As I watch this slow motion train wreck happen in real time it occurs to me that most people watching television actually think this is just the Fed making a big policy error. It is NOT! The Federal reserve has intentionally raised rates to 5% in order to destroy small banks in favor of large ones. I can only speculate as to the reasons why they are doing this but the evidence is clear: The Federal reserve knows exactly what it's doing and what the results will be. Here is proof:
"It’s an issue that Jerome Powell warned about in 2012, years before he became Fed Chairman; the consequences of creating a stimulus dependent system and then abruptly cutting off the life support. As soon as he was installed as the head of the central bank he implemented the very policies he predicted would cause a crash.
The result? We just saw the beginning of the end with the latest banking crisis involving companies like SVB, First Republic and Credit Suisse – It’s not just US finances, but banks around the world that rely on liquidity injections from the Fed to stay afloat. The central bankers addicted the system to cheap easy debt and now they are taking away the drugs."
So, please spare me the "who could have seen this coming" BS - I don't buy it
"In other words, no one can honestly argue that the central banks are ignorant or unaware of the threat. They KNOW what’s about to happen and they do not care. But why does the establishment want a crisis now instead of five years ago, or five years in the future?"
The size of this problem is tremendous, just the three banks who have failed so far have a combined value larger than all the banks that failed during to 2008-2009 banking crisis. Let that sink in for second; just three banks are down and we're already over the bar from last time. How many more banks to go?
In an interview with The Guardian, Seru was more precise about just how many banks were burning through their capital buffers and were underwater. The estimate is shocking: Almost half of America's 4,800 banks.
I noticed that all the banks who are suffering runs are publicly traded on the stock market. This is an interesting point because stock prices can be used to cause panic since they are easily manipulated by the wise-guys on Wall Street. I used to be a stockbroker for many years and I'm very familiar with something called a "bear raid" which is when shares of a lightly traded stock are sold "short" (selling shares you don't actually own hoping to replace them cheaper when the stock crashes).
I believe this strategy is being used against the regional banks right now. The tactic as I see it works like this: Shares of XYZ regional bank are sold off in a panic after a "rumor" appears somewhere in the financial news. There are actually "journalists" who specialize in these attacks as they work in concert with their Wall Street handlers. The rumor spreads that XYZ bank is experiencing an run even though it may not be. Depositors who view the sinking share price on MSNBC assume the worst even if they don't own shares of stock in the bank. An actual bank run materializes as depositors move their money at light speed using cash transfer apps.
This strategy only works on regional banks that have their shares traded on the stock market. A bank's share price is an overt, outwardly visible sign post that can be manipulated outside of the bank's control. That is, if someone at a large financial firm gets the idea that they can profit by destroying a publicly traded regional bank using unscrupulous methods like naked shorting the stock until it's toast, they will do it every single time.
My advice is to use regional banks and credit unions that do not have publicly traded shares. I use Bank of Tampa, they are a conservatively run, family owned bank and the only Florida bank listed in America's top 50 banks.
The banking crisis has directly affected small business owners and their ability to access affordable working capital. Banks are scared shitless but they're not telling their commercial clients because that would be a stupid thing to do. They are simply stringing along all loan requests hoping things get better in time. They won't, they're going to get worse as more and more banks either tighten up completely or shut down.
Private lenders are still providing capital in 48 hours. As long as some banks are operating, we will be able to lend money. The conditions are tight and many lenders are nervous about the risks at small businesses right now; the conventional banking issues are driving many owners to our industry some with very good credit profiles. This has increased the competition for good offers which are going primarily to higher fico score requests.