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David & Tim booked holidays for 'a quiet week in March' when there definitely wouldn't be a banking crisis. Perfectly planned.
The Veteran's looking at lessons from the past couple of weeks 👇
We start with a picture: this is the chart of a bank that had recently received a $30 billion injection of capital from a consortium of some of Wall Street's biggest firms.
Can you tell that from the chart? Nope, nor can I...
Even now, it's trading a touch lower at 14.26
Let's look at two more charts...
KRE, the S&P Regional Banks ETF and SX7E, the Euro Stoxx Bank index, neither of which were having a particularly good time of things...
Then we turn to the sorry tale of Credit Suisse - a bank that had been teetering on the brink for some time, thanks to a combination of family office Archegos blowing up and the bank's links to the Greensill debacle.
Don’t get fooled into thinking that CS wasn't sailing close to the wind before all this.
Oh no, the bank had far from lilly-white reputation and was no stranger to a regulatory slap on the wrist and a punitive fine or “two”.
Then, of course, the Federal Reserve moved to backstop the US banking sector. As JP Morgan points out, the Fed stands ready to inject up to $2 trillion into US money markets to aid liquidity. The central bank has also opened up $ swap lines to overseas central banks and institutions.
In doing so, the Fed's potentially unwinding its own quantitative tightening efforts and balance sheet reduction.