Markets Dissect Yellen's Every Nervous Word

On the heels of Tuesday’s bloodbath, markets were broadly constructive early Wednesday - until Janet Yellen started talking again.

Yellen was back on Capitol Hill to deliver more testimony and made several adjustments to her posturing from the previous day. In her prepared remarks, she made two key changes:

1. On liquidity injections, she added: “we would be prepared to take additional actions if warranted”.

2. On the overall banking system, she removed the phrase “the U.S. banking system is sound.”

Jittery traders and algos reacted to the fear-inducing deletion by selling financials and bank stocks, and reacted to the dovish assurance that the money printer would again go brrr in a crisis by buying tech, gold and bitcoin.

Here’s what we brrr’d today:

• Janet Yellen: with great power, comes great liabilities

• Fed expands Balance Sheet to $8.7T

• when it comes to banking, it's always good to have a plan B (and maybe even a plan C) - just not CashApp

WHAT WE OWN

$BTC, $ETH, $NVDA, $AAPL, $COIN, $XOM, $TSLA, $MSFT, $AMZN

The SEC announced a lawsuit against $COIN, bringing the stock down 14% and ruining our portfolio’s day.

Want our concise thesis on each asset? Refer a friend to The BRRR and we’ll send you the doc.

Yellen’s Flip Flop

• Treasury Secretary Yellen says they're ready to whip out the emergency refund tool again “if warranted”.

• Lawmakers criticize Yellen for rewarding big banks for taking excessive risks, while smaller institutions are left to fend for themselves

• The current FDIC insurance limit of $250,000 may have been set in 2010, but it feels like it's from the Stone Age, lawmakers say

  CNBC

Fed Expanding Balance Sheet

• The Fed scooped up a casual $94.5 billion in assets this last week in some classic balance sheet expansion. It's been indulging in foreign repo and credit extension binges.

• The reverse repo facility has been particularly active - a record $60B worth of treasuries were redeemed for dollars by foreign banks this week.

• The Fed has actually continued their quantitative tightening program, albeit at low levels. They sold off a meager $3.5 billion of their $7.9 trillion.

  Zerohedge

TWEET OF THE DAY

The SEC announced a slew of regulatory actions against crypto firms this week, missing the forest for the trees

AI ART OF THE DAY

The Yellen Flip Flop

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