Eurodollar University The Banking Crisis Was Just the Start —What’s Really Happening Behind the Scenes
Feb 2, 2025
The podcast dives into the fallout from Silicon Valley Bank's failure, revealing its lasting impact on global finance. It discusses how the banking crisis has triggered economic turbulence, exposing unsustainable recovery patterns. Listeners learn about the shifting dynamics of interest rates and bond yields, alongside the repercussions for banking credit. The conversation also highlights the deeper economic challenges that extend beyond immediate crises, pointing to a looming risk of stagnation and widespread impoverishment.
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The Banking Crisis Aftermath
- The 2023 banking crisis, though seemingly contained, has had lasting negative impacts on the global economy.
- The Federal Reserve, while preventing widespread bank failures, may have lost the larger economic war.
German Bond Yields and Economic Forecasts
- Germany's two-year bond yield peaked on March 9, 2023, the day before SVB's failure, and has declined since.
- This market behavior suggests an early recognition of economic trouble, predating the Fed's rate hikes.
Two-Year Bond Yield as an Economic Indicator
- The two-year bond yield, balancing central bank influence and market fundamentals, reveals shifts in economic sentiment.
- The German two-year yield's divergence from ECB policy after March 2023 signals a market disregard for central bank actions.