"My Mom And Your Mom" Caused The SVB Fiasco -- March 10, 2023

WOW, WOW, WOW: I wrote this yesterday and today it's on CNBC and it's the reason SVB is in trouble. Savers like "my mom and your mom" are / were withdrawing their money from their banks -- "a run on their banks" -- to buy CDs. Wow. What a great blog. LOL. Link here.

A reminder, my favorite chart:

I remember the "push back" I got when I first posted this graphic, many, many months ago. LOL. Paying attention to details.

From yesterday:

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Mother Goose

Advice for today:

Jack Sprat could eat no fat. 

His wife could eat no lean. 

And so between them both, you see, 

They licked the platter clean.

A "talking head" on CNBC repeated the meme: with interest rates this high, bonds are competing with stocks.

My mother knew nothing about investing and kept all her money in cash, money market accounts, and occasionally CDs. She was thrilled with 14% interest rates in the 1980s (?). 

My father, whether he knew anything about investing or not, I don't know. He always said it was always better to be "lucky" rather than "smart."  He did incredibly well in the market despite no formal training and no informal education with regard to investing. I don't think he ever read a book on invested, and ever read The WSJ. About all he did was watch the CNBC crawler ten minutes every day while checking the day-old Bismarck Tribune "money section." 

But he did most of his investing during a multi-decade bull market. He never invested in Treasuries or bonds; he only invested in stocks.

Both mom and dad ended up financially quite well off, probably better than most.

So, for mom, bonds did not compete with stocks. Bonds competed with cash under her mattress.

For dad, stock did not compete with bonds. AAPL competed with SLB for his dollars. 

And it continues in the next generation. For my wife, the money market accounts compete with cash in her savings account; and, for me AAPL competes with DVN for my dollars. 

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.

Breaking: Literally And Figuratively -- Watching It In Real Time -- This May Not Be A One-Off March 10, 2023

SVB: I'll have to wait for the book. 

How much will this affect California budget. Remember: 1% of California taxpayers account for 49% of all California revenue.

MOST IMPORTANT BANK IN THE SILICON VALLEY JUST FAILED -- California regulators shut down the bank!

Half of all venture capital money in the San Francisco Bay area goes through this bank. Huge bank for Chinese companies.

Breaking: SIVB trading -- halted.  8:00 a.m. CT -- March 10, 2023. Already trying to sell itself -- and apparently those attempts not going well.

SIVB: wiki -- 

On 9 March 2023, shares of SVB Financial plunged more than 62% after the company proposed a share sale to shore up its balance sheet which had suffered a $1.8 billion loss on Treasuries due to rising inflation.

SIVB: link here.

• Pre-market: down another 44%. Could open under $60.  [Later: could open under $35. Some feel that SIVB is NOT a one-off.]
  
• Culprit: Treasuries. 
• Five days, from $275 to $106.

•  Cryptocurrency: pending.

• JPow's third big problem. Credibility. 

He's publicly committed to 2% inflation rate. "Everyone" knows that's impossible and in a modern economy like the US, a 2% inflation rate is fantasy and, in fact, is actually detrimental to the well-being of the nation and the working class. A two-percent inflation rate could be seen by some as a personal vendetta for JPow and that he is willing to take the nation down if he has to, to get to 2%. It will be interesting to see if JPow will moderate his statements at risk of "negative" headlines  on "flip-flopping."

Busy, Busy, Busy Day -- TGIF -- March 10, 2023

Updates 

Whatever happened to Erin Burnett? The cable ratings. From here to obscurity. Link here.

Chips: updating the semiconductors. Link here. INTC: too little, too late?

JPow's two big problems.  a run on banks and the implosion of cryptocurrency. Link here.

• SIVB: link here.
  

• SVB: wiki.
  
• Pre-market: down another 44%. Could open under $60.  [Later: could open under $35. Some feel that SIVB is NOT a one-off.]
  
• Culprit: Treasuries. 
• Five days, from $275 to $106. 
• SIVB: wiki -- 

  On 9 March 2023, shares of SVB Financial plunged more than 62% after the company proposed a share sale to shore up its balance sheet which had suffered a $1.8 billion loss on Treasuries due to rising inflation.

•  Cryptocurrency: Silvergate Capital.

• JPow's third big problem. Credibility. 

He's publicly committed to 2% inflation rate. "Everyone" knows that is impossible and in a modern economy like the US, a 2% inflation rate is fantasy and, in fact, is actually detrimental to the well-being of the nation and the working class. A two-percent inflation rate could be seen by some as a personal blood feud for JPow and that he might be willing to take the nation down if he has to, to get to 2%. It will be interesting to see if JPow will moderate his statements at risk of "negative" headlines  on "flip-flopping."

AAPL and what it will buy next? No one knows. Link here.

Lego. Update.

EVs. Lordstown, and GM. Link here.

• Big rigs: Daimler, Cummins, and Navistar taking the early lead. Link here.

LNG. The 21st century -- America's century. Link here.  

Copper. Copper demand forecast to increase 600% by 2030. Link here.

Best buy of the day. In the past two weeks, a 2-liter bottle of Diet Coke went from $2.59 to $2.79 to $2.99. But yesterday at Market Street, Colleyville, a 2-liter bottle of Zero Coke was on sale for $1.79. Yes, I stocked up. Two. LOL.

Original Post

Jobs report today:

• up 311K vs 225K estimate.
• unemployment rate: 3.6%; up from 3.4%.
• 0.2% increase vs 0.3% to 0.4%: average hourly wage increase, m/m; one of the smallest ever
• Steve Liesman:
• yada, yada, yada -- good in terms of putting folks back to work
• not sure why unemployment number rose
  
• the market likes these numbers; Dow goes from minus 90 to positive 20, back to minus 40 back to plus 30.
  

Most analysts track U-3. Not me. U-1. Link here. If one actually looks at the definitions of the various categories, one will understand why I prefer U-1.

High on my list for today:

• Whatever happened to Erin Burnett? The cable ratings.
• Chips: updating the semiconductors.
• JPow's two big problems.  a run on banks and the implosion of cryptocurrency.
• JPow's third big problem.
  
• AAPL and what it will buy next?
• Lego.
• EVs.
• LNG. 
• Copper.
  

Comments on the above.

• Huge fail. Erin's move to obscurity.
• Wiki has new numbers for chips. 
• CNBC starting to sound frantic. Government talking heads are telling us to stay calm. Never a good combination.
• Credibility.
  
• No one knows.
• Folks have a lot of money to spend on plastic bricks.
• More and more it looks like 2023 is the "make or break year" for EV manufacturers. Rivian may be the biggest surprise.
• The 21st century: America's century. 
• The numbers are simply surprising.
  

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Back to the Bakken

Active rigs: 44.

Peter Zeihan newsletter.

WTI: $75.13.

Natural gas: $2.484.

Sunday, March 12, 2023: 39 for the month; 201 for the quarter, 201 for the year
39138, conf, CLR, Micahlucas 7-5H,
39130, conf, Crescent Point Energy, CPEUSC Claire Rose 4-31-30-159N-99W-MBH,

Saturday, March 11, 2023: 37 for the month; 199 for the quarter, 199 for the year
39131, conf, Crescent Point Energy, CPEUSC Amelia Grace 4-6-7-158N-99W-MBH,

Friday, March 10, 2023: 36 for the month; 198 for the quarter, 198 for the year
39137, conf, CLR, Micahlucas 6-5H1,
39132, conf, Crescent Point Energy, CPEUSC Claire Rose 3-31-30-159N-99W-MBH,

RBN Energy: how much will price impact future US crude production growth? Archived.

For the first 10 years of the Shale Revolution, it was a foregone conclusion: High prices stimulated more drilling, and more drilling meant higher production. It worked in both directions. When prices crashed, so did production. The correlation was great. The relationships were right on cue in 2014-15 when $100/bbl crude crashed to $30, rebounded to $60 by 2019, and wiped out in 2020 when the COVID meltdown hit.

But then the market shifted. As prices ramped up in 2021 — eventually to astronomical levels in 2022 — the phenomenon of producer discipline kicked in, with E&Ps capping their drilling programs and returning a significant slice of their rising free cash flow to their shareholders.

The near-term market implications of this new dynamic have been extensively documented in the RBN blogosphere. But what does it mean for the future? Especially for intrepid energy analytics companies (like RBN) that, by necessity, must project producer behavior far into the future to determine what production will look like next year, next decade and even further over the horizon. In this new RBN blog series, we will examine that dilemma, the assumptions RBN makes, and what our forecasts for the next few years look like.

Going To Bed -- I Won't See E-Mail, Comments Until Tomorrow -- March 9, 2023

The Golden Triangle -- Denton, Ft Worth, Dallas -- March 9, 2023

Wow, I wish every mom-and-pop retail investor had the opportunity to spend a month in the Golden Triangle of north Texas. 

One doesn't hear that term often (if ever, any more) but it's the real deal.

Link here:

The three points of the Golden Triangle in north Texas: Denton (immortalized in Rocky Horror Picture Show); Dallas, and Ft Worth.

Grapevine - Euless are smack dab in the middle of that triangle.

When we moved to north Texas in 2013, we lived in The Vine Apartments in Grapevine, since renamed Vine South. We moved in 2020 (?) to Euless, to a much nicer apartment complex, Cortland, about a quarter-mile down the road. It has since changed hands and is now known as The Edge. No one knows why. The edge of the Golden Triangle? Who knows? 

I don't often drive but I am working on several summer projects for Sophia and I have had to visit a number of spots to get all the things I need: Harbor Freight, Walmart, Hobby Lobby, the US Post Office, Target, Market Street.

It is impossible to articulate why I love north Texas, but let's start. The following pertains to what I see in the center of the Golden Triangle; not all data points are likely to pertain to the points (Denton, Ft Worth, or Dallas proper).

• no state income tax
• weather: perfect 11.5 months of the year, especially if you like to swim
• clean streets and neighborhoods
  
• incredibly low utility costs
• $75 to register each of my three old cars (actually, I only register two of them; I quit registering the third one about two years ago)
• incredibly low rent compared to California, let's say
• the roads are incredible; best in the nation; both in their layout and their maintenance;
  
• we live less than ten minutes from the best airport in the country DFW
• even in rush hour, smooth sailing to DFW and back
• and, light rail to DFW if one wants that alternative
• Texans drive as if they have a purpose; no-nonsense driving, but incredibly friendly; no road rage but an occasional idiot -- but ...
• except for speeding, everyone seems to follow the rules, and the police are out in force, keeping speeding to a minimum;
• every Texan with two vehicles has an F-150 or F-250 as either his first or second vehicles;
• the other car, as often as not, a Porsche, Corvette, or Lamborghini;
• if the Texan in Southlake (a neighbor of Grapevine) owns a third car, it's a Tesla
• there's a new phenomenon with regard to home building; folks are building their homes on two residential lots and the house is the size of two McMansions -- I've never witnessed this phenomenon before; reminds me of the homes in west LA, in the Hollywood Hills; perhaps, locally, it is the Californians moving to Texas;
• I think Houston, TX, holds the US record for highest percent of obese residents; the other side of that coin: the best restaurants in the US and lots of them, and wow, does Euless and Grapevine have more than their share of great restaurants and in the Golden Triangle, the number is growing;
• if one want to eat out, my own neighborhood has the following grocers: Tom Thumb (most expensive, worse selection); Albertson's (better); Target (good); Walmart (best on price and number of line items); and I understand HEB -- the best grocer in the world is coming to our neighborhood sometime in the next two years; and I haven't even mention Whole Foods, Market Fresh, Sprouts, and Kroger's -- all here but requires a car to drive there. Also H Mart and 99 Ranch Market -- Asian supermarkets.
• non-grocery retail; second to none with shopping malls everywhere; the best is the outdoor mall in our backyard
• Chicken N Pickle; link here; five minutes by bike from our apartment; this may just be the biggest phenomenon to come out of the pandemic
• link here: see screenshot below;
  
• dine-in cinema-multiplex theaters; Japanese restaurants; 
• high school, college, and club sports facilities that are absolutely incredible; one needs to see them to believe them;
• baseball fields; soccer fields; 
• Dallas: pro basketball, football, soccer, baseball, hockey; the kids all have their own team to follow
• schools: really, really good;