Fed can't manage a banking crisis and fight inflation: Jim Grant of Grant's Interest Rate Observer

Jim Grant, founder and editor of Grant's Interest Rate Observer, joins 'Power Lunch' to discuss shorting Silicon Valley Bank, the trend cycles associated with interest rates and the Fed's ability to manage the banking crisis while flighting inflation.

[ardeand]

Silicon Valley Bank (SVB) was the 16th largest bank in the US, and it wasn't subject to the most strict controls. How many banks actually are subject to those controls, besides the big four? Any bank could suffer a run and fail, and if that happens to a community level or even state level bank it probably won't upset the national economy or ecosystem of banks, but any multi-state bank should be more closely watched.

[AddilynTuffin]

It was a very bad decision to remove the Glass-Steagall Act in the late 1990s, which led to the spectacular failure of huge banks during the financial crisis of 2007–2008. To prevent another disaster, Dodd-Frank and this statute both need to be reestablished right away. What happened with SVB is only the beginning of what will happen if nothing is done to address the current situation.

[floxydorathy]

I blame the FEDs for this, because in the end they benefit by either buying off the failed banks cheaper or something. The fed can print credit as long as someone will borrow it into existence, but they cannot print product (or production).

[kylesmith]

Jim Grant was awesome. I love good, intelligent commentators.

[angeladeem]

The failure of Silicon Valley Bank has torn into global markets, with investors ripping up their forecasts for further rises in interest rates and dumping bank stocks around the world. I'm at a crossroads deciding if to liquidate my dipping 200k stocck portfolio, what’s the best way to take advantage of this bear market?

[americanskeptic]

The big money doesn't take a loss. The middle class will suffer and the poor will have some more company soon

[Burnardcheasesaw]

They haven't repaired the bank system since 2008.

[jjbdbd]

Fed hiking no matter what inflation is way more important than a bank bailout because majority of Americans are

[stevengoldstein]

Rates must go higher, if that kills some unrealistic prospects and profits, that is a good thing, because the self destruction of scam investment and fake value is too dangerous for all of the economy. I propose that it is time to get used to it

[DigitalYojimbo]

Banks are fine, FUD and people doing run on banks are the issue. Wasn't too long ago a holes were running out to buy car loads of toilet paper, dont be that a hole.

[I]

Christine Lagarde did a good job
delineating the Central Bankers
role w.r.t. the whiny Bankers
self(ish)-'Interest, ' today. ... :-))

[virgilpalmer]

The economy is being wrecked, and they're laughing...
Banks are trying to get loans as fast as possible to stay afloat..
American Working class didn't deserve this .
But, These people deserve to be bankrupt...

[leonardmayer]

There is a contradiction here. The FED fights inflation by raising interest rates. Higher interest rates cause more banks like SVB to fail. The FED and Yellen bail out the failed banks which increases inflation. The result is a never ending spiral.

[makedredd]

The taxpayers won’t be able to bailout the banks this time. Since the 2008 financial collapse has already put the taxpayers in humongous debt.

This time the 1% who owns 90% of the world’s resources will have to step in and bailout the banks.

[rp]

Fed is driving a car with a foot on the gas pedal and one on the brake.😂

[brennhannon]

It was only a matter of time before interest rates went up! How did the Fed and banks not see this coming?

[lakeguy]

rates didn't "just fall", the Fed and the Treasury worked to suppress interest rates below the market rate. When the government puts it's thumb on the scale of any market, bad outcomes will follow. Doing so in the credit markets even more so.

The Fed's solutions to today's problems will be the basis for tomorrow's crisis, ad infinitum.

[trazzpalmer]

With all this scary news making the headlines, is this really a good time to buy stocks? I know everyone says the market is ripe enough for buying but will stocks tank further this year? How long until a full stock recovery?

[robertgreen]

Didn't have this problem when Trump was President. Everything was going good real good, now its horrible

[ceejaydeesoozaa]

CNBC SHLD GET THIS GUY ON MORE OFTEN. THEY MUST