Subject: Re: RationalWalk
Apologies in advance. Just chasten me privately, and if I keep it up, toss me out on my ear. But nobody should ever feel obliged to leave because I have been a jerk to them!

I most certainly was not 'a jerk' to anybody. I responded to the comment that the system 'was working as it should.' That is nonsense, even with the extra machinations RW noted the FDIC was pursuing, and the reason is simple: TRUST. It doesn't take much to start a bank panic (as we saw a couple days ago) and as we saw dozens of times in the 19th and early 20th centuries. Panics now move with lightning speed thanks to electronic communications and the tentacles of today's wider financial system and the easy touch of the keyboard.

In spite of the extensive media coverage over the weekend (headlines on every newscast, top of the page in the financial press, and elsewhere) I suggest a fraction of a fraction of 1% would know of the behind the scenes machinations, and even if they did would still have been poised with their finger on the 'move money' trigger at 9:00 Monday morning. That is a panic and once started panics are desperately hard to contain. People get trampled heading for the exits at the mention of fire, even if there's no fire. It's PANIC!

I will go further. The idea that VC's would be able to 'bail out' these companies is fantasy. We are talking $200 billion in 'unavailable funds' (the notional assets of SVB), for who knows how long? Weeks? Months? 2024? Mark Cuban was going to take payroll from his wallet? Great. Where was the other $199,000,000,000 going to come from to pay suppliers, landlords, utilities, employees of hundreds of companies? (There was another $100,000,000,000 or two at at Signature Bank, which went upside down Friday night thanks to ' wait for it ' panic.)

OK, not solely panic, some of it was stupidity surely. Again, how would most depositors know, except by wading in the weeds in a field of accounting and annual reports they know little about? No, I don't care that some VC companies would have died. I care that the spreading financial epidemic would have killed or maimed many unrelated mainline companies and employees.

Now, lest someone accuse me of wanting to bail everyone out always I will repeat: this is terrible. It increases moral hazard immeasurably. Sloppy CFOs and risk officers should be fired. The crypto bro libertarians-turned-socialists at the drop of a bank should be tarred and feathered and perhaps flogged in the public square. That said, innocent bystanders and even not-so-innocent bystanders should be chastised and I would hope chastened, and certainly the general public should not suffer for the actions of a few greedy souls reaching for yield at a bank they never heard of. We saw similar happen in 2008, didn't we? And we saw the decades-long results in the 1930's without quick intervention didn't we? Have we learned nothing? Cripes, JP Morgan knew it in the panic of 1908, a century ago.

Finally, I'll conclude by saying I think this is a message board. I expect people to disagree with me, sometimes strongly. I certainly do not think my post was rude in any way, and while I am sorry to have somehow inexplicably offended someone, I am really not sorry for speaking my mind. I thought that's what a message board such as this was for. Correct me if I'm wrong.