Originally published on March 13th 2023
Market update:
Dear readers, after the dramatic events unfolding over the end of last week ending with no more than 3 banks in the United States crashing ESGFIRE thinks we’ve just witnessed the capitulation event which will actually break the interest rates from rising any further.
To support of our thesis we would like to qoute Goldman Sachs from yesterday March 12th:
“In light of recent stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its March 22 meeting with considerable uncertainty about the path beyond March.”
And to also qoute our good friend and famous microcap investor Paul Andreola who put this in words better than we could on short notice:
“There is a lot to unwrap here and since I’m not a banking expert I will leave it to others to explain the circumstances. For this, I highly recommend you view this video for an explanation and possible outcome to these events: https://www.youtube.com/watch?
All that said, I see no reason for any kind of panic. If anything, I view this as a potential capitulation event. This may even be the “breaking” event that causes the US Fed to alter its tightening stance. ”
ESGFIRE agrees on the analysis made by Paul Andreola on this one and we think this might have been the final push which actually broke a part of the system due to the extreme pace of quick interest rates rising. Not to say the current situation is desirable or risk free but do not listen to only the fear mongerers on financial media!
One interesting side story here to also take note of : It Appears Peter Thiel could be one of the starting points to why Silicon Valley bank $SIVB had a bank run. Did he short the stock ?
Wishing you all a great week!
As always feel free to reach out via email or our discord!
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