and the inability of politicians to confront the issue, according to "The Black Swan" author Nassim Taleb.
Per Bloomberg, the Universa Investments advisor who correctly called the 2008 financial crash cast a dire warning about the US debt situation, which has seen the federal debt balance notch $34 trillion for the first time ever to start the year. As long as Congress keeps up its rapid pace of spending, those debts are going to continue to pile up, which could have disastrous consequences for the US economy, Taleb said this week at an event held by Universa Investments. In fact, rising debt in the US is a "white swan," Taleb said, and is an event that poses an obvious risk to markets versus a "black swan" event, which can occur without much warning. That death spiral would necessitate "something to come in from the outside, or maybe some kind of miracle," Taleb said, when asked how the shock would play out, adding that the situation has made him more pessimistic about the political system in the West. Source: Business Insider
A Trader bought 50,000 CBOE Volatility Index $VIX April expiry 50 strike calls for $0.21 which is a total premium of just over $1 million.
Source: Barchart
Equities have left central bank balance-sheet behind...
Source: UBS, TME
U.S. Banks are facing unrealized losses of roughly $685 billion (updated as of Q3).
This problem isn’t going away any time soon until the Federal Reserve begins cutting. New York Community Bancorp $NYCB might be the next victim. Source: Barchart
