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Recent Articles
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Quick Take: Fed Raises 25 Basis Points; This Banking Crisis Is Far from Over
Mar 22, 2023
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Image: FOMC Chairman Powell answers a reporter's question at the March 20, 2019 press conference.
On March 22, 2023, the Federal Reserve raised its benchmark rate 25 basis points, to the range of 4.75%-5%, a move that we think reflects a government agency that is now more or less a deer caught in headlights--given the nascent regional banking crisis in the United States. The bottom line is that the U.S. banking system does not have enough cash on hand to redeem all deposits (it never has), and with respect to U.S. banks, deposit insurance is only up to $250,000 per depositor, per FDIC-insured bank, per ownership category. The U.S. public has grown concerned, and that may spell continued panic (and deposit flight). The bank business model is inherently flawed, in our view, necessitating outsized risk and enormous amounts of leverage. From where we stand, the U.S. banking system will likely continue to be tested until it is resolved that any deposits held at any financial institution in the U.S. are completely safe by explicit government guarantee. Without this explicit guarantee, it may mean continued deposit flight from the regional banks to the large money center banks -- the Too-Big-to-Fail ("TBTF") banks -- or it could mean potentially higher deposit insurance levels that go far beyond the current $250,000 threshold, which itself was raised from $100,000 during the Great Financial Crisis in 2008 (and made permanent in 2010). One might hope that the markets can perhaps avert another all-out banking crisis if deposit insurance thresholds are raised once again, but this explicit move remains to be seen.
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The Power of Expectations: How Financial Advisors Can Improve Client Retention
Mar 21, 2023
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Image Source: Frédéric Glorieux.
This could make the difference between a happy client and a lost client.
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Cost Cutting Drives Fair Value Increase of Meta Platforms
Mar 20, 2023
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Image: Our updated fair value estimate of Meta Platforms is $225 per share.
CEO Mark Zuckerberg's about-face when it comes to spending has had a material impact to our fair value estimate of Meta Platforms. Download our updated stock report in this article.
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Dividend Increases/Decreases for the Week of March 17
Mar 17, 2023
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Let's take a look at firms raising/lowering their dividends this week.
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