The Institutional Risk Analyst

The markets got their rate cut over the past six months and now may have to give some of that back.

If you believe that there is no recession coming in 2025, what is the logical response from an informed investment professional?

The Treasury should begin to buy gold again to demonstrate that the dollar is real.

How will the sudden shift in Fed policy impact financials? Are we headed for a recession?

Why should a private Fannie Mae be a 20% risk weight under Basel III, but PFSI or Mr. Cooper (COOP) are 100%?

If President Donald Trump wins in November, he’ll be more than justified in demanding Jerome Powell’s immediate resignation.

As the federal debt rises, bank reserves must rise as well and with it inflation.

Banks lose money every single day by holding onto a below market security from the 2019-2021 period.

In 2019, the FOMC essentially nationalized the US money markets, eliminating private price discovery for a representation of a market.

GS saw loss provisions fall slightly in Q2 2024 to $282 million but the number was still $600 million in the first half of the year...

The Basel Accord is one of the single biggest examples of a regulatory agency literally creating a new law from whole cloth.

Notice that the Fed stress test is silent on trillions of dollars in mark-to-market losses facing US banks from COVID-era securities

Ginnie Mae would rather have issuers raise the NPV of the MSR in cash today than take the price risk of holding the whole MSR through time.

Citigroup leads the pack with a net loss rate of 133 basis points (bp) that is almost five times the average for Peer Group 1 at 27 bp.

In the 1950s through maybe into the late 1990s, the FOMC could control mortgage interest rates....

Powell won’t hit the two percent target, but he won’t change the target either.

Obviously, there should be no interest rate cuts by the FOMC without deficit reduction by Congress.

We think it is reasonable to push expectations of a cut in the target for Fed funds into Q1 2025. 

The fixation with the idea of resolving large zombie banks without public expense is evidence of our collective delusion. 

Only in the strange confines of Washington do you still find people who think that the federal budget deficit is not a problem.