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TheBRRR’s Thoughts

On Wednesday we pointed out that Coinbase’s app was still outside of the top 100.

It still is, but the app and website still crashed on Wednesday amidst a slew of panic buying and overall volatility.

As bitcoin hit a new high of $64,000 users started to report that the app and site were inaccessible and the price swiftly fell under $60,000 before recovering to $62,000 to close the week.

Retail is just starting to show up, yet newly created memecoins like dogwifhat are pumping to $1,000,000,000 market caps 3 months after launch.

Things are gonna get very weird this year.

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NYC Community Bank Crashes After $2.4B Loss Disclosure

WHAT HAPPENED:

• Massive Losses Reported: New York Community Bank (NYCB) disclosed an additional $2.4 billion in losses for the fourth quarter, deepening its financial woes.

• Leadership Changes: The CEO and a closely aligned board member have resigned amidst the crisis, marking a significant leadership shake-up.

• Internal Weaknesses Identified: NYCB admitted to discovering "material weaknesses" in its internal controls, a serious issue that suggests problems with how the bank manages and reports its financial situation.

WHY IT MATTERS:

• Investor Confidence Shaken: These revelations further erode investor trust in NYCB, already weakened by a 54% stock price decline this year. The additional losses and leadership turmoil send a negative signal about the bank's stability and management's capability to navigate through crises.

• Strategic Missteps Highlighted: The situation underscores the risks associated with rapid expansion and acquisitions, particularly NYCB's purchase of parts of Signature Bank. Such aggressive growth strategies have now placed the bank in a precarious financial position.

• Broader Banking Sector Concerns: NYCB's troubles reflect ongoing challenges within the banking sector, especially for smaller lenders grappling with the impacts of high interest rates and a shaky real estate market. The situation revives memories of last year's banking crises, reminding stakeholders of the systemic risks that can emerge in a high-pressure economic environment.

NYT

Fed Governor Waller Hints At Future Moves

WHAT HAPPENED:

• Fed Governor Christopher Waller's Proposal: In light of the recent ISM Manufacturing report, Waller suggested a significant shift in the Fed's portfolio strategy, targeting the elimination of the Fed's agency MBS holdings and reallocating towards shorter-dated Treasury securities.

• Operation Reverse-Twist Hinted: Waller's strategy implies a potential 'Operation Reverse-Twist,' aiming to lower short-term yields and steepen the yield curve, contrasting with the 2012 'Operation Twist' which sought to flatten the yield curve.

• Market Reaction: Following Waller's remarks, bond yields, especially on the short end, fell, and the yield curve bull-steepened. Gold prices surged, indicating market anticipation of a policy shift.

WHY IT MATTERS:

• Strategic Shift in Fed Policy: Waller's comments signal a strategic pivot in the Fed's balance sheet management, focusing on flexibility and the potential to support future asset purchase programs without expanding the balance sheet.

• Impact on the Yield Curve: The proposed shift is expected to influence the yield curve significantly, potentially steepening it by adjusting the maturity structure of the Fed's Treasury holdings.

• Gold as a Beneficiary: The anticipation of these policy adjustments has bolstered gold prices, reflecting investors' move towards safe-haven assets amid uncertainty over the Fed's next moves.

• Monetary Policy Implications: The suggestion of an 'Operation Reverse-Twist' could impact short-term interest rates and the broader financial market, especially if executed alongside rate hikes, a delicate balance aimed at controlling inflation without stifling economic growth.

• Coordination with Treasury Issuances: The alignment between the Fed's strategy and the Treasury's issuance plans points to a coordinated approach to managing national fiscal and monetary policies, with implications for liquidity and the overall economy.

Zerohedge

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The BRRR is meant for informational purposes only. It is not investment advice. Please consult with your investment, tax, or legal advisor before making any investment decisions.ll