The ill-fated Silicon Valley, Signature banks, and today’s latest headache, First Republic, are the festering sores that signal an even greater degree of banking rot.
, those already in place are squeezing asset values and bank balance sheets leaving the most vulnerable – that 25 in number according to the people I speak to – facing a decent chance of collapse.
Top CEOs are working to stop it. The market bounced back Monday after the merger-bailout of Credit Suisse, but shares of First Republic continued to slide sharply. As I was first to report, on these pages and for Fox Business, First Republic, with JPM as its banker, is shopping itself before it too collapses. and slowdown the contagion. He believes the banking tumult is that signal that his famous the economic “storm” prediction unfortunately is now coming our way.
But the history of financial contagions shows such one-offs never work. Dimon’s bank and others last weekto stabilize it, and its shares continued to tank. Before the fateful Lehman Moment back in ’08, there were capital infusions of bond insurers; Bear Stearns’ forced merger with Dimon’s JPM; mortgage giants Fannie Mae and Freddie Mac being placed into government conservatorship, and I’m sure I missed a few.
What is needed is leadership from Washington, and a recognition we have a problem that requires a broader solution. This, unfortunately, is stuff that Yellen and Sleepy Joe can’t seem to comprehend.
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