People May Rethink Their Ties to Smaller Banks


I still think there is some danger as we go into this week that a lot of people are going to rethink anything they may have in a regional smaller bank that's not subject to the same kind of scrutiny as the big guys. So any small business or medium sized business that's banking with one of these regionals may say, wait a second. I don't want to go through this headache. Let me just pull my money out and put it into chase or Bank of America or Wells Fargo or one of the big guys. And I'll be more secure. We've kind of had this two tiered banking system, if you think about it, right? In a way, with the big guys being subject to all these liquidity restrictions, et cetera, all these stress tests ever since 2008, and then the regulation changing for the little ones in hopes that they had a chance to one day become one of the big ones, and yet now I think a lot of that is going to get rethought. Because of what we just saw and what we're about to see. Anyway, it's all kind of frustrating because you look at it and you say, the reason the reason this bank was in some of the trouble it was in was because the tech sector went wild. And why did the tech sector go wild and then have that bust? Because the Federal Reserve printed too much money. Joe Biden and the Democrats gave out too much money. There has been so much money in the system so much inflation that it created an environment that was ripe for these kinds of crises. I said this all along and you know, sometimes you just don't even know you can't anticipate what it's going to be. We've been thinking maybe a systemic crisis of some sort. Maybe they were making bad loans. In this case, they weren't even making bad loans. They were just treasuries. I mean, they were bad loans in the sense that they were treasuries that were trading at a lower level because they were only paying about one and a half percent interest rate and now on a two year you can get nearly 5%. So that was too bad for them and they didn't properly allocate for the risk period that they were entering. Nor did they probably even understand the inflationary period that we were going into. They're not listening to this podcast. And they were drinking the Kool-Aid with Janet Yellen and Joe Biden and Jerome Powell trying to say, oh, it's all just transitory. Don't worry, don't worry. Well, they didn't worry, and then they got caught in this really bad situation.

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