Fri.Mar 10, 2023

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The Fed is Breaking Things (and it could get worse)

The Big Picture

Armchair quarterbacking the decisions of the Federal Reserve long ago became a blood sport. With the benefit of hindsight, we all are genius central bankers. I particularly loathe managers who lay all the woes of the world at the feet of the Federal Reserve. For more than a century, America’s central bank has been a key part of the investing environment, and it’s your job as an active manager to incorporate their probable policy decisions into your strategy.

Banking 341
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SVB

The Reformed Broker

The spectacular blow-up currently taking place at SVB and its primary subsidiary, Silicon Valley Bank, is the biggest story in the markets this week. SVB is systemically important for the technology sector and its Northern California ecosystem. As Jim Cramer put it last night, the Federal Reserve has been firing a machine gun at the economy for the last 12 months but it hasn’t hit anything yet.

Economy 279
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10 Friday AM Reads

The Big Picture

My end-of-week morning train WFH reads: • Crypto Bank Had a Boring Collapse, Also Silicon Valley Bank : Elsewhere in boring maturity mismatches and a lack of deposit diversification. ( Money Stuff ) • Why daylight saving is so hard on the body — and what to do about it : Every process within the body, from sleep to metabolism, runs on an internal clock, known as circadian rhythm.

Startup 281
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Weekend Reading For Financial Planners (March 11-12)

Nerd's Eye View

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that President Biden released his latest budget proposal this week, which calls for a range of tax increases on higher-income and wealthier taxpayers to fund deficit reduction and the president’s spending priorities.

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Register Now: Sneak Peek Into Close Automation SkyStem Web Demo

Technology is rapidly changing the way accountants perform and manage month-end activities. Spreadsheets, email, and shared drives no longer have to slow us down. Join us as we present a "sneak peek" recorded demo of SkyStem's month-end close solution – ART. In under four weeks, your team can start reaping the benefits of month-end close automation by vastly reducing spreadsheets, cut down on reconciliation work, speed up the month-end close, and better manage your remote team.

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Friday links: breaking things

Abnormal Returns

Markets When markets get volatile and chaotic, there's often no benefit to moving first. (thereformedbroker.com) 0DTEs now dominate S&P 500 options trading. (marketwatch.com) Corporate profit margins are coming in, but not all that quickly. (tker.co) Strategy Investing off headlines is a fool's errand. (theirrelevantinvestor.com) Don't try to invest like Yale, unless you have Yale-like resources.

More Trending

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Podcast links: the flexible work economy

Abnormal Returns

Listening In order to keep growing, podcasting is becoming platform agnostic. (sportico.com) Apple ($AAPL) is set to launch a standalone classical music app. (theverge.com) Economy Michael Klein talks with Brad DeLong author of "Slouching Towards Utopia." (econofact.org) Derek Thompson talks with Greg Ip about the growing influence of industrial policy.

Economy 130
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Clips From Today’s Halftime Report

The Reformed Broker

Final Trades: Oracle, Gold & Treasuries from CNBC. The post Clips From Today’s Halftime Report appeared first on The Reformed Broker.

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February Employment Report: 311 thousand Jobs, 3.6% Unemployment Rate

Calculated Risk

From the BLS : Total nonfarm payroll employment rose by 311,000 in February, and the unemployment rate edged up to 3.6 percent , the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality, retail trade, government, and health care. Employment declined in information and in transportation and warehousing.

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A Reverse Minsky Moment

The Irrelevant Investor

I will remember this week for the rest of my life. As an investor, you get used to stock market volatility. Economic volatility on the other hand has a way of sticking with you. In the aftermath of the pandemic, the Fed was driving an overheating economy at 150 miles per hour. And when it realized it was going too fast, it jammed on the brake pedal as hard as it could.

Economy 135
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2024 Lending Outlook: Innovations and Evolutions in the Financial Sector

As we step into 2024, the lending landscape evolves rapidly with technology, regulations, and market dynamics driving change. For banks and financial institutions to stay competitive and meet the evolving needs of their customers, these drivers must be understood and engaged with. Lenders can anticipate significant transformation fueled by technological advancements, regulatory shifts, and changing consumer behaviors.

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Credit Risk Happens Fast – a SVB Postmortem

Discipline Funds

One of the themes I’ve been discussing lately is how inflation risk has been evolving into credit risk. What I mean by that is that we’re currently navigating the economic bust portion of the cycle where inflation is a falling risk and credit deflation risk arises, in large part, because the Fed has reacted so quickly to bring inflation in.

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Comments on February Employment Report

Calculated Risk

The headline jobs number in the February employment report was above expectations, however employment for the previous two months was revised down by 34,000, combined. The participation rate increased, and the unemployment rate increased to 3.6%. Leisure and hospitality gained 105 thousand jobs in February. At the beginning of the pandemic, in March and April of 2020, leisure and hospitality lost 8.2 million jobs, and are now down 410 thousand jobs since February 2020.

Numbers 124
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S&P 500 Snapshot: Lowest Finish in Over Two Months

Advisor Perspectives

The S&P 500 closed out Friday with its lowest finish since January 5th. The index was down 1.45% from Thursday and down 4.55% from last week. With that being said, the index is still up 0.58% YTD but dropped to 19.49% below its record close.

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What Income Level Makes You Rich?

A Wealth of Common Sense

According to the U.S. Census Bureau, the median income in the United States is a little more than $70,000 a year. There is a sizable range of results around the median so it can help to break things down even further by percentiles. DQYDJ has a good breakdown of the data that shows the bottom 10% of earners, the bottom 25%, median, top 25%, top 10% and top 1%: You can also see these breakdowns by age: These figures can.

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Banking on Loyalty: Holistic Financial Advice for Unparalleled Business Growth

Speaker: Joe Buhrmann, MBA, CFP®, CLU®, ChFC® Senior Financial Planning Practice Management Consultant eMoney Advisor

During an era of evolving consumer preferences, the banking sector is undergoing a profound shift. As customers continue to broaden their perspectives, banking professionals must support their customers' financial wellness by providing holistic financial advice that aligns with individual goals and circumstances. Without adapting, financial institutions will find that loyalty may crumble amid uncertainty.

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The Big Four Economic Indicators: February Employment

Advisor Perspectives

This commentary has been updated to include this morning's release of non-farm employment. February saw a 311,000 increase in total non-farm payrolls. The unemployment rate rose to 3.6%. The Investing.com forecast was for 205,000 jobs gained.

Economics 104
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: Elon Musk gave 12.5 million Tesla shares to charity last year: amended filing

MarketWatch

Tesla Inc. TSLA Chief Executive Elon Musk gave more than 12.5 million shares of the company’s stock to charity, according to a filing with the Securities and Exchange Commission on Friday that amended a previous filing because the shares reported had not been adjusted for last year’s stock split. Based on SEC filings last month, MarketWatch and others reported that Musk had donated nearly 12 million shares worth about $2 billion to an undisclosed charity.

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RIA Roundup: LMP-backed Pathstone Sells Stake to Kelso & Company

Wealth Management

Multi-family office Pathstone announced investments from two different backers this week, Allworth Financial made its second and third acquisitions of the year and Apella bought a California RIA. Meanwhile, NewEdge Wealth has a new principal.

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: Silicon Valley Bank out of S&P 500 index; Insulet selected to replace it

MarketWatch

S&P Indices said late Friday that Insulet Corp. PODD will replace Silicon Valley Bank parent SVB Financial Group SIVB in the S&P 500 index SPX at the open on Wednesday. The bank was shut down Friday by regulators. Insulet is medical device company based in Massachusetts. Insulet stock rallied 7% in the extended session after ending the regular trading day down 1%.

Banking 98
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Transforming Lending: Understanding the Power of Digital Platforms

Digital platforms can provide you with plenty of solutions, yet many are still intimidated by them. It's time to end that worry and embrace what could make a major difference for your bank. Understanding how they work and how to best utilize them for your banks is key toward success. In this article, Biz2X breaks down all things digital platforms, including the many advantages of embracing them.

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Bank Run?

Random Roger's Retirement Planning

The stock market had a rough couple of days due to a couple of bank failures and a few other financials that got hit hard in what looks like sympathy. Silvergate (SI) is a player in the crypto world in a way that appears to be far more involved than just about any other bank out there. It was involved with FTX and Alameda Research. That's really a live by the sword die by the sword situation unique to SI or any other banks that might be similarly enmeshed in crypto.

Banking 90
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: Pfizer wins FDA approval for its migraine nasal spray

MarketWatch

Pfizer Inc. PFE said Friday the U.S. Food and Drug Administration has approved its migraine nasal spray Zavzpret. The treatment is the first and only calcitonin gene-related peptide (CGRP) receptor antagonist nasal spray that treats acute migraine in adults, the company said in a statement. A Phase 3 study of Zavzpret found it was statistically superior to placebo on both primary endpoints of pain freedom and freedom from most symptoms at two hours after a dose.

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Q&A: Joel Bruckenstein on What to Expect at T3

Wealth Management

The advisor technology conference co-founder on what he expects to see at next week's gathering in Tampa—no surprise, artificial intelligence and machine learning will be heavily featured, especially in the Emerging Technologies sessions.

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Top 15 Highest Paying Jobs for 15-Year-Olds

Good Financial Cents

It can be difficult for 15-year-olds to find a job that pays well. By federal law , 14- and 15-year-olds are prohibited from working more than three hours a day on school days and eight hours per non-school day. Therefore, young teens are limited in how much money they can make after school. Also, minimum wage laws vary from state to state. As per the federal minimum wage requirement, all workers in the United States are legally entitled to receive a minimum hourly wage of $7.25 or higher depend

Food 85
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Quick Start Guide to a Crystal Clear Close

Did you know automating your month-end close can save up to 40% of the time typically spent on manual reconciliations? CFOs and controllers are leveraging SkyStem's workflow management and reconciliation tool to eliminate costly mistakes, ditch manual reconciliations and close faster. Want to know how they do it? Download our Quick Start Guide to a Crystal Clear Close!

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A Frank Chat With The Founders Of Vise

Wealth Management

Our technology columnist spoke with Samir Vasavada and Runik Mehrotra of Vise about recent layoffs, his own startup past and the firm's future.

Startup 97
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Are Short Covering Trades Informative?

Alpha Architect

The importance of the role played by short sellers has received increasing academic attention in recent years. Short sellers help keep market prices efficient by preventing overpricing and the formation of price bubbles in financial markets. Market efficiency is important because an efficient market allocates capital efficiently. If short sellers were inhibited from expressing their views on valuations, securities prices could become overvalued and excess capital would be allocated to those firm

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Private Wealth Asset Management Snaps Up $1.9B Team From Wells Fargo

Wealth Management

Three former Carson Wealth advisors have joined Private Wealth Asset Management by way of Wells Fargo Private Bank.

Assets 98
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: Roku says it ‘does not know’ how much of its cash it will be able to recover from SVB

MarketWatch

Streaming platform Roku Inc. ROKU on Friday said it “does not know” to what extent it would be able to recover the cash it has deposited with the recently-failed Silicon Valley Bank. Roku said it had cash and cash equivalents of around $1.9 billion as of Friday, with around $487 million — or roughly 26% — at the bank. Roku said its deposits with SVB were “largely uninsured.

Banking 76
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The Blueprint for a Customer-Centric Digital Lending Experience

Creating a winning digital lending experience requires plenty of focus on the needs of customers and more. Biz2X Chief Product Officer Aaron Traub covers everything from how to create such an experience, areas to hone in on, pitfalls to avoid, and plenty more in this insightful article. Discover how to utilize new technology without alienating existing customers, what to emphasize when working on your platform, and how to utilize the data at your disposal while not becoming overly reliant on it.

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Six Reasons Tax Season Should Also Be Estate Planning Season

Wealth Management

Helping improve your clients' estate plans can ensure their financial wellness for generations to come.

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: SVB Financial stock slides 66% premarket as fears of a potential run on the bank continue

MarketWatch

SVB Financial Group SIVB, the parent of Silicon Valley Bank, saw its stock tumble more than 66% in premarket trade Friday, in a continued response to reports late Thursday that several funds were advising clients to pull their money, sparking fears of a run on the bank. Bloomberg News late Thursday reported that Founders Fund, the San Francisco-based venture-capital fund co-founded by Peter Thiel, has advised companies to do just so.

Banking 76
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The WealthStack Podcast: Creating a Frictionless Wealth Management Experience with Stephen Daffron of BetaNXT

Wealth Management

CEO Stephen Daffron discusses BetaNXT's focus on solving customers' most demanding integration challenges.