Interest Rate Pause

Repost without the insults and I’ll answer, thoughtfully as I have been. Otherwise. I don’t need yet another poster on my insult dance card. It’s full.

 

Obviously just my opinion but this guy is a fool. Let the current rates put pressure and adjust later. My money is on Feds will start to lower sometime late 2024.

 

Mr Boy.

1). I wasn’t addressing you
2) the poster I was addressing intimated that banks were losing money and that there is a banking crisis in a tangential argument to a discussion of an interest rate pause (i helpfully pointed out that the market is pricing in a 100bps cut in 2024). This mornings market news suggested investors think rate hikes are done. (10 year yield is down from 4.93 Oct 13 to 4.62 this AM)
3) while it is possible not knowing the background of every poster it is much more likely that I know more about what impacts bank profitability, Basel 3 and 4 and RWA across exposure positions than any poster here.
4) I said nothing about politics

But carry on with your fascinating TIP’s strategy discussion

 

A rare occasion where I agree with you.

 

“Banks, of all people and companies, should have shored up their balance sheets and take a small loss early rather than a big loss later or failure.”

speaks to profitability and banks in general. Also banks balance sheets and CET1 capital are and have been for a while quite healthy.

 

When you stop generalizing about things you don’t have much insight on I’ll stop pointing it out. Notice I highlighted “loss” and not “failure”

 

So you are saying that banks, most of which hold treasuries to varying degrees, aren’t or won’t take any losses on them?

 

No I’m talking about bank profitability overall (quite profitable just not vs prior year due to aforementioned reasons) and overall stability as measured by CET1 and T1C.

there are multiple platforms from which banks make money. consumer banking, private wealth, investment banking, institutional and commercial banking and international banking being the most significant.

 

taking a loss (on some bank assets like bonds ) doesn’t necessarily mean your bottom line is a net loss. Also you can have unrealized losses on bank assets that haven’t flowed down to the bottom line yet.

Aging works in accounting and I worked in accounting and finance - we have some idea about what banks do and how they work. Seems like you are trying to create an argument where there is none.

 

I have an MBA in Accountancy am a CPA worked for 4 years in a Big Four firm 20+ years in Fortune 500 finance FP&A and now work in big bank Finance. So I also know what I’m talking about. Aging was talking in generalities about banks losing money and a bank crisis where it doesn’t exist. I don’t think I addressed anything you said at all.

BTW Bill Gross just called the bottom on regional banks.

edit to add this thread is about a hike “pause” which now might be better titled “countdown to rate drop”

 

3-1 odds there aren’t any rates cuts until Q3 of 24. If there are it’s because the crap is hitting the fan.

 

Lol hey we likely have more common ground than you might think. Likely very little politically but that’s ok. There is so much more to life than politics.
I believe myself to be more center right. I just spent a week with extended family who are rather left leaning. We had a wonderful week.

 

MBA, CPA, Corp FP&A, yada yada. Been there done that. Are we done comparing resumes?

 

Tou mentioned yours first in assuring me you know what you’re talking about You left out the bank part which seems most relevant. Sniff….

 

Jobs report cool. 150k v 170k expected. Ue up to 3.9%.

Markets rejoice

 

Last three months have been revised down also. The headline number is and has been inflated to make the labor market seem stronger than it is. No reason at all to raise now and this Fed is borderline moronic if it even contemplates another raise.