Reply to SVB Bank Run: Fed Calling Emergency Meeting

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]How does one mismanaged bank cause confidence in the entire banking system to collapse?[/quote]

Because it's the psychology of being a small business owner seeing the headlines that[b] you could instantly lose all money for your business over $250k in bank. [/b] You could wake up the next day and have $0 to pay your employees, buy supplies, and pay your rent. It only takes one domino to fall to start the panic. Then another bank fails, and then another.  Soon we have a full on nation wide bank run that sends us back to 40% unemployment like the Great Depression.  Does fear and greed ever make rational sense?  It doesn't have to, but it can happen when people start to panic.[/quote]

Did the small business owners think that FDIC insurance was just pretend?

Why should these people get a bail out over any other group of people who have last money for some other reason.

It's amazing to me that some of the most vocal people i have seen out there loudly demanding handouts are people who I have also seen being completely hostile towards other forms of government assistance.  I guess it's different when the money goes to them. [/quote]

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