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Banks
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Banks Chart

XLF/SPY overlayed with 10 year. Keep an eye on the banks relative performance to SPX and interest rates. Financials generally lead SPX given their higher sensitivity to the economy and risk. 

The evolution of Banks: Expanding on Raoul's Bank comments

Raoul has mentioned a few times that banks may become obsolete with cbdc and cryptocurrencies becoming mainstream. I think this is a rather naive assessment. If there is one thing we know about banks is that they never go away, they evolve. So what does banking look like in 2050?

I think banks look similar to some of the crypto companies we see now. I believe banks will either absorb existing crypto exchanges once regulatory clarity comes next year or banks build their own exchanges which is currently happening. They will more than likely very quickly become the go-to exchanges among your average joes who trust banks more than they trust a coinbase or an uphold. Banks will provide custody services for crypto assets. You are already seeing that coming about with the NYDFS providing clarity on that. I also believe we will see banks embracing defi and pushing to blend that with cefi. JP morgan actually just did that .

I also think these services will provide banks with alternative revenue outside of loans and also the emerging trend of banks spinning off multiple VC firms from their own offices. Depending on the size of these bets they could provide retail investors exposure to the VC world via their stocks.


Now we all know money is created when banks lend to consumers. We all know that hasn't really been happening as much as it used to hence money velocity tanking in the prior decades. If banks are allowed to... (More)

GLOBALIZATION – Don’t Call it a Comeback, I’ve Been Here for Years

Globalization is the accelerating cross-border movement of goods, capital and people.  
 
Last week’s Financial Times opinion-piece adds one more metric: information.  The FT notes that a two-decade long collaboration between the logistics company DHL and New York University shows the movement of people (e.g. tourists, students, migrants) and information (e.g. calls, collaboration, publications) have risen steadily despite 21st-century turmoil.  And though the movement of people will collapse for 2020, the movement of information will not as internet use surged.  
 
The other two metrics – capital and goods – are inextricably linked.  If the world is to see an escape out of the post-2008 malaise in trade it will be if banks expand their balance sheets (i.e. create credit, private ledger-balance money).  
 
The BIS’ latest estimate for cross-border assets (i.e. claims) through June offers hope that the first quarter surge in bank assets was not a one-off.

Real Estate and Unemployment

 There is NOT a lot of upside in real estate right now. There is actually a significant amount of disequilibrium. Once the delinquencies start to gain momentum, the US consumer will not be in a good place. This has implications for banks, homebuilders, and a lot of MBS securities. And the worst is yet to come. #bearish #reallybearishbro #doyouevenbearbro