And after a global bank failure, what next?

Tuesday, March 14, 2023. Please understand this.

The mechanism is technical, but that doesn't change the reality that the Federal Reserve gave the banks a tremendous gift without public oversight or warning. 

It's even worse than you think.

 The Fed knows it has to keep interest rates high to break inflation (which means it hurts the economy), but now it protects the banks from those high-interest rates. It's not funny.

This action is a clean Main Street to save Wall Street traffic. [Alex Berenson] 

Bank stock crash continues despite emergency measures. 

Shares in regional banks posted their most profound decline in three years, reflecting intense investor concern about the sector's health after the collapse of SVB and two other banks last week. KBW Nasdaq Commercial Banks Index Drops More Than 10% [The Wall Street Journal]. 

DON'T PANIC - SAYS JOE BIDEN

CAUGHT on tape discussing how to use the media to prevent a bank run today, 03/13/2023, amidst a total collapse of the world economy.

Signature Bank, First Republic Bank, #bankcrash #bankrun #BankRuns #totalcollapse #economy pic.twitter.com/yN5bYXvYUy

— O'Keefe Reborn (@okeefe_reborn) March 13, 2023 

Shares of First Republic Bank plunged dramatically in early trading, leading losses among regional banks, despite efforts by U.S. regulators to calm investors after the collapse of the Silicon Valley bank, writes Caitlin McCabe at The Wall Street Journal.

(As we go, we are heading full speed ahead for an exciting U.S. bankruptcy next June when the increase in the U.S. debt limit, currently at $31.5 trillion, will be discussed. 

The last year the U.S. paid off its debt was 1835!

Shares of First Republic recently fell 63% in premarket trading after falling more than 70% earlier. The bank said on Sunday, March 12, 2023; it had salvaged its finances with additional Federal Reserve and JPMorgan Chase funding.

Other U.S. financial institutions, both large and small, were hit hard in Monday's premarket session. Among the other notable moves:

Western Alliance Bancorp Shares Drop 68%

PacWest Bancorp shares fall 44%

Comerica shares fall 23%

Zion Bancorporation shares fall 27%

Fifth Third Bancorp Shares Drop 10%

Shares of Charles Schwab lost 11%

Bank of America shares fell 4.2%

Wells Fargo shares fell 3.1%

The premarket moves extend a volatile stretch of trading for First Republic, which has fallen 29% in the last two sessions of the past week.

After the quick collapse of Silicon Valley Bank and the recent closings of Signature Bank and Silvergate Capital, investors have been dumping bank stocks that may have similar profiles.

First Republic's customers are businesses and wealthy individuals on the coasts, many of whom were no longer content to leave their money in low-yielding accounts when there were other high-interest alternatives. SVB, Signature, and Silvergate have struggled, in part, because of their concentrated customer bases. 

"We have to think of ways to prevent a bank run" Joe Biden.

Don't panic.pic.twitter.com/gZjqGohw7F

— WOLSNED 🇬🇧 (@wolsned) March 13, 2023 

In a joint statement, First Republic's executive chairman and CEO said that "it's capital and liquidity positions are extreme" and that "its capital remains well above the regulatory threshold for well-capitalized banks."

2023 is certainly not 2008, but is that the most worrying thing?

What comes next?