Never in history have we had all three issues happening at once…

The recent banking problems reminded us of how the US economy is facing a trifecta of macro imbalances:

▪️The debt problem of the 1940s
▪️Speculative environment of the late 1990s
▪️Inflationary issues of the 1970s

Never in history have we had all three issues happening at… pic.twitter.com/VrC442cVry

— Otavio (Tavi) Costa (@TaviCosta) March 19, 2023

The greatest banking crisis since 1929 created by the Fed and Treasury 👀 https://t.co/YnlzAWEzfU pic.twitter.com/gdtUAAReOM

— Financelot (@FinanceLancelot) March 18, 2023

JUST IN:

Midsize banks are reportedly requesting the FDIC to insure all deposits for two years per Bloomberg

— unusual_whales (@unusual_whales) March 18, 2023

https://twitter.com/NorthmanTrader/status/1637206975959162883

Key reason why the US consumer is so resilient is that bank lending into real estate (pink) and consumer loans (orange) has been so strong. A lot of this lending is from small banks, which will cut back if deposits migrate from small to big banks. US recession risk is rising… pic.twitter.com/tGEZ9iASt9

— Robin Brooks (@robin_j_brooks) March 18, 2023

Important old chart of mine.

Fiscal policy created inflation to a much larger extent than QE pic.twitter.com/zeT5jLqwVA

— Andreas Steno Larsen (@AndreasSteno) March 18, 2023

The Next Bomb to Go Off in the Banking Crisis Will Be Derivatives

U.S. Treasury Secretary Janet Yellen finds herself in a very dubious position. Under the Dodd-Frank financial reform legislation of 2010, the U.S. Treasury Secretary was given increased powers to oversee financial stability in the U.S. banking system. This increase in power came in response to the 2008 financial crisis – the worst financial collapse since the Great Depression