> “This isn’t a systemic event. This is a midsize bank that was badly managed,” he said “It may be a little messy. But that’s different than if you have somebod

> “This isn’t a systemic event. This is a midsize bank that was badly managed,” he said “It may be a little messy. But that’s different than if you have somebody at the core of the financial system stop making payments to somebody else at the core of the system and then the core implodes." This is the dilemma for any nascent panic. Do nothing so as not to alarm markets, and the thing goes down the tubes, potentially dragging many others along with it through a chain reaction. Do something and spook the markets because you need to explain why you're taking the extraordinary action. This was exactly the problem during the opening phases of the GFC. The other problem is the populist outcry of fat cats getting a free ride on the backs of working people. Stories like this one of bonuses paid out just before the implosion don't exactly help the medicine go down: > Silicon Valley Bank employees received their annual bonuses Friday just hours before regulators seized the failing bank, according to people with knowledge of the payments. https://www.cnbc.com/2023/03/11/silicon-valley-bank-employees-received-bonuses-hours-before-takeover.html https://www.cnbc.com/2023/03/11/silicon-valley-bank-employee... This is all happening against a backdrop of futures markets about to open. The last thing any of these officials wants to see is a selloff in stocks. It's hard to see any other outcome but the depositors getting bailed out. Then again, bailout for Lehman seemed obvious, and yet things took a different path. FWIW, yield curves around the world have been screaming "Catastrophe Ahead" for months now. Sophisticated traders know this and it can't be lost on them this this is exactly the kind of setup that would be consistent with massive and prolonged curve inversions.