{"id":65146,"date":"2023-03-10T17:06:21","date_gmt":"2023-03-10T22:06:21","guid":{"rendered":"https:\/\/olduvai.ca\/?p=65146"},"modified":"2023-03-10T17:06:21","modified_gmt":"2023-03-10T22:06:21","slug":"worst-since-lehman-banks-break-the-world-again","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=65146","title":{"rendered":"“Worst Since Lehman”: Banks Break The World Again"},"content":{"rendered":"
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“Worst Since Lehman”: Banks Break The World Again<\/a><\/h3>\n<\/header>\n
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Last week we detailed<\/a>\u00a0BofA’s Michael Hartnett’s warning that\u00a0“The Fed will tighten until something breaks”<\/strong><\/em>.<\/p>\n

Well, something just broke…<\/p>\n

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SVB’s collapse – the second biggest US bank failure in history<\/a>\u00a0– dominated any reaction to this morning’s mixed bag from the BLS<\/strong>\u00a0(hotter than expected earnings growth, rising unemployment (especially for Latinos), better than expected payrolls gains).<\/p>\n

Things started off badly as SVB crashed 65% in the pre-market before being halted. SVB bonds were puking hard and when the FDIC headline hit, the bonds collapsed further…<\/p>\n

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

A number of small\/medium sized banks were clubbed like a baby seal…<\/p>\n

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

And the KBW regional bank index crashed (down 9 of the last 10 days and 20% in that period).\u00a0The 18% drop this week was the index’s worst drop since Lehman (Sept 2008)<\/strong>…<\/p>\n

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

And as you’ll see below, that\u00a0started to have some notable impacts on the most arcane of global systemic risk red flag signals<\/strong>…<\/p>\n