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Mar 10 • 12 tweets • 4 min read
JP Morgan, entirely relaxed about Silicon Valley Bank's transition from 'cash burn' to bank run
the question to me - maybe @RobinWigg has the answer - is why firesell US treasuries and agency when these are the easiest to repo and raise reserves?
Sillicon Valley Bank basically firesold 20% of its securities portfolio - the most liquid bits such as US government bonds - so it can meet deposit withdrawal requests that also draw down Fed cash (for settlement)
more on SBV liabilities - a run accelerated by institutional cash pools, whose deposits not protected by guarantees

oh hello JP Morgan, what amazing market-reading skills, give them a bonus

says a lot about the so called 'paradigm shift' and power politics in US macro that this guy is still taken seriously

banking crisis banter
'tech bailed out the US government' is the craziest take ever on Silicon Valley Bank, prove me wrong.
of course, it would be even crazier if the US government bails out the tech depositors with SBV, but I am fairly convinced it will happen #timestamp
extinction level event, SVB.
if we could monetise hyperbole of tech evangelists, that's a money tree bigger than the Fed.

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More from @DanielaGabor

Daniela Gabor Profile picture
Mar 9
after decades of ordoliberalism and under the table state aid, “This is quick and dirty money to match the Americans,” said one person with direct knowledge of the EU Green Deal Industrial Plan
it is a measure of UK's irrelevance post #Brexit that nobody has noticed our Green Industrial Revolution
green derisking dreams with just £12bn of public resources dont exactly trigger a subsidies race.
Read 4 tweets
Daniela Gabor Profile picture
Mar 6
Macron's Africa tour started in Gabon, for #OneForestSummit.
Its financing pillar relies on “carrots without sticks” strategy of derisking private investment that will displace more effective alternative: public investment a la @katie_kedward @jryancollins
phenomenalworld.org/analysis/wall-…
@katie_kedward @jryancollins Macron's partnership with derisking evangelists is not new, neither surprising - Derisking as Development is now the status-quo approach to
a) development interventions (WB 'evolutions roadmap)
b) climate crisis
c) green industrial policy 'subsidies race'
derisking everywhere - in the EU #GreenIndustrialPlan
Read 4 tweets
Daniela Gabor Profile picture
Mar 2
oh hi @ecb in the spirit of transparency and expectations anchoring, would be great if you could share those internal slides showing it's corporate profits, not wages, driving inflation

reuters.com/markets/europe…
ahem
just to clarify, @ecb is handwaving around a 'theory' of wage-driven inflation with no empirical basis while hiding behind closed doors the empirical evidence pointing to corporate profits.
central bank independence from what and for whom?
Read 5 tweets
Daniela Gabor Profile picture
Feb 23
the Bank of England has updated its transmission mechanism but still refuses to spell 'profits' anywhere, in case you needed further clarification of its distributional politics
the Bank, unlike the people of Britain, lives in a world where firms do not use their pricing power to extract excessive profits.
this is not a leftist talking point - Bank of England could easily use the BIS statistics confirming that corporate pricing power at historical highs (median mark-up), very much in contrast to collective bargaining power
Read 7 tweets
Daniela Gabor Profile picture
Feb 17
claim that US derisking state can organise decarbonisation via IRA subsidies for private capital is now article of faith in bon pensant circles

but the way in which the derisking state organises support for business matters, and raises two difficulties

ft.com/content/e0b558…
first, the idea that you can beat China's cleantech dominance with tax measures that adjust price signals is optimistic - historically, successful industrial policy needed a more supportive macrofinancial regime
bigger obstacle: green industrial policy is different from other industrial policies. It must penalise carbon capital for decarbonisation to work

BUT derisking state premised on partnernship w private capital that precludes discipline - eg 2022 fossil superprofits
Read 7 tweets
Daniela Gabor Profile picture
Jan 20
roll out Wall Street Consensus, in full glow at #WEF23
the US derisking state and its cheerleaders
few in the US appreciate how important Europe has been in unleashing the US turn to derisking - this is where global financiers waged battle against mandatory decarbonisation and won

Read 4 tweets

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