Weekly Part 2: Ferraris and Minivans
SVB, Flow Show, CTA Levels
Today:
SVB reports- JPM is very good
Hartnett- Has his credit event- now looking for Fed Tightening to stop
CTA, COT reports on Gold and Silver- bullish before the event
1- SVB
It’s all about SVB today. This isn’t over by a long shot. Other banks will have very similar profiles. That is: reliant on depositors money, but really getting their money from concentrated VC, Tech gurus, and Bitcoin entrepreneurs.
Think of these banks like a car dealer selling 2 models. The Minivan (bought by regular depositors) and a Ferrari (bought by the occasional millionaire walk-in).
The tech boom creates a lot of people buying Ferraris and because of this they stop promoting to Minivan buyers. They neglect their customer base in favor of the big money specialty items. They buy themselves Ferraris too.
Then the Ferrari money dries up and they have no Kia buyers left. They have all their deposits with a couple VC Silicon Valley tech guys. Time for a bailout
Anyway, that’s our take… Incentivized Greed and forgetting your core.
How they deal with this will be a template for how they deal with the subsequent real economy problems. Getting caught up now will help make clear decisions later.
The parallels to San Fran as a mining town are not lost on us. This time the thing mined was regular people’s money
Full Excerpts for SVB, HARTNETT, and TD Below