Happy Easter! Happy Passover!

Happy Easter!

Happy Passover!

We have a happy coincidence of Easter and Passover this year. Passover began Wednesday night, Easter arrives on tomorrow. They have brought blessings and hope to us all for thousands of years. I hope we can all spend time with our families and friends to celebrate the good news that our ancestors recognized and treasured for generations.

With that said, we continue with some comments by one of our "Brain Trust" folks. If you're looking for some financial candy to enjoy with your holiday feasting, here goes:

-   Collapse of SVB Bank not an isolated event – Review of what happened: Held $21 Billion in bonds (mostly long?) resulting in large unrealized losses – Sold bonds (why?), resulting in $2 Billion loss – a large loss for a bank. – Also, were two other bank failures: Signature Bank, Silvergate

-   This is the “credit market event” D was expecting. (Add to this collapse of Signature Bank.)

-   The canary in the mine just died.

-   While interest rates need to be above inflation rate, Fed raised rates too quickly – Businesses and banks had not time to adjust.

-   Can’t know how many other banks might have similar problems with balance sheet because of fall in bond prices due to rising interest rates.

-   Revelation that SVB had London branch – So it’s an international problem now.

-   First response to credit crisis: Buy long treasuries – good for a while, but then smart money will realize that all rescue efforts will boost artificial money creation, ultimately boosting inflation – which will be bearish for bonds. Recommends: Only buy short-term treasuries or BIL ETF.

-   Bank collapses were “tip of the iceberg” – These things don’t blow over in a few days: e.g., GFC started with Bear Stearns March 2008; 6 mos later Lehman Bros filed for bankruptcy which set off market crash that lasted until March 2009.

-   (NB: After last crisis, a change: Depositors who lost money would be deemed investors, putting them at the level of shareholders – at the bottom of the creditor list.)

-   Once enthusiasm over government’s bailout passes, it would be lunacy to try to pick up bargains.

-   Stocks: Key charts all broke below support levels, with rising volume – a bearish signal haven’t seen in several months – Ignore any short-term rallies

-   See analysis of various technical indicator charts

-   We’re still in the first half of the Bear Market – If prices break down below support levels, market will likely go much lower.

-   Energy: These events could be signaling that energy will be sold along with other stocks – Consdier lightening up.

-   The severity of the hangover is directly proportional to the amount of fun you had at the party.

-   CBs always make the same mistake every time: Raising interest rates to stop inflation. Only hiking rates exacerbates inflation. Only credit tightening without hiking rates can stop inflation. Demand has to be reduced by making loans hard to get.

-   RE: Office building vacancies are sky high, in large cities over 30% – Office REITS are in trouble. Office REIT Index has plunged 44%.- Shortage of credit availability (not from Fed but from economic conditions - Office building stocks/ETFs would be good shorts.

-   Yield curve inversion highest since 1982 – Could mean coming recession might be most severe since that time.

-   Gold: Cites Perth Mint “doping” billions of gold bars sold to China: Will this spook demand. Still not recommending Gold/PMs.

-   Talk of tax hikes: likely Biden Bill won’t pass, but doesn’t mean some part(s) of it might not result in some tax increases – Cites tax hikes (up to 90%) by FDR, which extended Great Depression.

-   Jobs Report: Notes that BLS officially adjusted its recent “big” gain to 2.5 million lost jobs – reinforces view that BLS puts out tainted numbers (lies?).

Enough!

Get on with the joy and glory of Easter and Passover.