This is the biggest and only story in town right now. Here's my take:SVB was the bank of choice for Silicon Valley's hot start-ups. As the technology bull market turned bubble, SVB grew its deposits and assets at a rapid pace up until 2021. All these deposits had to go somewhere. And somewhere was 10-year US Treasuries yielding about 1.50% pa. Since then, we all know what happened with interest rates - up. Up a lot. Since then, the IPO market has dried up. The M&A market has dried up. Most of these companies, as we know, we're making a lot of money, some if any. These companies were then burning through the deposits at SVB - business operations, payroll, and so on.

Most headlines I read nowadays are about how much the average loan repayment has increased by and will increase by for Australians. You don't hear or see too much of this headline for the US. Have you ever wondered why? The US mortgage system is a little different to ours. One of those differences is that most borrowers take out a fixed rate mortgage, typically for 30 years. Whereas in Australia, most loans are taken out on a variable basis.

I'd like to think I'm a contrarian. I guess most investors do. Does that not make me contrarian? I have no idea. I'm human I guess. I'd like to think I'm different to everyone else, but so too does everyone else. I think we're all so much more similar than we think. Anyway, I don't want to get too philosophical here, let's get into markets.

This is my first official post for 2023. A little slower off the mark than I had expected, so here we are. And here's whats on my mind.

I'm writing this note as we edge closer towards the holiday season. And of course, as we are every year, we're shocked as to how quickly the year has flown by. I find this interesting in our species. The calendar doesn't change each year. December comes around at the same time, every year, as sure as the sun rises each morning. Yet, we are shocked.

Last week I wrote a piece on inflation, US mid-terms and stocks. I outlined the fall of inflation since its peak of June 2022. We also looked at how quickly inflation has risen since 2021, and the expectations for it based on historical events.