CNBC headline this morning: "First Republic drops 70%, leads decline in bank stocks despite government’s backstop of SVB."
Well, no: Bank stops are dropping because Silicon Valley Bank is getting a bailout, because the bailout has already spread to a second bank (Signature Bank), and because investors are likely assuming (and likely wisely so) two things:
- More banks are going to be lining up for bailouts; and
- At least some of those banks will go under before they can get on, or just won't even be offered a nipple on, the bailout udder.
Oddly, I had (and indulged) a sudden urge to re-watch The Big Short last week. Good movie. I guess we can expect a reboot soon.
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