Schwab is next!
What I am about to tell you is easy to understand, but difficult to process. Silicon Valley Bank went under in less than 2 days, yet the problem was sadly staring anyone doing “the work” in the face for past 3-6 months. Unfortunately, I was not one of them. You can only juggle so many chainsaws at once! The Fed, inflation, the economy and market valuations has been enough to make anyone’s head spin. Let me start with my conclusion which is dour: $SCHW is no different than $SIVB. It will be a $0 stock with no equity value vs Friday’s close at $108 billion in equity value if the Fed does not act quickly. Schwab is not alone, unfortunately, and the Fed needs a bazooka quickly to avoid a meltdown. Here is why.
But first, those who are “free subs” not supporting our substack and who are too cheap to pay $6, you really are being penny wise and pound foolish IMHO. I love the markets, love writing and am sharing everything I know and have learned in a 30-year career. Enough said, you decide. Here goes: