Sweet

Isn’t the real problem that the rates were at near zero for so long, and that some banks didn’t understand interest rate risk? And isn’t the cause the covid lockdowns and the Treasury writing a cheque to everyone? Powell is given a mandate by Congress, one of which is an inflation target, and he has only a few levers to pull. He sat on his hands for a few months thinking inflation would go away and it didn’t - and got criticised for doing so. Even after these supposedly historic rate rises we are only at 4%. Banks can be the safest they have ever been AND you can still have these problems, it’s not mutually exclusive. I don’t think Powell has done a good job and I don’t think he has done a bad job. He’s just done the job his role is mandated. He is responding to a problem largely made in by policy makers, although he should be blamed for sitting at near zero for so long.

Powell is getting a bad rap, but many of the problems are those he inherited. Policy makers and central bankers kept rates at near zero for nearly 15 YEARS. Some of those years rates needed to be low but not for 15 years. Lawmakers shut the economy down for covid, and handed out free money to everyone to just go buy whatever, a double whammy for inflation. Now everyone is freaking out because interest rates are 4 and a bit percent?

It’s like everybody just found out that banks don’t always hold all the cash necessary to cover every deposit, and that some deposits are not insured. None of this is new information but it has caused a freak out. It’s potential problem that some banks are sitting in large mark to market losses but that’s only a problem if deposits are rapidly pulled.

I don’t know the answer, but investopedia says: “public holders of option contracts must indicate their desire to exercise no later than 5:30 p.m. [Eastern Time] on the business day preceding the expiration date.” Which would indicate no they cannot exercise the option after hours on the date of expiry.

OK, which COBF member was this: ”I feel like a sucker’: I bought stock for $18 after an IPO. The underwriter’s brokerage house had a $30 price target. It fell below $1. How could they get it so wrong?” https://www.marketwatch.com/story/i-feel-like-a-sucker-i-bought-stock-for-18-after-an-ipo-the-underwriters-brokerage-house-had-a-30-price-target-it-fell-below-1-how-could-they-get-it-so-wrong-2daa9e5c?mod=the-moneyist

Of course. I’m not referring to the quality difference between XLE and XOP and how that affects how oil companies track oil prices. Rather the belief that energy companies must move in lock step with oil. If companies are managed well, they should disconnect from oil prices relative to the companies characteristics. I think we are saying the same thing.

Yes, a new government may not be kind. As attractive as the yield is, I think it’s sorta of a too good to be true yield.

Never noticed this before. Is that even real? There has to be a catch.

I agree that there is a strong base here to at least not drop further, not sure how high oil prices rise. Key here for investors is: 1 - companies are disciplined 2 - companies return a lot of money to shareholders If that happens shareholders will get paid.

WTI hasn’t spent a single day above 85 this year, have to go back to November. Hopefully many of these guys have locked in higher prices.

I don’t agree that the oil fundamentals are compelling right now. We have come off quite a large build in the past few months. There also appears to be a decent chunk of supply coming on the market this year - the IEA (which is terrible I know) is predicting over 2 million extra supply this year. You also have OPEC sitting on a couple of million barrels or great of spare capacity. The price action recently appears to be something related to the wider market, it’s risk off out there. Not sure I see much further downward pressure in price but I don’t see oil heading above 100 anytime soon. Many oil companies themselves are not doing enough to repair their image. They presided over a lot of value destruction and the sector is avoided like the plague. Oil companies are viewed as planet destroyers. I don’t expect these companies to re-rate at higher multiples, so they need to find discipline and figure out how to return as much value as possible to shareholders.

It's not meaningless. The disconnect is that the energy sector on any long term measure hasbeen underperforming oil price: From 2015 highs: oil -35%, XOP -65% From 2016: oil +75%, XOP -5% From 2017: oil +29%, XOP -33% From 2018: oil +14%, XOP -22% From 2019: oil +33%, XOP -10% From 2020: oil +24%, XOP +10% Companies did destroy a lot of value and that is certainly part or even most of the reason for the disconnect... but the disconnect is real. But OK, if you believe its pointless to compare with the 2015-2020 period is because of shareholders value destruction, then you should also believe that the material improvement in oil companies balance sheets, dividends, share buybacks etc. should result in energy companies outperforming oil. And these companies obviously should not have a 1:1 relationship with oil if they are making money and producing value for shareholders.

Are they? Oil price was at this level or lower for long periods from 2016 and oil company prices were higher than now.

Ditto, know almost nothing about it. I just felt like the Fed had come out with a solution for the mark to market paper losses and that this wasn’t fully understood. Unfortunately the position was so small that it means almost nothing to me, even after todays 150% rip from the lows. If I had of known more I could have sunk a lot more into it.

What price did you get filled at? I’m going to let mine run… or die

Good point. I think higher rates is a good thing for everyone. Good for savers, better long term for the economy. Interest rates at near zero for so long was a mistake.

Too soon to tell, but as weird as it may be, it might also be how it shakes out.

Couldn’t help myself, but I bought a micro position in Western Alliance - less than 1%. Its really a lotto play, I admit to know very little about the business, and I think there is a very high chance it goes to zero.

If it’s only the end of the beginning, can you give us a general price and a general time on when we can expect the end? 3,500 in October last year, nearly 6 months ago, is the current low - after many posts ITT.

Would do no harm for whatever plan there is in place to be communicated before Mondays open.

Not a semi-jerk. A full blown dick head.

Castanza, could you help me understand the chart. Obviously the more retail deposits you have the lower risk your total deposits are - according to the chart at least. However what about loans vs securities? Can we generalise that the higher the loans plus securities the better? JPM, C and SIVB are notable outliers here.

The collapse of Silicon Valley Bank has been followed by expectations that there will be more runs on regional banks - who knows. Regardless of what happens it’s seems likely that stock prices of regional banks that will get throttled by the extreme shift in sentiment. If a few survivors can be identified a lot of money could be made.

Bill claims his fund is long only now and has stopped shorting stocks. I wonder if that long puts counts as not being short.