**BREAKING: Bank Bloodbath Continues, Gold Soars above $2,000 Again

Tomorrow is Fed day, and today’s data showed deepening recessionary signs, almost assuring the end of rate hikes is here .

May 02, 2023

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Bottom Line:

It is open season on regional banks now. Based on yesterday’s FRC takeover by JPM1, no regional bank is safe. The death spiral of a whole industry has begun.

There will be big knock on effects. Commercial real estate will be destroyed for decades, insurance companies will feel it soon thereafter.

At bottom is JPM’s full presentation to the Fed for its rationale to buy First Republic as it did, for pennies on the dollar.

The day so far:

Tomorrow is Fed day, and today’s data showed deepening recessionary signs, almost assuring the end of rate hikes is here. That normally is bullish Gold, Bearish the dollar, and bullish stocks.

However… Given the backdrop of yesterday’s FRC Bank failure, and the market’s desire not just for a Fed stop to hikes, but a Fed easing.. stocks are taking this badly. Gold is taking this well.

Today’s behavior is indicative of a market once again in fear of bank solvency at key financial institutions affecting broader markets.

Bonus At bottom: the JPM FRC presentation, and TD on FRC.

Comment:

Tomorrow could bring a complete reversal here, But stocks are down *despite* the expectations of a rate- hike cycle ending. This is Anti-Goldilocks manifest:

Our first post on the phenomenon witnessed today…

Weekly: Structural Stagflation

VBL

March 12, 2022

Read full story

I.E.- The end of excessive financialization taking hold of a system with flight to assets that have a higher chance of remaining solvent. The highest chance of solvency of course, being something with absolutely no associated debt or leverage. Gold and Silver

Chronologically:

Post FRC Banking collapse yesterday, more regional banks opened under water….

*KBW REGIONAL BANK INDEX FALLS 3.8%, LOWEST SINCE NOVEMBER 2020
*PACWEST SHARES PLUNGE AS MUCH AS 19% TO LOWEST SINCE MARCH 13

And Today’s Data was recessionary….

JOLTS job openings 9.590MM, Exp. 9.736MM, Last 9.931MM
Factory Orders 0.9%, Exp. 1.3% Cap Goods orders nondef ex air -0.6%, Exp. -0.4%
BLS: "the number of quits decreased in accommodation and food services (-178,000)" - means people are getting fired

Markets react:

Gold rallies as flight to safety
Dollar weakens in expectations of fed easing
Bonds rally on growing expectations of Fed easing and safety flight
***Stocks, which you’d expect to be up, are focused on the bad news alone so far.***