Now we begin to see the consequences of cheap money
We are currently in a market with tight monetary conditions, and therefore this leads to a bear market, there will be some bullish momentum of course, which I try to take advantage of.
But these strict monetary conditions have consequences. The first is that if interest rates are higher, financing is more expensive, therefore companies with a lot of short-term debt will suffer. And the second, the banks, are going to suffer twice, on the one hand if loans and mortgages rise, customers will have a hard time paying their debts and on the other the investments in bonds of these past years, when a bond yielded close to from 0 today they have much less value.
And this leads me to my opinion for some time now, current banks do not know how to make money, they are highly exposed and with a lot of assets with a value much less than what they declare. And here we have the case of SVB Bank.
All banks are in a situation similar to SVB Bank, only that they have transferred the valuation of these bonds to a future, so that the balance does not mean losses.
Look for financial entities with balance sheets full of bonuses and bet on the downside, is my recommendation.
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