Reply to I don’t know how banks work

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Take your money and give you very very small interest. Let others borrow your money from them and charge high interest and bank keeps that money. If everyone withdraws money at the same time, bank collapses. Exhibit 1 SVB[/quote]

What made everybody decide to withdraw all at the same time in this case?[/quote]

A certain Venture Capitalist said it was a good idea on a freaking group chat with his techbro buddies.  Seriously.[/quote]

Wrong. The idiot chair of the FDIC gave remarks Monday announcing that the Fed’s ramping up of interest rates had left certain banks exposed to substantial unrealized losses (simplified: rising interest rates were causing bank assets to lose value). Then, the shorts and bottom feeders and group chats went nuts and created a panic about SVB, which was the poster child for this type of exposure.

Now, as of a couple hours ago, the Fed has announced it’s going to lend against those deteriorated assets but will value them at par (as if those unrealized losses are not real after all). The only way that makes sense is if the Fed reversed course on rates, at which point the prices of those assets will recover.

If this all sounds circular and stupid, you understand more than you think. [/quote]

So the dregs of the internet started a whisper chain that connected to a douchey techbro venture capitalist who panicked and pulled the trigger?[/quote]

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