Deposit Flight Sending ‘Bodies Floating to the Surface’
For more information on subscribing to The Call @ Hedgeye: https://info.hedgeye.com/l/764243/2021-09-13/jj9wh8 For more FREE investing videos: https://info.hedgeye.com/l/764243/2021-08-11/h1lpc3 Get access to Hedgeye’s FREE Market Brief newsletter: https://hedgeye.com/marketbrief Sign up for Hedgeye University FOR FREE: https://accounts.hedgeye.com/thinkific_sso_login A new Gallup poll shows nearly half of Americans worry about the safety of their money in banks. That concern is increasingly being expressed in the form of deposit flight. “Previous captive depositors who had their money effectively stolen over the years through financial repression started saying, ‘Why do I have my money in savings or checking accounts? I’m going to park it in money markets, iSavings bonds or Treasuries, and that catalyzes big deposit flight,” explains Hedgeye analyst Drago Malesevic in this clip from The Call @ Hedgeye. “This is what we mean when we talk about enlargement of uncertainty and downside skew of volatility in #Quad4. Nobody knows where exactly or when, but the bodies do eventually float to the surface.” Jamie Dimon, CEO of JP Morgan, insists the crisis is resolved. But unlike the handful of institutions deemed “too big to fail,” there’s no guarantee the government or customers will support regional banks in the event of a recession. “That 50% number (in the Gallup poll) is behaviorally how we thought it through,” adds Keith McCullough. “Multiple weeks after the ‘all clear’ signal because Jamie took under First Republic, there was always going to be this behavioral reality that people don’t trust the system.”
For more information on subscribing to The Call @ Hedgeye: https://info.hedgeye.com/l/764243/2021-09-13/jj9wh8 For more FREE investing videos: https://info.hedgeye.com/l/764243/2021-08-11/h1lpc3 Get access to Hedgeye’s FREE Market Brief newsletter: https://hedgeye.com/marketbrief Sign up for Hedgeye University FOR FREE: https://accounts.hedgeye.com/thinkific_sso_login A new Gallup poll shows nearly half of Americans worry about the safety of their money in banks. That concern is increasingly being expressed in the form of deposit flight. “Previous captive depositors who had their money effectively stolen over the years through financial repression started saying, ‘Why do I have my money in savings or checking accounts? I’m going to park it in money markets, iSavings bonds or Treasuries, and that catalyzes big deposit flight,” explains Hedgeye analyst Drago Malesevic in this clip from The Call @ Hedgeye. “This is what we mean when we talk about enlargement of uncertainty and downside skew of volatility in #Quad4. Nobody knows where exactly or when, but the bodies do eventually float to the surface.” Jamie Dimon, CEO of JP Morgan, insists the crisis is resolved. But unlike the handful of institutions deemed “too big to fail,” there’s no guarantee the government or customers will support regional banks in the event of a recession. “That 50% number (in the Gallup poll) is behaviorally how we thought it through,” adds Keith McCullough. “Multiple weeks after the ‘all clear’ signal because Jamie took under First Republic, there was always going to be this behavioral reality that people don’t trust the system.”
