Hello everyone.
I think some people interpret this whole situation a little bit wrong so I wanted to share my opinion on this topic.
I think the banking contagion is now over. The government and federal reserves backstopping the banks with the protection of assets above 250k. So we won't see more bank runs because people know that their money is protected now so banks are safe.
Some people and media also say that the system broke and that means that federal reserves won't rise interest rates at the next meeting. And I think it's completely wrong. I think they will just rise rates for another 0.25% as a response to the SVB situation. The inflation is still pretty high and FED will keep fighting it, they can't afford to stop right now.
So I think we will still see a lot more bankruptcies, there will be more layoffs and the stock market will keep suffering from that. This also means that bitcoin will probably find a new bottom.
SVB may have had an effect in the way people looked at banks these past few months but I don't think they directly affected the banking situation, cause you have to remember that SVB is a business bank, which means it handles balances and capitals of businesses which are probably worth tens of millions if not more. The regular consumer bank couldn't hope to amount to that value so I don't think bank runs will translate to consumer banks cause who the fuck is going to worry about them not being able to withdraw their 10 bucks on chase or AMEX?
Kiddings aside bank runs on business banks are still on the table and the 250k bailout that the government would give them wouldn't amount to the losses they incur in the process. Let it sink in.
