The failure of Credit Suisse is a bit of a shock, but to many finance people it’s not exactly a surprise – Credit Suisse developed a reputation for being “accident-prone”. You might not have heard of Silicon Valley Bank, who's failure in our view is much more meaningful. That’s because the failure of Silicon Valley was due to a number of key factors – factors that are relevant to all banks and will linger for some time. Is this the start of a new Banking Crisis?
It’s been a rather fascinating few months in finance-land. On the surface, little has happened – economic data has been relatively ‘as-expected’ and the markets have been quite benign. But under the bonnet, things have shifted quite meaningfully.
We’re all excited about the prospect of the rate of inflation reducing. Remember however, this doesn’t mean the price of things falling… it simply means a reduction in the rate of increases.
What do we believe in the current market? Market cycles, Inflation, Quantitative Easing, Forward Price Earnings Multiples, or the unwinding of excesses. Or is it just the Chinese Curse; 'May you live in interesting times."