You provide no clear, principled , systematic difference between capitalism and statism. Nor how Fed counterfeiting of money and credit, which indirectly controls all banks and funds unsustainable investments, is a continuously potential problem.
Good analysis of the "non-sticky" deposit base, which certainly seems to be the key to understanding the rapidity of this bank run. Mobile banking now permits "instant" deposit flight, which seems to be a new thing in banking.
I do take issue with one statement: "SVB had a business model of collecting low-cost, high-touch deposits from start-up companies and the venture capital community and investing these deposits in low-risk securities." This is not what actually happens in commercial banks like SVB. Banks do not invest customer deposits, nor do they invest cash reserves. Instead, when banks lend, they create brand new money in the form of new deposits, leaving their existing reserves and deposits intact. The distinction is important because describing banks as mere financial intermediaries obscures their role as the economy's money creators. Understanding money creation allows you to understand many other economic issues, including how government abuses money creation to cause asset bubbles, consumer price inflation, malinvestment, unjust wealth distribution, and excessive government spending. Thanks for the article!
The fact that the financial system is riddled with arbitrary regulations and that manipulation is chronic, it would be nice to know if the controllers are at the end of their rope. It seems the quagmire is not predictable, even for those with expertise about how fragile banks have become. As you say, dropping the pretence that there is control at the top would go a long way toward having investors look more closely into the place they store their money.
You provide no clear, principled , systematic difference between capitalism and statism. Nor how Fed counterfeiting of money and credit, which indirectly controls all banks and funds unsustainable investments, is a continuously potential problem.
Good analysis of the "non-sticky" deposit base, which certainly seems to be the key to understanding the rapidity of this bank run. Mobile banking now permits "instant" deposit flight, which seems to be a new thing in banking.
I do take issue with one statement: "SVB had a business model of collecting low-cost, high-touch deposits from start-up companies and the venture capital community and investing these deposits in low-risk securities." This is not what actually happens in commercial banks like SVB. Banks do not invest customer deposits, nor do they invest cash reserves. Instead, when banks lend, they create brand new money in the form of new deposits, leaving their existing reserves and deposits intact. The distinction is important because describing banks as mere financial intermediaries obscures their role as the economy's money creators. Understanding money creation allows you to understand many other economic issues, including how government abuses money creation to cause asset bubbles, consumer price inflation, malinvestment, unjust wealth distribution, and excessive government spending. Thanks for the article!
The fact that the financial system is riddled with arbitrary regulations and that manipulation is chronic, it would be nice to know if the controllers are at the end of their rope. It seems the quagmire is not predictable, even for those with expertise about how fragile banks have become. As you say, dropping the pretence that there is control at the top would go a long way toward having investors look more closely into the place they store their money.