It’s February 24th 2023, and it’s time for the Daily (Yearly?) update! And it looks like it’s Deja Vu All Over Again–AGAIN!
Only this time, we’re channeling 2007 and the ‘banking crisis’. Silicon Valley Bank’s wobbling, bleeding $1.8 billion in bond losses, and the Fed’s 4.5% rate-hike roulette is shaking things up. Why are we talking bailout? Didn’t we learn from the Great Recession that followed the 2008 banking collapse?
Capitalism is capitalism—that means high risk / high reward. SVB took big bets on bonds and tech dreams. Bailout? Thiat smells like Cronycapitalism. And it stinks to high heaven. The FDIC should protect the little guys, and even the big guys, but only up to the FDIC limit–equal protection and all.
Risk? Meet reward! In this case, that means facing the consequences of not having proper risk officers steering the ship. Federal regulators, hooked on near-zero rates for years, helped fuel this mess. My take? If SVB tanks, let it crash. The market will fill any vacuum created, and acts faster than a government check without the hangover. No 2007 rerun, please—spare us the bailout sequel.
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