A high profile bank in some tech circles, a bank with an abnormal balance sheet that actively resisted scrutiny and that did not have high systemic exposure, went bust.<p>Clearly, a banking crisis.<p>Alternatively, the market did what it should do and a shoddy player was exposed.<p>That outsized financial risk undertaken by its depositors, depositors with advisors that had ample means to mitigate putting-all-eggs-into-one-bank-risk, was subsidised out, perhaps should be more in focus as a cause of financial system risk.
Just go look up Asian and mostly BRICS countries are dumping US debts. China has lesser T-Bills than a decade ago. This massive sell off already spooked US Treasuries. Look up Janet traveling intinerary for the last 2 months. Fed is buying up and interest rates is higher than Fed rate at this moment. Many banks are parking their cash there. A doubling of rates will cause billions of immediate lost. Even they refuse to write off, bank run is happening. I have many friends fired from jobs couldnt get a single HR interviews for already 2 months...something unheard of just 6mths ago. These jobsless people will drain their deposit akin to bank run indirectly. Right now foreign countries e.g. China and many Asian and middle east countries are actively liquidating their American assets and repatriate their cash back. We will see at least 2008 if not the GD of the 1920s-30s in coming 12-24mths. The only thing that will stop this is USA go into war with Russia. That will temporary boost economy before total anhinilation. You will be surprise how shortsighted American leaders are trading short term gain for long term demise.
He might well be right, but the market can stay irrational longer. He's been singing Tether's imminent doom for years now and nothing has happened. About the only thing that happened is money fled USDC for USDT recently for a short period.
<i>I seem to have a gift for understatement so to make this explicit: I'd put ~20% chance that we are in the beginning stages of a banking crisis. Banking crises are not the end of the world, but they are substantially worse than the failures of an individual bank</i><p>I'd put it at 5-95%. In other words, who knows. The big one is something like Schwab. It was down at one point 20% today.
Speaking to a banking friend today, this almost seems inevitable at this point. So many banks did not expect interest rates to go up this much, this fast. Many banks are filling gaps right now, but with more money going out than going in (for various reasons), things are going to be tight.
Moved mostly to cash today. The credit suisse CDS movement spooked me.<p>That against RE market wobbling lately, Ukraine situation being a mess...think I'm OK with sitting on the sidelines a bit and losing out on gains