441: Housing Inventory Falls, Silicon Valley Bank Collapse, Moral Hazard, Mismanaged Portfolio, Improper Risk Management, Alfonso Peccatiello

American Monetary Association

Alf is Italian but is coming today from the Netherlands. He and Jason talk about some of the factors that contributed to the collapse of the Silicon Valley Bank, the largest bank failure since the 2008 financial crisis. They discuss the moral hazard involved, mismanaged portfolios and the lack of proper risk management- factors that culminated on the banks demise, making investors question whether this will spark a broader banking meltdown.

Key Takeaways:

Jason’s editorial

1:21 Hope you enjoyed last episode

2:03 Listen to Jason’s “10 commandments of successful investing”: Thou shalt maintain control!

4:38 Housing inventory keeps falling- where’s the crash?

7:10 Almost 25% of mortgages are 3% or lower

8:19 On to our guest with a deep dive into the current banking crisis

Alfonso Peccatiello interview

9:14 Alf, coming from the Netherlands

10:03 3 Bank collapses; a summary of what really happened

13:42 US Banks loan-to-deposit ratios

16:06 Moral Hazard and a mismanaged portfolio

19:16 Big banks hedge interest rate risks- NOT SVB

22:28 Lax regulatory and accounting laws in the US for small banks

23:34 Who benefited from the collapse

24:36 Securities portfolio mix as of December 31, 2022; distinguishing between small and highly regulated banks

29:29 SVB ‘woke’ programs and the lack of proper risk management

30:39 Bank failures 2001 to 2023; are more bank collapses coming

31:56 At risk: the real estate market; unaffordable housing leads to more renters

34:50 Compared to what

37:43 The booming labor market

39:02 Credibility & central banks; Blackstone & KKR, Jerome Powell & Paul Volcker

44:25 There is no distressed home owner

48:10 Institutional investors- what their capital stack or debt structure is like

49:32 Step up your macro game https://www.themacrocompass.com

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