Something for your Espresso: The FDIC remains worried, while China is bouncing..
Good morning from Europe
The FDIC hosted its quarterly banking profile webcast yesterday and they continue to sound worried about the health of the US banking system. Around 2.5% of total deposits left the US system in Q1 and the FDIC hinted that Q2 numbers could prove to be even worse. The list of “problem banks” now contain 43 banks – up from 4 in the Q4-2022 report.
This banking crisis is probably not over, and we are looking for smart ways to express a bearish view on financials relative to other cyclical equity categories in coming days.
Chart 1: Credit demand points to a severe credit contraction in H2-2023