Author Archives: beowulfstreasury

Summary Background We need to understand the roadmap in terms of how we got here: The Focus of Bank Regulation and Stress Testing Now that we have understood where we came from, let’s understand the recent history of bank regulation: Banks’ Behavior Before SVB and Signature Bank Failures Even before recent bank failures, the bankingContinue reading “A U.S. Banking Crisis – How Did We Get Here? What Can Be Done?”

Overview Though U.S. Regional Banks do not measure their liquidity position under Basel III Liquidity requirements, we have tried to estimate a proxy for a Liquidity Survival Horizon based on deposit withdrawals that have been used by banks/regulators in the Liquidity Coverage Ratio (30-day liquidity stress test) and look at other historical examples of bankContinue reading “Assessing Liquidity Survival Horizon and Impacts of Deposit Runoffs to Near-term/Long-term Profitability of Select U.S. Regional Banks (First Republic, PacWest, and Western Alliance)”

Trading in shares of First Republic Bank and Western Alliance Bancorp. was paused after steep initial losses on Monday as bank solvency fears persisted following the failures of Silicon Valley Bank and Silvergate last week. First Republic is down almost 75% and PacWest down almost 40% today. We believe that it has more to doContinue reading “A Short Note on Why U.S. Regional share prices continue to drop today, despite Federal Reserve Liquidity Backstop for Uninsured Deposits….”

Warnings Signs Hiding in Plain Sight – A complete mess that could have been avoided In this latest blog, we are drawing upon our almost 20 years of experience in Canadian Banks (last year 10 years in senior Treasury positions, including Bank Treasurer), both Large and Small Medium Sized banks to review the situation.  TheContinue reading “A Note on Silicon Valley Bank (SVB) and potential risks in other US Regional Banks – Asset Liability Mismanagement, Management, Regulation, and Governance “

Global Liquidity and better-than-anticipated January data (inflation, payroll, ISM surveys) have supported markets this year so far…Will higher global liquidity offset cyclical weakness via Central/Commercial Bank tightening? Global Liquidity/Monetary Policy: Central Bank balance sheets (reduced Quantitative Tightening pace since October/22 in the U.S.) appear to be expanding and used to maintain financial stability while slowlyContinue reading “Beware the ides of March”

Global Liquidity growth is almost back to positive in December,  but signs of economic deflation and weakening demand… Global Liquidity Growth in December (the latest available month) of (0.3%) was far below the trend growth of 7% but bottomed in November. The large increase month-over-month is related to the stimulus provided by China, which offsetsContinue reading “Trending in the Right Direction…”

This week we have reviewed cyclical and secular trends as it relates to growth and inflation and how these trends may impact asset markets. But first, an analogy to help us work through the current environment. For those of us that have driven in winter conditions and snowy roads (similar to the picture above), theContinue reading “Looking for Traction: Disinflationary trends are positive, but may indicate further weakness to come”

Happy New year to everyone! We wish you a happy and prosperous 2023. Review of 2022 and 2023 Outlook 1)In 2022, the Buy & Hold Balanced Benchmark of 60% US Equities and 40% US Bonds had the 6th worst year since 1871. Portfolio diversification was non-existent as Inflation uncertainty dominated growth uncertainty causing bonds andContinue reading “Staring into the Market Abyss In 2023…FY2022 Review and Model Portfolio Update”

In this post, we cover the recent data regarding the state of the global economy focusing on recent employment and inflation reports (lagging indicators) and trying to glean if we can see the light at the end of the tunnel of the rate hiking cycle/reduction of liquidity. We have noted in the past the importanceContinue reading “Light at the end of the tunnel?”

Global Liquidity Growth in October (the latest available month) of (6%) was far below the trend growth of 7% and may be close to bottoming in the next few months. Global Liquidity has been below trend since November 2021 and the trend-following portfolios have been allocated to the Safety portfolio since January 2022 generally asContinue reading “Model Portfolio Update – December 2022”