What are they saying? Market Movers Speak Out: Revisiting 15 Intriguing Quotes from May's Headlines - Superstonk Edition.
Good afternoon and happy Friday Superstonk! I hope everyone is enjoying a terrific Friday and start to the weekend.
On the heels of this comment in another post:
I think it is a great idea to put together a cross section of all the quotes that lend insight to what the bankers and regulators are saying.
I thought I would share with you 15 quotes that have caught my eye since the beginning of May.
1.) 5/1/2023 FDIC board member Jonathan McKernan:
https://www.reddit.com/r/Superstonk/comments/134idnb/fdic_board_member_jonathan_mckernan_we_should/
I am pleased we were able to deal with First Republic’s failure without using the FDIC’s emergency powers. It is a grave and unfortunate event when the FDIC uses these emergency powers. Any decision to use the FDIC’s emergency powers should be approached skeptically, taking into account the unique facts and circumstances of the time, and with careful attention to the implications for the future.
The March 12 rescue of SVB and Signature’s uninsured depositors was an admission that 15 years of reform efforts have not been a success. Many of the Dodd–Frank Act regulations were prescriptive, burdensome, and expensive. Yet still a failed bank’s investors do not always bear the consequences of the bank’s poor risk management. And yet still the banking system is not resilient to failures of bank supervision.
More work remains to be done. We should avoid the temptation to pile on yet more prescriptive regulation or otherwise push responsible risk taking out of the banking system. Instead, we should acknowledge that bank failures are inevitable in a dynamic and innovative financial system. We should plan for those bank failures by focusing on strong capital requirements and an effective resolution framework as our best hope for eventually ending our country’s bailout culture that privatizes gains while socializing losses.
2.) 5/1/2023 Secretary of the Treasury Janet Yellen:
https://www.reddit.com/r/Superstonk/comments/13523z5/secretary_of_the_treasury_janet_yellen_sends/
79 times since 1960 this charade has been played.
However, if ever there was a time for this to be different, now would be it? Not to get political but no side has a majority and some individuals have greater weight in this political process then ever before.
With it being that 'season' and with some having 'aspirations' and willing to make noise to make something happen, paired with an ongoing banking crisis, and untamed inflation--them not blinking seems to be on the table, especially with how credit default swaps continue to increase?
3.) 5/3/2023 Commissioner Hester M. Peirce:
https://www.reddit.com/r/Superstonk/comments/136t09g/commissioner_hester_m_peirce_on_proposed_share/
4.) 5/3/2023 Commissioner Hester M. Peirce:
https://www.reddit.com/r/Superstonk/comments/136tgm7/commissioner_hester_m_peirce_on_amendments_to/
She CANNOT support requiring large hedge fund advisers to file a current report as soon as practicable, but no later than 72 hours from the occurrence of one or more trigger events:
Current Reporting for Large Hedge Fund Advisers and Quarterly Event Reporting for All Private Equity Fund Advisers
Currently, advisers to private funds file Form PF on a quarterly or annual basis, depending on the size and type of private funds they advise. The amendments to Form PF will also require large hedge fund advisers to file a current report as soon as practicable, but no later than 72 hours from the occurrence of one or more trigger events. Such trigger events will include certain extraordinary investment losses, significant margin and default events, terminations or material restrictions of prime broker relationships, operations events, and events associated with withdrawals and redemptions.
5.) 5/3/2023 SEC Chair Gary Gensler:
https://www.reddit.com/r/Superstonk/comments/136xyvf/gensler_under_the_final_rule_these_new_moretimely/
https://www.sec.gov/files/ia-6297-fact-sheet.pdf
https://www.sec.gov/files/ia-6297-fact-sheet.pdf
6.) 5/4/2023 SEC Chair Gary Gensler:
https://www.reddit.com/r/Superstonk/comments/137wo5s/sec_alert_sec_chair_gary_gensler_statement_on/
7.) 5/8/2023 Chicago Fed President Austan Goolsbee:
https://www.reddit.com/r/Superstonk/comments/13bw6ka/federal_reserve_alert_chicago_fed_president/
"I think the context of the debt ceiling, now kind of coming due, becoming more salient, is gonna make for potentially a lot of weird things to happen in financial markets"
Wait, so the completely manufactured political crisis (about agreeing to pay for what has already been spent) is going to 'make for potentially a lot of weird things to happen in financial markets'?
8.) 5/9/2023 NY Fed President John C. Williams:
https://www.reddit.com/r/Superstonk/comments/13d6ib7/ny_fed_president_john_c_williams_the_federal/
- Do you feel pandered to?
He expects inflation to decline to around 3-1/4 percent this year, before returning to our longer-run goal of 2 percent over the next two years.
- As tighter monetary policy continues to take effect, he expects real GDP to grow modestly this year, with growth then picking up somewhat next year.
- He anticipates slow growth will continue to cool the labor market, with unemployment gradually rising to about 4 to 4-1/2 percent over the next year.
9.) 5/10/2023 Carl Icahn:
https://www.reddit.com/r/Superstonk/comments/13dtm7d/icahn_enterprises_responds_to_selfserving_short/
How is this related to GME? Icahn allegedly holds a short position in GameStop:
https://www.thestreet.com/memestocks/gme/gamestop-stock-carl-icahns-short-could-backfire
https://www.reuters.com/business/carl-icahn-holds-short-position-gamestop-bloomberg-news-2022-11-21/
Reducing the position potentially? Buying pressure?
10.) 5/10/2023 SEC Chair Gary Gensler:
https://www.reddit.com/r/Superstonk/comments/13dzq6o/sec_chair_gary_gensler_many_hedge_funds_are/
- "Broadly speaking, our proposal would require clearinghouses to ensure that their members bring in all of their repo transactions, both sides of any cash trades executed on an IDB platform, and certain additional cash transactions."
- "Moreover, many hedge funds are receiving the vast majority of their repo financing in the non-centrally cleared market, where haircuts or initial margin requirements are not necessarily applied. This might create greater risk in times of stress, particularly when large, interconnected hedge funds achieve high leverage from banks and prime brokers in the Treasury markets."
- "On the cash side, in addition to scoping in both sides of the IDB trades, the proposal would scope in trades between clearinghouse members on the one hand and hedge funds, levered accounts, and registered broker-dealers on the other hand. This would help address the potential contagion risk that could flow through to the markets if a hedge fund or levered fund were unable to deliver on a transaction."
11.) 5/10/2023 SEC Chair Gary Gensler:
https://www.reddit.com/r/Superstonk/comments/13e3ldw/sec_chair_gary_gensler_while_the_sec_oversees/
- Municipal Securities is a $4 trillion market.
While the SEC oversees more than 7,000 public company issuers, there are around 50,000 municipal securities issuers.
- "Strikingly, there are approximately one million different outstanding municipal securities—more than 30 times the number of outstanding corporate bonds."
12.) 5/11/2023 Federal Reserve Governor Christopher J. Waller:
https://www.reddit.com/r/Superstonk/comments/13eph96/federal_reserve_governor_christopher_j_waller/
"If you think about it, there is a huge set of shocks that could hit at any given time. Some of those shocks do hit, but most do not. Our approach promotes general resiliency, recognizing that we can't predict, prioritize, and tailor specific policy around each and every shock that could occur."
13.) 5/11/2023 SEC Commissioner Mark Uyeda:
https://www.reddit.com/r/Superstonk/comments/13er1yo/sec_commissioner_mark_uyeda_to_further_illustrate/
14.) 5/11/2023 Under Secretary for Domestic Finance Nellie Liang:
https://www.reddit.com/r/Superstonk/comments/13ev7zb/remarks_by_under_secretary_for_domestic_finance/
"Staff at FSOC member agencies have been working to improve monitoring systems to identify potential emerging financial stability risks posed by highly-leveraged hedge funds. Work in this regard has been focused primarily on common, broad practices and activities, rather than on individual institutions. For example, based on a recent pilot data collection, a significant share of bilateral repo transactions collateralized by Treasury securities – a key source of hedge fund leverage – appear to be traded with zero haircuts."
15.) 5/12/2023 Fed's Michelle Bowman:
https://www.reddit.com/r/Superstonk/comments/13fmtwg/inflation_alert_feds_michelle_bowman_in_my_view/
"In my view, our policy stance is now restrictive, but whether it is sufficiently restrictive to bring inflation down remains uncertain."
"In my view, the most recent CPI and employment reports have not provided consistent evidence that inflation is on a downward path, and I will continue to closely monitor the incoming data as I consider the appropriate stance of monetary policy going into our June meeting."
"In response to the recent bank failures, it is tempting to engage in a wholesale revision of the bank regulatory framework. Before changing rules, we need to take a critical look at actual weaknesses, and acknowledge the strengths that should be preserved."
"Accountability is critical for both the bank and for supervisors. Where regulators have failed in supervision, we must hold ourselves accountable."
"Calls for radical reform of the bank regulatory framework—as opposed to targeted changes to address identified root causes of banking system stress—are incompatible with the fundamental strength of the banking system."
TLDRS:
https://www.reddit.com/r/Superstonk/comments/12eba61/treasury_alert_janet_yellens_remarks_ring_al
