Following the downfall of Credit Suisse, markets seem to be fearing a contagion among European banks. Deutsche Bank seems to be the poster boy for this new wave of contagion and I think news in the coming week will be all about whether the ECB manages to contain this wave of negative sentiment or whether we’ll see another wave in this banking crisis.
Early in the year, I was in the camp that the hike in interest rates could cause instability in some markets but I never thought that it would be in the banking sector given how much more capitalised banks are following the GFC. I honestly thought it would be in commercial real estate (especially the office segment) because of how work-from-home has become a fixture of post-covid life. If the banking sector is already reeling from this recent turmoil and the commercial real estate sector takes a hit, things could get ugly.
Having said all this, the next few years could be one of the rare times where DCA-ing into the market will outperform lump-sum investing. If you’re a young investor getting started today, you couldn’t pick a better time.
‘Gerbil banking’ preceded the Great Depression. We’re seeing it again today
(Fortune)
Was this the genesis of the Post Office offering banking services? I’ve always wondered why Japan’s Postal service had such a huge banking arm and why we have Post Office Savings Bank (POSB) in Singapore. Maybe this origin story in the US explains it.
Strategic thinking matters
(Klement on Investing)
The game described in the article is one that I’ve read about before. In fact, they used the very same setup in one of the games in season 2 of Alice in Borderland on Netflix. Maybe it’s a good filter when hiring traders.
Why your financial conditions index sucks
(FT.com)
The money shot from the post is:
In any case, because a financial conditions index has no natural unit, it can’t really be compared over long periods – as Catherine Mann points out, there’s no absolute answer to whether conditions are “loose” or “tight”, just a sense that if the line is going up they’re getting tighter and if they’re going down they’re getting looser. This means that the FCI, however cleverly constructed, isn’t giving more information than you could get by looking at a chart of share prices (with maybe a fleeting glance at a chart of bond spreads).
Aha, maybe it’s time to throw some of these things away.
Where People Find Meaning in Life: revised in 4 slides
(r/dataisbeautiful)
Someone posted a visualisation of a survey on areas in life that people in different countries find meanginful. I found this interesting for a few reasons:
- Family, Children, and Community relations rank near the top across all nationalities. This seems to echo the finding from The Good Life which is a book based on a long-running study of what matters in life to people.
- The results for Singapore (see 2nd picture in the link) are arguably quite different from every other country in the survey in that even in the top-ranked category “Family and Children”, only 29% of those surveyed answered positively on whether they found meaning in life from this category.
In short, maybe whatever studies you read about that survey predominantly White Anglo-Saxon People (WASPs) don’t really apply to this part of the world after all.
Ryan Goh: Life through these eyes 