“The orderly resolution of First Republic by the nation’s biggest lender was supposed to quell concerns about the state of the American banking system, not reignite them. The steep declines — PacWest shares tumbled 28% to a record low Tuesday, while Western Alliance lost 15% — amid a lack of new news had banking experts casting about for why this was happening.”
USAGOLD note: A lot of red dominoes out there. We would characterize the problem in the banking system as more like a computer virus than a contagion (domino effect). The same problem present in the banks that have already failed infects at varying degrees any number of banks – an underwater, illiquid bond portfolio that cannot be tapped to meet customer deposit withdrawals without significant losses.…… “People are searching for answers, and no one has a good one,” says KBW’s Christopher McGratty.
