Sunday, March 12, 2023

And Now for a Little Bank Panic - WSJ

There’s nothing like a bank panic to make for a relaxing weekend. Markets took another header on Friday, as regulators closed Silicon Valley Bank (SVB), the 16th largest U.S. bank and the biggest to fail since the 2008 crisis. This came days after Silvergate Capital announced it is liquidating its bank. Cracks in the financial system emerge whenever interest rates rise quickly after an easy-credit mania, and the surprise is that it took so long.


The Federal Deposit Insurance Corporation took over SVB on Friday and may have to collect more bodies by the time the Federal Reserve is done correcting its easy-money mistakes. At least that seems to be the fear of investors, judging by the sharp selloff in regional bank stocks like First Republic Bank (-14.8%) and PacWest Bancorp (-37.9%).


Oh hell. Is it time to convert my money market funds into junk silver? Stock up on rice and beans? Search for a remote Utah ranch for sale? Restore depleted ammo stocks? Nahhhh. Just worry about those things. That's the ticket. Especially when the alternative is doing real work.

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Investment Watch: chez dearieme is now slightly invested in works of art. Even if they don't appreciate in value we can appreciate their beauty.

On second thoughts: because they are things of beauty they probably won't appreciate in value.

Posted by: dearieme | Mar 12, 2023 10:15:10 AM

This entertaining chappy tells me that all the depositors will be bailed out at the expense of, in the short term, other banks ... but, eventually, no doubt, by you.

Posted by: dearieme | Mar 12, 2023 5:22:36 PM

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