Have we avoided a banking crisis? (23Apr2023)
Personally, I think that the banking crisis is yet to be over and there are also concerning signs in the market about the macro conditions & US economy. One of the signs of concern is the increasing debts. Household debt record, more repossession of vehicles, more credit card debt. Unfortunately, I do not think that the banking crisis is over and we should expect collateral damages coming soon. The earnings of the non-Big 4 banks (Citi, JPM, BoA & WFC) should attract more deposits at the expense of the smaller/regional banks. As per the screenshot above, the smaller/regional banks play an important role in the Commercial Real Estate (CRE) ecosystem. Should they go under, CRE is likely to be affected. Eventually, the market may be left with the Big 4 banks. SVB Banks like SVB have been serving the startup sector for 40 years, surviving a few market crashes along the way. This has given them experience in the startup sector, allowing them to offer more attractive financing suppor...