Bloomberg/Mohamed A. El Erian/5-1-2023
“What emerged on Monday morning was far from perfect, despite weeks of discussions and posturing. What we have are US government institutions caught up in the policy implications of a ‘second best’ world — that is, the repeated inability to come up with an optimal solution. What’s emerged will come with collateral damage and unintended consequences.”
USAGOLD note: Like Silicon Valley Bank, First Republic collapsed because of an illiquid, underwater portfolio of Treasury paper – an ominous development that signals the potential for more of the same within the wobbly banking system.
