According to the American Automotive Policy Council, the world’s biggest auto companies can use over a thousand silicon chips in each car. This fact from Chip War: The Fight for the World’s Most Critical Technology resonated more than anything else in this fascinating book about the world’s reliance on computing power. Had I been asked […]
90% Of Everything moves by ship, at least according to author Rose George in her 2013 book that’s still fascinating reading today. George traveled as a passenger on a cargo ship called the Maersk Kendal. While onboard she interviewed the captain and crew members, enabling her to present an absorbing picture of maritime freight, an […]
First Citizens Bancshares has agreed to buy most, but not all, of Silicon Valley Bank’s (SVB) carcass from the FDIC. They’re acquiring $72BN of loans at a discount of $16.5BN. The FDIC estimates SVB’s failure will cost it around $20BN. The Deposit Insurance Fund currently sits at 128BN. It’s funded by banks, which means by […]
At some point Congressional oversight of the Federal Reserve should result in a careful examination of the central bank’s error-strewn record under Chair Jay Powell. Below is a roadmap for discriminating legislators willing to conduct a critical review of the Fed’s serial mistakes. Above the Fed’s twin mandate of seeking maximum employment with stable prices […]
An Op-Ed in the Washington Post last week suggested that unrealized losses on fixed income investments are likely much higher than the $640BN on held to maturity MBS. It was written by Sebastian Mallaby, who wrote about hedge funds in More Money Than God and has published several other finance books. Mallaby relies on two […]
Investors have reacted to the aftermath of Silicon Valley Bank’s (SVB) failure by assuming tighter credit conditions. This makes sense over the near term. The US banking system has been increasing duration risk, and while SVB was more reckless than most they were not alone. Piling into long term government bonds and mortgage-backed securities required […]
Commercial banks have long benefited from depositor lethargy regarding rates. Although we now have a de facto guarantee of all commercial banking deposits, not just those up to the $250K threshold, customers are likely to pay a little more attention to return and risk, which will force banks to be more competitive. On the asset […]
Silicon Valley Bank (SIVB) succumbed to poor risk management in holding long term bonds funded with demand deposits. If that’s all there was to banking we wouldn’t need many banks. But at a strategic level, Quantitative Easing (QE) as pursued for too long during the pandemic created the conditions for poor decisions. Central bank strategy […]
Real estate investors are keenly attuned to the Fed’s efforts to curb inflation. The Vanguard Real Estate Index Fund (VNQ) is down 18% over the past year, lagging the S&P500 which is –6% and the American Energy Independence Index (AEITR) which is –1%. Rising rates have cooled the hot property market that the Fed’s bond […]
From time to time we come across new companies and technologies that offer the potential to reduce emissions, thereby contributing to the energy transition. One recent example is Sea Forest, an Australian company developing a seaweed-based food additive for cattle that will reduce methane emissions (see How Seaweed Can Fight Global Warming). A few weeks […]
