Another One (or more) Bites the Dust

There is no turning back to the digital age as a number of banks started to experience runs on their deposits fueled by. The digital age itself. In an awkward reminiscence to the Bear Stern and Lehman failures, markets went into the weekend with more questions than answers. However, given our access to information these days, social media went crazy on the restrictions and speculation on certain institutions. This made many customer log in and start to move their money which is now increasingly accessible despite market and/or bank hours.

The question is if this is wrong? Most still remember the financial crisis and the long term implications of the failures at the moment which start a tidal wave of indirect failures. Despite the quick action of the government and regulators, I feel that more is yet to come given how much derivatives are traded around the financial system these days. Remember that the financial crisis was deepened not by the Bears or Lehman failure but the counterpart risk from derivatives of their failures.

Do you remember Credit Default Swaps? There must be losses about to cascade down due to these of the banks impacted and those on the verge of more runs. The government has backstopped deposit (a good move in my opinion) to avoid another Lehman moment; however, they have already said that no investors will be made whole and the billions of dollars lost will surely have more impacts in the coming weeks. I think this is far from over.

History continues to prove that these shocks are becoming more frequent. I wonder if change will finally come for the imperfections of our financial system. Unfortunately, some of the rhetoric heard is seemingly going the other way as more centralization and restrictions around our money/currency is being spoken about. Can you imagine being restricted of moving your money via the internet now after the innovation of the past 20 years? Yet another reason to be bullish on Crypto long term (pain short term as it rebuilds).