Thread by @HiddenValueGems

The new memo by Howard Marks, unsurprisingly on #SVB debacle and broader banking issues. Some points which caught my eye 📖👇

1 | “My sense is that the significance of the failure of SVB is less that it portends additional bank failures and more that it may amplify preexisting wariness among investors and lenders, leading to further credit tightening and additional pain across a range of industries and… twitter.com/i/web/status/1…

2 | “I think the similarities between 2008 and 2023 are limited to the mere fact that, in both instances, problems existed at a few financial institutions.  I find the common elements mostly superficial.  What follows are the differences.”

3 | “Looking at the current situation, I can’t think of anything that’s highly analogous to the subprime mortgages at the heart of the GFC.”

4 | “Indeed, I think it’s safe to say the most glaring market excesses were corrected in 2022 and aren’t hanging over us now.”

5 | “When investors think things are flawless, optimism rides high and good buys can be hard to find.  But when psychology swings in the direction of hopelessness, it becomes reasonable to believe that bargain hunters and providers of capital will be holding the better cards and… twitter.com/i/web/status/1…

6 | “I can’t end a memo on U.S. banks without mentioning one of the biggest worries they face today: the possibility of problems stemming from loans against commercial real estate (“CRE”), especially office buildings.”

7 | “we’re very likely to see mortgage defaults in the headlines, and at a minimum, this may spook lenders, throw sand into the gears of the financing and refinancing processes, and further contribute to a sense of heightened risk.”

Full memo:

oaktreecapital.com/insights/memo/…