A new study of US banks by DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP, identified some ten percent as "challenged" among the selected group of banks, each with assets of over $10 billion. "The rapid shift from a recessionary environment to one heavily influenced by inflation has created serious challenges for many banks, " according to BOVE. "Banks are attempting to adjust to these changes but, in some cases, structural issues at some of these institutitons inhibit their ability to do so." The CONVERSATION also takes another look at the events that triggered the collapse of Silicon Valley and two other banks. BOVE lashes out at bank managers for the latest crisis from their "greed to maximise profits" to their risk management. MAT VAN ALSTYNE, ODEON co-founder and managing partner, points the blame in part at the Dodd-Frank Act enacted after the global financial crisis to (ironically) curb risk. "These are tense times in the financial markets," BOVE says.

Elsewhere, the CONVERSATION looks at the latest dip in the US unemployment rate. While this decline is clearly a positive, a gathering storm may finally be imminent. VAN ALSTYNE says the inverted yield curve is signalling a recession of dramatic scale which could impact Fed decision making. Still, there is some good news in the US manufacturing sector, with signs of green shoots. Joining the CONVERSATION is our host, JOHN AIDAN BYRNE.

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The US Fed’s purchase of trillions of dollars in long duration securities at what is regarded as relatively low rates has had a more far-reaching impact on its book value than many may have realized, according to DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP. If the Fed’s net worth is adjusted by "marking" these securities to "market," its holdings translate into a negative net worth of $1 trillion, he says. Here’s the thing: The Fed can no longer print money as it did in the past because printing money today has an unwelcome inflationary effect, he explains. On the one hand, the Fed is withdrawing money out of the US banking system and on the other, it is putting money back into the economy, he says. How it can reconcile both activities is questionable, he adds. Still, MAT VAN ALSTYNE, ODEON co-founder and managing partner, questions whether the Fed’s unprecedented financial affairs ultimately matters given the fractional nature of the banking system. This is built on an edifice of confidence and in the health of US banks, he says.

The CONVERSATION also looks at the soaring US Federal debt, citing new statistics. “The government continues to believe it can borrow as much money as it wants and it continues to act, in fact, as if it is going to do so,” BOVE says. Turning attention to America on the world stage and China’s muscular industrial policies, host JOHN AIDAN BYRNE presents a proposal to lure manufacturing production back to the US. Where is America in the midst of a flurry of international initiatives among China, Russia and nations in other hotspots who've taken decisive leads lately, ask BOVE and VAN ALSTYNE.

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On Tuesday, March 28, the US Senate held hearings on the swift collapse of Silicon Valley Bank (SVB), the 16th largest bank in the US. By late last year, it had assets of about $209 billion. SVB's collapse, the second largest bank failure in US history, sent shock waves through the financial system worldwide. Fears and doubt were compounded by the failures of Silvergate and Signature Banks in the US, and the acquisition of Switzerland's troubled Credit Suisse by cross-town rival UBS. Another challenged US bank, First Republic, raised the stakes. DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP, followed the Senate hearings closely, and sees banking changes ahead. He has sympathy for the lawmakers who said Federal regulators dropped the ball.

"This [SVB collapse] is something the Federal Reserve is going to have to answer for," he says. BOVE also has his own questions about what happened at SVB from ignoring regulators' warnings to the propriety of bonuses paid at SVB. Regulations will now be tightened in multiple areas of the banking sector, according to BOVE. Meanwhile, MAT VAN ALSTYNE, ODEON co-founder and managing partner, warns that the US may be in a so-called Minksy Moment, the end stages of an extended phase of economic prosperity that propels investors and consumers to take on excessive risk, leading eventually to a financial and economic disaster. Host JOHN AIDAN BYRNE raises the spectre of moral hazard, the slippery slope of endless rounds of bailouts and the consequent and dire threats to the foundations of the free enterprise system in America.

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More than a week after the sudden collapse of SILICON VALLEY BANK, and the failures at SIGNATURE and SILVERGATE banks, the CONVERSATION picks up where we left off on our last Special Episode. We look at the financial wreckage of these disasters as well as the trouble at FIRST REPUBLIC BANK, and at UBS's agreement to purchase a troubled crosstown rival CREDIT SUISSE for over $3 billion. Veteran bank analyst DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP, offers his accounting of today's state of the banking industry. Is the sector still in trouble, a state of rot? Are other banks still vulnerable? BOVE takes a close look at the financial and capital strength of the industry across multiple lines, to offer his informed opinion.

"The risk managers were deficient at all of these banks when they didn't hedge [their risk] against 30-year Treasuries," says BOVE, responding to MAT VAN ALSTYNE, ODEON co-founder and managing partner, adding that the same "deficiency" is evident across multiple financial institutions, including the US Fed in an era of rising interest rates. On the rescue of the US banking industry, BOVE singles out the banking industry itself for stepping up with capital for a sector in a crunch. "The salvation of the banking industry last week was not the Fed, " he says. The CONVERSATION also looks at the role of the media in the latest crisis. Finally, host JOHN AIDAN BYRNE raises questions about the dynamics of bank runs in an age of digital commerce.

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This Special Episode of ODEON CAPITAL CONVERSATIONS examines the series of events that led to the sudden collapse of SILICON VALLEY BANK, ranked America's 16th largest bank, as well as the demise of SILVERGATE and SIGNATURE banks. The CONVERSATION will evaluate the impact on the industry, the financial system and on the broader economy. DICK BOVE, chief financial strategist at ODEON CAPITAL CONVERSATIONS, a Wall Street veteran who has covered the banking sector for decades, offers his expert analysis on these latest banking events to rock the financial markets. MAT VAN ALSTYNE, ODEON co-founder and managing partner, will present his own well-informed take and raises many of the most important questions. 

"This was a digital bank run, the likes of which we have never seen, which is why I think the [regulators] had to rescue the banks," says VAN ALSTYNE. According to BOVE, "Small depositors may not be the only ones questioning the banks." He adds: "Investors are clearly questioning the earnings numbers and returns being posted by the banks. For example, bankers have been using stock buy-backs to bolster earnings per share results at a faster rate than the growth in actual net income." Joining the CONVERSATION, our host JOHN AIDAN BYRNE reprises some of the key developments.

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The Fed has entered a new phase after fifteen years of Quantitative Easy (QE), or easy money. The "experiment" says DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP, has gone very badly wrong. In this episode, he presents the quandary for the Fed in this period of rising interest rates with short term rates now rising faster than long rates. "This is the most threatening issue in the financial markets today," he says. In short, BOVE believes the Fed is now facing a unique Savings & Loans (S&L) type crisis. The S&L crisis from 1986 to 1996 was the failure of a large number of US savings and loan associations,  a disaster fuelled  by rising interest rates. "I'm sticking with my prediction," says MAT VAN ALSTYNE, ODEON co-founder and managing partner, speaking generally about the Fed's challenges. "They're going to have to cut interest rates and commence QE before they want to because the economy is going to hit a lot more trouble."

The CONVERSATION opens with an eye on the market's dependence on data rather than on investing concepts. BOVE dismisses this popular approach to tackling the latest course of the market, saying investors should look more closely at the fundamentals and create investment concepts. "It bothers me a lot," says BOVE. "It tells me these people have no idea what they are talking about, " he adds of market professionals who depend on data.  The CONVERSATION also looks at the clearer signs and signals of the much debated recession anticipated by analysts. "It has been a running joke on Wall Street, this calling for a recession, " says host JOHN AIDAN BYRNE, as we examine the signs of a coming recession and BOVE parses the comments of two prominent bank CEOs. 

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DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP, takes a close look at the full extent of the US Government's off-balance sheet debt. In doing so, he describes an immense financial burden, a sum as much as three to six times that of America's national debt now at $31.4 trillion. BOVE has studied the work of JAMES HAMILTON at the University of California and looked closely at other research to present a damning account of America's off-balance sheet liabilities. This debt burden, "the massive negative net worth of the US government," BOVE explains, arises from government guarantees for the financial obligations of multiple agencies in sectors from student lending to Social Security.

Meanwhile, the CONVERSATION looks at the trajectory of interest rates on the heels of January's Personal Consumption Expenditures (PCE) report. The overall PCE rose 5.4 percent in January from a year ago, and was up 0.4 percent monthly. Investors were shocked at the January reading, which came in higher than expected, an outcome that has since challenged the market, BOVE says. He warns of the urgent need to control money printing and to tame inflation. MAT VAN ALSTYNE, ODEON co-founder and managing partner, presents a scenario where the US Fed could, once again, resume a destructive course of massive money printing to shore up the economy. Joining the CONVERSATION is JOHN AIDAN BYRNE. 

The CONVERSATION begins with the markets negative response to reports by Walmart and other large US retailers showing increased belt-tightening by cash-strapped consumers. The episode also examines whether America is in a financial crisis worse than is reported by the US government. While retail giant Walmart has reported strong sales in recent years, more of the spending is being diverted to the basic necessities like food, with more affluent and price-conscious consumers also rushing to Walmart to pick up deals. That is the view of many analysts including DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP, who notes the rising number of upper income shoppers buying groceries at Walmart, a retailer traditionally the turf of lower-income households. "Consumers are stretching their dollars at Walmart, looking for more ways to save," said MAT VAN ALSTYNE, ODEON co-founder and managing partner.

BOVE presents his analysis on the US trade deficit, which hit a record $1 trillion in 2022. How to pick investments in these volatile markets and in a global economy overshadowed by the rise of autocracies and the war in Ukraine, as well as fears of a pending recession? Start with a concept that has a long-term positive outlook, according to BOVE. He also presents the case for bank preferred securities. On the first anniversary of Russia's invasion of Ukraine, the CONVERSATION asks how it could end peacefully for humanity. "Putin is a mass murderer," says BOVE. He is a vicious and crazed mad man, adds JOHN AIDAN BYRNE, noting the need for fearless and strong leaders to stand up to Putin.

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From the latest Consumer Price Index (CPI) report to DICK BOVE's comprehensive new report on the US economy, this episode of ODEON CAPITAL CONVERSATIONS is a timely analysis on some of the key happenings and events on Wall Street. "Disappointing" is how MAT VAN ALSYTNE describes the latest CPI report published this week, showing a slight overall decline in January in the yearly inflation rate to 6.4 percent, and an uptick on a monthly basis. "I thought that this would be the one," said VAN ALSTYNE, co-founder and managing partner at ODEON CAPITAL GROUP, referring to his disappointment that the latest inflation numbers do not definitively show the Fed has taken control of inflation. "The Fed has never killed inflation until interest rates are above the CPI," he added later.

What are the signs of recession? BOVE, chief financial strategist at ODEON, presents his in-depth findings including a battery of announced layoffs nationwide. VAN ALSTYNE points to the inverted yield curve. There are also signs of financial trouble in how the Fed navigates its campaign to tame inflation. One financial foot wrong could potentially torpedo the US economy as rising interest rates, debt servicing and the specter of inflation wreak havoc.  Elsewhere the CONVERSATION picks up on a recent ODEON talk by Peter Zeihan, author of The End of the World Is Just Beginning. Joining the CONVERSATION is JOHN AIDAN BYRNE who pulls out a significant quote by Leo Tolstoy to calm nerves.

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DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP, says calculating the number of people working in America every month is a mammoth task – and it’s a task that cannot be properly done. That’s why this veteran industry analyst is skeptical of the latest jobs report for January, and of the labor numbers from the Bureau of Labor Statistics and the Census Bureau. The surprising report shows a white hot jobs market in America far exceeding market expectations. With some 11 million job openings, almost twice as many jobs as available workers, BOVE describes the governmental reporting as, ‘the greatest farce known to mankind’ and he attacks the methodology.  MAT VAN ALSTYNE, ODEON co-founder and managing partner, disagrees. What is important, he points out, is the quality of the trend line in the labor statistics which he sees as holding up.

Also on this episode, the Conversation examines how US banks may face pressure from the ranks of  government to raise interest rates on deposit and savings accounts for customers. BOVE offers historical context, noting how a former House Banking Chair, HENRY GONZALEZ, was outraged when banks did not pass along price increases to customer as loan rates were rising. Joining the wide-ranging Conversation is JOHN AIDAN BYRNE.

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