The banks are stranded on the liquidity shore.
The deposits are racing out the door to fund the budget deficit.
The FED is not doing enough of a Hans Brinker act to plug the deposit gap.
THE FHLB is doing a Hans Brinker but its resources are finite.
In the mean time the US Government keeps on dynamiting the dyke with new expenditure programs.
Anyway the banks dont want to borrow from the FED and FHLB because it is expensive
Goodbye profits …..stock price…..and executive stock options.
End result….Banks……look out below.
Even Jamie has figured it all out and is dumping his JPM stock.
Uncle Warren figured it out about a year ago and dumped most of his bank stocks…… but not Bank of America or America Express….keeping these is a mistake…..but obviously they have considerable sentimental value to him.
(I think these two positions would benefit from a rather vigorous hedging program which given the circumstances should probably be implemented in a rather urgent manner).
Its not pretty.
Not pretty at all.
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