Le Banche sulla DIFENSIVA: Calo SCIOCCANTE della Liquidità

Summary

The transcript discusses the defensive stance of American banks, highlighting a shift in their risk aversion and liquidity accumulation. It points out the disappearance of $70 billion in bank reserves and the purchase of nearly $75 billion in government bonds and MBS, indicating a move towards safety. The video also touches on the end of the BTF program and potential issues with regional banks and commercial real estate. Furthermore, it analyzes the strength of the US dollar against the yen, the latter suffering from significant devaluation, and the gold market, where central banks are major buyers. The speaker advises investors to stay grounded and make objective decisions based on macroeconomic data.

Takeaways

• 📉 American banks are becoming more defensive and averse to risk, possibly indicating they know something the public does not.
• 💹 There has been a significant disappearance of approximately 70 billion dollars in balance sheets and liquidity from American commercial banks.
• 🔄 The banks have started accumulating liquidity in their vaults, but recently, there has been a drop in the isogram, suggesting a loss of 170 billion dollars.
• 🚫 The消失 liquidity has not been redirected towards loans or leases, as their growth has plateaued, indicating a shift in bank strategy.
• 🏦 The missing funds have been invested in nearly 75 billion dollars of government bonds and Mortgage-Backed Securities (MBS), showing a move towards safer assets.
• 🛡️ The shift towards government bonds and MBS reflects a defensive strategy by commercial banks, seeking safety in the face of potential economic uncertainty.
• 📈 Despite the banks' defensive stance, the Federal Reserve has maintained a soft landing outlook with no recession predicted until 2026.
• 🏢 Regional banks, particularly those involved in Commercial Real Estate (CRE), may face liquidity issues due to the impact of remote work and reduced office space demand.
• 🌐 The Japanese Yen is significantly weakening, despite being considered a safe-haven currency, and the government has expressed intent to intervene to prevent excessive fluctuation.
• 💲 The US Dollar is strengthening, which is unusual in a market that is bullish on stocks and optimistic about the economy.
• 🌟 Central banks, including China, are buying gold, reflecting a global trend towards investing in safe-haven assets.

Q & A

What is the current stance of American banks regarding risk?

American banks are moving towards a more defensive stance, becoming more averse to risk, possibly indicating they might be aware of something others are not.

How much liquidity has disappeared from American commercial banks' reserves according to the transcript?

Approximately 70 billion dollars of liquidity has disappeared from American commercial banks' reserves.

What happened to the 170 billion dollars that disappeared from the banks' reserves?

The 170 billion dollars were not used for lending or leasing but were instead used to purchase nearly 75 billion dollars in government bonds and Mortgage-Backed Securities (MBS).

What does the shift in banks' investment towards government bonds and MBS indicate?

The shift towards government bonds and MBS indicates that commercial banks are seeking safety and are becoming less adverse to risk, preferring more secure assets like bonds.

What is the current economic outlook according to the Federal Reserve's economic summary?

The Federal Reserve's economic summary suggests a soft landing with no recession predicted for 2024, 2025, or 2026. It anticipates a continued decrease in inflation, reaching 2.1% by 2026, and a robust real gross domestic product growth of 2.1%.

Why might regional banks face liquidity issues despite the central bank's support?

Regional banks might face liquidity issues due to their significant exposure to commercial real estate. The changes in work patterns due to COVID-19, with many offices remaining empty or being reduced in size, have affected the real estate sector, causing difficulties for builders and other entities that owe debts to these banks.

What is the current status of the Yen and how is the Japanese government responding to it?

The Yen is currently suffering from significant devaluation. The Japanese government has expressed the intention to take appropriate action to curb the excessive fluctuation, with the finance minister stating that they will not rule out any options to intervene.

How is the US dollar performing compared to other currencies?

The US dollar is strengthening, which is unexpected in the current economic situation. Despite the central bank's historic move to raise interest rates from -0.1% to +0.1%, the dollar's strength continues to surprise the market.

What is the role of gold in the current financial environment?

Gold is being seen as a safe-haven asset in the current financial environment. Central banks, including the People's Bank of China, are buying significant amounts of gold, indicating a move towards safer assets.

What is the importance of the Purchasing Managers' Index (PMI) in the context of the current economic situation?

The PMI is crucial as it provides a real-time snapshot of the economic health of the manufacturing and services sectors. The expectation is for the PMI to be significantly above 50, indicating growth, which would support the current market optimism and cyclical rebound expectations.

What advice is given to investors regarding the current market conditions?

Investors are advised to remain grounded and not be swayed by fear or excessive optimism. The focus should be on making the most objective and analytical decisions possible, based on all available information and data.