Thus far in this 3-year fiasco of mismanagement and corruption, we’ve avoided a financial crisis. That’s for specific reasons. We just had not traveled there in the trajectory of the inevitable. Are we there yet? Maybe. In any case, the speed of change is accelerating. All we await is to observe the extent of the contagion.
The failure of the Silicon Valley Bank (SVB), $212 billion in assets until only recently, is a huge mess and a possible foreshadowing. Its fixed-rate bond holdings declined rapidly in market valuation due to changed market conditions. Its portfolio crashed further due to a depositor run. And it all happened in less than a few days.
Could the Fed have anticipated this? Probably. But what choice did it have? Again, this entire mess traces first to lockdowns and second to Ben Bernanke’s preposterous policies as Fed Chair in 2008. He imagined that he would fix a financial crisis by abolishing a natural force like interest rates on bonds. Then he pulled a fancy trick of keeping his “quantitative easing” off the streets by having the Fed pay more for deposits than the same money could earn in markets.
black monday 13 on the way?
yes these ppl are big on numerology
bobdole9 1 points 2.3 years ago
Black Monday II should be fun tomorrow!