Macro Insiders: Deep Dive from Julian – Small Banks, Big Problems

Regional banks are short of capital. Caught out by rising rates, assets (especially long duration fixed income) fell. Shareholder dilution beckons but equity valuations are low. As banks are forced to compete for deposits with money market funds, Net Interest Margins are declining. Bank runs are a rising risk, in a social media-induced frenzy. The Fed’s focus remains inflation. R** is on our doorstep.

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