Does the ongoing turmoil in the banking world constitute a “Minksy moment”? Daniel Neilson, assistant professor of monetary economic at Bard College at Simon’s Rock and author of “Minsky” (2019), argues yes. Neilson explores the potential of contagion within the banking world, and he makes the case that the Federal Reserve’s Bank Term Funding Program (BTFP) as well as the FDIC backstop might make this banking crisis short-lived. Neilson shares with Jack Farley several in-depth charts on the Fed’s balance sheet that might indicate a turning point and the pair share their views on the Federal Reserve’s meeting on March 22, 2023. Filmed the afternoon of March 21, 2023.
Daniel Neilson’s article on Silicon Valley Bank: https://www.soonparted.co/p/silicon-valley-bank
Daniel Neilson’s article on Fed’s BTFP and other refinancing channels: https://www.soonparted.co/p/svb-ii
Daniel Neilson’s chart pack on the SVB Panic: https://www.soonparted.co/p/svb-iii
Follow Daniel Neilson on Twitter https://twitter.com/dhneilson
Follow Jack Farley on Twitter https://twitter.com/JackFarley96
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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.__
Timestamps:
(00:00) Intro
(05:08) "This Is A Minksy Moment"
(18:04) The Takeover of Credit Suisse
(28:30) Permissionless
(29:33) The Fed's Bank Term Funding Program (BTFP) vs. The Fed's Discount Window
(39:32) Can The Banking Panic Be Stopped In Its Tracks?
(43:33) Blockworks Research
(44:37) First Republic Bank ($FRC) and Bank Profitability
(49:32) The Fed Readies Its Dollar Swap Lines
(55:43) The Federal Reserve's New Hiking Path