Another tidbit,
Mary ERDOES, JPM. RISK management in banking is essential. 3 recent bank failures (Silvergate, SVB, Signature) were partly from weaknesses in risk controls. The banking system as a whole is in much better shape now than during the GFC 2008-09.....JPM sent a delegation to UKRAINE in February because JPM is #1 debt issuer for Ukraine; it gave Ukraine 2-yr payment deferrals after the war started; it will also be involved heavily in post-war reconstruction and redevelopment (and some thought that JPM was pulling a stunt with its Ukraine trip).
https://ybbpersonalfinance.proboards.com/thread/416/barron-march-20-2023-2

I remembering first hearing the term "disintermediation" when I was earning my MBA in New York City in 1970:
dis·in·ter·me·di·a·tion
/disˌin(t)ərmēdēˈāSH(ə)n/
nounECONOMICS
reduction in the use of intermediaries between producers and consumers, for example by investing directly in the securities market rather than through a bank.
That's exactly what rational consumers are doing today: withdrawing money from bank accounts paying 5/100 of a percent to earn 4 or 5% from short-term treasury bills or notes. The banks can no longer count on depositors not paying attention to the low rates they were paying. Obviously not the only problem but a part of the cause.
And a question for Yogi, who is on the list of "two dozen" banks who would have negative equity if all their bond portfolios were marked to market?
Excellent discussion on this thread. Thanks.

"Consulted by policymakers and able to nudge his peers into action, JPMorgan Chase CEO Jamie Dimon played a key role in a bank rescue effort this week -- a situation sparking reminders of 2008.."
"Dimon, who helms the largest US bank by assets, also came to the rescue in the 2008 financial crisis by buying Bear Stearns and some assets of Washington Mutual."
https://www.livemint.com/news/world/jpmorgan-chief-jamie-dimon-s-key-role-in-rescue-of-first-republic-bank-11679103476432.html
Kudos to the big banks for helping the flailing regional banks. Even Peck's bad boy, Wells Fargo, is ponying up in the effort. There are some winners out of the mess!

>>>>“5. the commercial real estate market, which is reliant on floating rate securities, is a major and generally unrecognized risk. High quality lenders like BlackRock “are handing the keys back to the bank.” Eventually the government will need to pursue a solution like the Resolution Trust (1989-1995) to work to resolve the savings & loan crisis”<<<<
Interesting comment especially since RiverPark offers a commercial floating rate fund RSRIX/FX
There the manager feels his fund can generate 10% returns both this year and next year. See commentary here https://www.riverparkfunds.com/assets/pdfs/rpfrcf/commentary/RiverPark_Floating_Rate_CMBS_Fund_4Q22_Investor_Letter.pdf
Interesting backstory on RCRIX. From early November through mid February this fund steadily rose without one down day (excluding monthly dividend payout days). I thought I had found another IOFIX. I bought at the beginning of January and it quickly became my largest holding. Sold after it had an uncharacteristic 2 cent down day in early March and it is down working on a 8 day losing streak. Have since been banned from all RiverPark funds. Even more interesting a friend who held this fund placed an order to sell late one evening after market close. He received a ban notice the next trading day before market close and his order was even filled. I had never heard of that before,

ACCOLADES WEEK, March 13-17, 2023
Ongoing accolades for everyone writing in the MFO monthly commentaries. BUT, in particular for this past week, are very large accolades to everyone who spent a lot of time researching articles and information -as it happened-, attempting to keep pace with hourly/daily changes with actions taken by the FED, Treasury and FDIC. Many conversations, for sure.
The MFO community spent a lot of time considering which information was pertinent and then having to discover which information was valid for posting; as well as many excellent insights, opinions and suggestions. In many cases, it takes a lot of time to find, digest and post a link. The past week's events, as chronicled here, were like to reading a book, as it was being written.
Such a fine fellowship with this investment group, to be associated with.
THANK YOU ALL.......
--- Will or should the FDIC insurance limit be adjusted upward again? During the 2008 market melt, the insurance was adjusted from $100,000 to $250,000. This amount was made permanent with legislation in 2010. Perhaps this amount should be linked to Bureau of Labor data for CPI, as with Social Security, for annual adjustments. If this method was in place now, the $250,000 limit (2010) would be $344,000 today. Well, a thought and perhaps an assurance for the public.
Equity losers short list for the week, which this week includes many banks, as well as insurance companies, etc. Select/click onto a particular equity. The List is at one day, however select the 5Day or YTD for other time frames. This is a Google link, for those who are averse to traveling to such a site. Although an equity list, reflects what has taken place this past week and is relative to bond yield/pricing.
--- Those MMKT's. Stagnant yields again this week, as they've hit a plateau; but most still having a yield between 4.2 and 4.5%, unless it's a magic sauce MMKT. Perhaps another bump up in yields IF/when the FED raises rates again. Some funds may show a change of a few 1/100s% upward this week.
--- U.S.$ DOWN -.76% for the week, +.10% YTD flat
*** UST yields chart, 6 month - 30 year. This chart is active and will display a 6 month time frame going forward to a future date. Place/hover the mouse pointer anywhere on a line to display the date and yield for that date. The percent to the right side is the percentage change in the yield from the chart beginning date for a particular item. You may also 'right click' on the 126 days at the chart bottom to change a 'time frame' from a drop down menu. Hopefully, the line graph also lets you view the 'yield curve' in a different fashion, for the longer duration issues, at this time. Save the page to your own device for future reference. NOTE: take a peek at the right side of this graph to find the yield swings of the past week.
--- The NAV's list below reflects the week ending, but doesn't reveal the large daily swings throughout the week. IG bond 'yields' ended with large down moves from a flight to safety from the failure of SVB. However, many non-IG bond funds remain with large yields, if one chooses to travel that path. Those more connected to the stock market and equity in general, had some difficulty with positive pricing.
A good day to you.....
----------------------------------------------------------------------------------------------------------------------------------------
---Several selected bond funds returns since October 25, 2022. I'll retain this date, as it is a recent inflection point when bonds began to have positive price moves. We'll need to watch if this was just a 'blip'.
NOTE: I've kept the prior dated reports in the beginning of this thread; and have added YTD to this data.
For the WEEK/YTD, NAV price changes, March 13 - March 17, 2023
***** This week (Friday), FZDXX, MMKT yield continues to move with Fed funds/repo/SOFR rates and ended the week at 4.46% (flat lined now). The core Fidelity MMKT's have continued a slow creep upward to 4.22%. The holdings of these different funds account for the variances at this time.
--- AGG = +1.44% / +3.09% (I-Shares Core bond), a benchmark, (AAA-BBB holdings)
--- MINT = -.14% / +1.12% (PIMCO Enhanced short maturity, AAA-BBB rated)
--- SHY = +1.31% / +1.75% (UST 1-3 yr bills)
--- IEI = +1.88% / +2.8% (UST 3-7 yr notes/bonds)
--- IEF = +1.98% / +4.07% (UST 7-10 yr bonds)
--- TIP = +.49% / +2.05% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
--- VTIP = +.89% / +1.52% (Vanguard Short-Term Infl-Prot Secs ETF)
--- STPZ = +.96% / +1.42% (UST, short duration TIPs bonds, PIMCO)
--- LTPZ = -1.7% / +3.37% (UST, long duration TIPs bonds, PIMCO)
--- TLT = +1.19% / +7.76% (I Shares 20+ Yr UST Bond
--- EDV = +1.16% / +10.25% (UST Vanguard extended duration bonds)
--- ZROZ = +.52% / +10.5% (UST., AAA, long duration zero coupon bonds, PIMCO
--- TBT = -2.5% / -14.% (ProShares UltraShort 20+ Year Treasury (about 23 holdings)
--- TMF = +3.05% / +19.6% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 3x version of EDV etf)
*** Additional important bond sectors, for reference:
--- BAGIX = +1.03% / +2.88% (active managed, plain vanilla, high quality bond fund)
--- LQD = +1.1% / +3.11% (I Shares IG, corp. bonds)
--- BKLN = -1.87% / +1.16% (Invesco Senior Loan, Corp. rated BB & lower)
--- HYG = -.1% / +.73% (high yield bonds, proxy ETF)
--- HYD = +.04%/+1.67% (VanEck HY Muni)
--- MUB = +.93% /+1.98% (I Shares, National Muni Bond)
--- EMB = -.94%/+.34% (I Shares, USD, Emerging Markets Bond)
--- CWB = -1.05% / +1.34% (SPDR Bloomberg Convertible Securities)
--- PFF = -3.19% / -.02% (I Shares, Preferred & Income Securities)
--- FZDXX = 4.46% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022.
Comments and corrections, please.
Remain curious,
Catch

"Sherman’s policy preference would be a 1-2 bps / year charge for insurance on accounts over $250k with an opt-out provisio"
Exactly what I suggested several days ago:

The problem is with accounts in excess of 250k: there is no government mechanism for protecting those accounts. There should be, and those depositors should pay a reasonable amount for that insurance. If a depositor chooses not to participate, they're on their own. If a bank gets into trouble, they're on their own.
Simple as that.
Old_Joe March 12 in Fund Discussions

@Observant1 thank you very much

David Sherman founded Cohanzick Management and CrossingBridge Advisors.
He is the Lead Portfolio Manager for the CrossingBridge fund family.
Mr. Sherman also manages two RiverPark funds (Cohanzick Management is sub-adviser):
RiverPark Strategic Income Fund, RiverPark Short Term High Yield Fund.
Link1
Link2

https://www.sec.gov/Archives/edgar/data/1766436/000138713123003557/lft_497-031723.htm
497 1 lft_497-031723.htm SUPPLEMENT
Leader High Quality Floating Rate Fund
Institutional Shares: LCTIX
Investor Shares: LCTRX
Supplement dated March 17, 2023
to the Prospectus and Statement of Additional Information (“SAI”) dated September 30, 2022,
each as may be amended from time to time
The Board of Trustees of Leader Funds Trust approved various changes to the Leader High Quality Floating Rate Fund (the “Fund”). These changes include changing the Fund’s name and adding Class A shares. Because the Fund’s name change impacts its 80% investment policy, the Fund is providing shareholders with at least 60 days’ notice of the name change and revised 80% investment policy.
Name Change
Effective May 16, 2023, the Leader High Quality Floating Rate Fund is renamed the “Leader Capital High Quality Income Fund.”
Revised 80% Investment Policy
As stated in the Fund’s prospectus, the Fund may change its 80% investment policy without shareholder approval upon 60 days’ written notice. This supplement notifies shareholders that, effective May 16, 2023, the Fund’s Principal Investment Strategies on page 2 of the summary prospectus, including its 80% investment policy, are revised as follows.
Principal Investment Strategies: Under normal circumstances, the Fund invests at least 80% of its net assets, plus any amount of borrowings for investment purposes, in high-quality debt securities. For the purposes of the Fund’s 80% investment policy, the Fund defines high-quality as being rated at the time of purchase as no lower than the A category by Standard & Poor’s Ratings Group, Moody’s Investors Service, or Fitch Ratings, Inc. The debt securities in which the Fund invests include the following U.S. dollar-denominated domestic and foreign securities:
· bonds and corporate debt;
· agency and non-agency commercial mortgage-backed securities (“CMBS”) and residential mortgage-backed securities (“RMBS”);
· collateralized loan obligations (“CLOs”) that are backed by domestic and foreign debt obligations;
· collateralized debt obligations (“CDOs”) that are backed by domestic and foreign debt obligations; and
· U.S government securities.
The Fund normally invests in debt securities with an interest rate that resets quarterly based London Inter-Bank Offered Rate (“LIBOR”) or indexes designed to replace LIBOR such as the Secured Overnight Financing Rate (“SOFR”), Effective Federal Funds Rate (“EFFR”), or Overnight Bank Fund Rate (“OBFR”). The Fund allocates assets across debt security types without restriction, subject to its 80% investment policy.
While the Fund invests without restriction as to the maturity of any single debt security, the Fund’s portfolio average effective duration (a measure of a security’s sensitivity to changes in prevailing interest rates) will be up to 15. The Fund’s average effective duration will change depending on market conditions. The Fund uses effective duration to measure interest rate risk.

YBB, Thanks for the Informative & detailed Post with links.
I was worried about the limits of SIPC & FDIC plus what to do under these scenarios.
Fwiw... I've been following Jennifer's (RiA) Diamond NestEgg YouTube FREE ChnL
...SIPC is covered after 13 min on video & can be fast-forwarded or dragged with a mouse.
Hope it helps here on many other investing subjects she also covers.
Thanks.

One thing @crash is correct in starting this thread. Bond market volatility is absolutely mind blowing these days.

Munis appear to have reversed course to the upside this week.

Wouldn't you know?
https://www.cnbc.com/quotes/HYMU?qsearchterm=hymu
My TIPs fund was up today, too. SCHP.
...And aluminum, green power: NHYDY was up by the tiniest of fractions. But down significantly, lately, along with almost everything else.
...Still too early to see the daily OEF mutual fund prices.
Making way too much sense here:
"The bond market has exactly the opposite view on inflation. It is screaming that inflation is entirely in control and headed down. projected longer term inflation now in the bond market is about 2.1% I admire the confidence of bond traders. But folks tell me it might be that inflation is dead because banking crisis kills growth and inflation. I do not see that in my consumption basket generally speaking."

The bond market has exactly the opposite view on inflation. It is screaming that inflation is entirely in control and headed down. projected longer term inflation now in the bond market is about 2.1% I admire the confidence of bond traders. But folks tell me it might be that inflation is dead because banking crisis kills growth and inflation. I do not see that in my consumption basket generally speaking.

Concentrated, high quality, small cap growth strategy. 400 bps lead over the Russell 2000 since the beginning of the 21st century. The Big Dog had a stint at Jundt back in the '90s (who now remembers the glory days of Jundt Growth Fund, which was magic until it wasn't?) and graduated from St. Thomas, my son's alma mater. Most of the rest of his team have dumb ol' Ivy League degrees.

I believe it is due to both the magnitude and pace of rate hike. It is the most aggressive hike since the 1970’s Volcker days. Right now there is lots of uncertainties of which shoe will drop next after SVB, Credit Sussie, First Republic Bank (other regional banks)….
And yet inflation is far from being contained and how high a the Fed raises the rate when something seems to be broken right now?

On rather short notice, Cohanzick invited people to listen to David Sherman talk about the significance of “recent developments.” Reportedly, 90 people called in. No slides, just David at his desk talking through two topics and fielding questions.
Highlights:
1. none of his funds have exposure to banks or thrifts. Early in his career, at Leucadia, he was taught that this additional financial sector focus offered “incremental gains that were not worth the risk.”
2. in a “moral hazard” sort of way, institituions worldwide have “adopted an umbrella policy: avoid any failure at all cost.”
3. Sherman’s policy preference would be a 1-2 bps / year charge for insurance on accounts over $250k with an opt-out provision and some sort of preferential payments scheme (akin, I think, to what happens in a bankruptcy liquidation) to avoid runs on the bank. (James Mackintosh, in Friday's WSJ, speculates on investment regulations to pursue the same end; he suggests requiring banks to invest only in short-term Treasuries as backing for regular deposits, with greater flexibility for special high-yield accounts.)
4. He believes interest rates will remain higher for longer than commonly expected, unless the fed has to accommodate a systemic risk. A fed “pivot” now would be “ a bad sign regarding speculation and future inflation.”
5. the commercial real estate market, which is reliant on floating rate securities, is a major and generally unrecognized risk. High quality lenders like BlackRock “are handing the keys back to the bank.” Eventually the government will need to pursue a solution like the Resolution Trust (1989-1995) to work to resolve the savings & loan crisis.
6. Q: is the banking system close to melt-down? A: No. With the exception of a few incidents involving insolvent micro banks, there are no “FDIC-regulated banks where uninsured depositors didn’t get their money back.”
7. Q: are you positive on high yield this yield? A: we don’t speculate but “In general, active HY will outperform stocks over the next couple years based on valuations.”
8. Q: has the risk-return equation become more compelling? Are you playing offense or defense now? A: “I love this question. Compliance hates it. We love markets like this, even if they’re frustrating, difficult or stressful because they create volatility and volatility creates opportunity. Things were more shaky a year ago ... we’ve become more offensive over the past several months Dry powder not diminished but new money is getting invested at substantially higher returns. Dry powder (at year’s end his funds were 30% and 70% “dry powder”) reflects view that we’ll have more opportunities and we will not be forced to take duration risk. We’re avoiding highly stressed or distressed issuers whose business model is questionable relative to other opportunities. We think there will be more of opportunities; commercial RE will raise its ugly head to create them.”
9. Q: where do you get such great ideas? A: swiped one from a student in my Global Value Investing class at NYU. (Roughly.)
 
10. Q: Has the opportunity set changed since 1/1/2023? A: "We focus on business model, the group tried to be disciplined in our credit work in all periods though everyone occasionally gets out of their lane. We’re focusing on staying at the highest level of the capital structure. Social media makes everything worse. Investors do less work, act more in reaction to events, and since it’s easier to move money, it’s also easier to over-react. Across portfolios, we have the highest level of leveraged loan ownership in years. LLs significantly higher return than the bonds, assuming no rate collapse.”
David either reads the board or has a news alert set for his name, so I’m confident that if I’ve materially misrepresented his words, he’ll help guide us back to the light.
For what that’s worth, David

One thing @crash is correct in starting this thread. Bond market volatility is absolutely mind blowing these days.

+1111111 Stunning moves...

Technically that is true. An FDIC-insured bank is ineligible to file for bankruptcy under the bankruptcy code. "Instead, regulators seize insolvent or unsound banks or thrifts and give the Federal Deposit Insurance Corporation (FDIC) the authority to resolve them ... almost always ... through a receivership." However, a bank's parent holding company can file for bankruptcy, as SVB Financial has done.

See 11 U.S.C. §§ 109(b), (d) (2006) (stating that banks are ineligible for bankruptcy, so that neither the bank nor the bank's creditors can place the bank in bankruptcy). [However,] bank holding companies can file for bankruptcy in the United States, and many of the largest bankruptcies on record have been bank holding companies. See ... Washington Mutual.

Why Banks Are Not Allowed in Bankruptcy (footnote 2)
11 U.S. Code § 109
SVB Financial bankruptcy filing

The fallout from the SVB (Silicon Valley Bank) collapse has finally put fear into the hearts of investors, and especially options traders, pushing up the VIX from the low 20s to a close of 26.14 on March 15, 2023. That took the VIX Index up above the prices of all of its futures contracts, which creates a unique oversold sentiment situation that is the subject of this week’s chart.

Might be worth a read:
weekly_chart/vix_index_above_all_of_its_futures

Per CNBC: "Treasury Secretary Janet Yellen told senators that government refunds of uninsured deposits will not be extended to every bank that fails, only those that pose systemic risk to the financial system."
I think that's the right approach to help address the moral hazard question. Given news of the past week or so, if you still happen to have cash in accounts far above the FDIC/SIPC coverage limits, you should probably review your risk level and diversify into multiple banks and/or 'safer' government debt.
https://www.cnbc.com/2023/03/16/svb-signature-bank-failures-yellen-says-us-banking-system-is-stable-and-deposits-remain-safe.html