The collapse of a Silicon Valley bank has exacerbated the economic slowdown, although the government has taken action to mitigate the impact, according to Danny Moses, a “big short” investor. “You can’t assume regulators know what they’re actually dealing with now, considering they’re completely caught off guard … what just happened to Silicon Valley Bank,” the founder of Moses Ventures told CNBC’s “Fast Money” Tuesday. People get nervous. ” Moses, who is known for successfully shorting the housing market before its 2008 crash, speculates that the failures are just beginning. “The credit dynamics have been there since the Fed started raising rates. We’re only just now feeling the effects of the lag,” Moses said. “Ninety-nine percent of people didn’t see this coming. So, is everything clear now? I do not think so. However, the broader market closed higher on Tuesday. Moses described the move as a knee-jerk reaction to the idea that the Fed would pause rate hikes early. He said that strength would not last as the cost of capital was rising. Furthermore, he warned that business Real estate and auto loans remain ominous problems on bank balance sheets. “If you believe this is [the economy] “The slowdown is only going to accelerate the slowdown because the banks have to really scale back their activities,” said Moses, who expects the first-quarter earnings season, which starts next month, to bring clarity to Wall Street. “The Fed is deluding itself if it thinks this is going to go away,” Moses said. [SVB] It’s a little vase sitting on a window,” he added. This week, Moody’s Investors Service downgraded the U.S. banking system to negative from stable. The move comes as regulators and the Treasury Department step in to ease tensions with SVB’s collapse. The related solvency jitters followed and Signature Bank. “We’re still underestimating what’s going on across the market when it comes to rate hikes,” Moses said, referring to the central bank’s 450 basis point increase in interest rates from March 2022. move. “We’ll see what the Fed does next week. “The Federal Open Market Committee will hold a two-day meeting on interest rate policy next Tuesday and Wednesday. Disclaimer