The specter of Lehman returns

Failure of SVB is bound to produce systemic effects

WHAT HAPPENS
One of the first important consequences of the bankruptcy of the SVB was the partial capitulation of the stable-coin USDC, one of the largest digital currencies born to be pegged 1:1 with the dollar, and which for the first time last Saturday 3/11 dropped parity due to losses incurred on deposits at Silicon Valley Bank (see chart below). We predicted it. Since November, Punto Nave has been reporting the warning "Keep away from any cryptocurrency and stable-coins".

The stable-coin USDC breaks parity with $

The problem is that SVB is a bank of services especially towards the technological sector and the world of crypto-currencies. Its losses, therefore, become losses for other nerve centers of the system. In the coming days, therefore, we will see chain repercussions generated on the rest of the American banking system and on the world of crypto-currencies.

WHAT TO EXPECT
Three days before the bankruptcy, the SVB had launched a capital increase of $2.25 billion and investors' response was a bank run, which drained the bank's residual liquidity. The cliché is now consolidated. At the first crack in the wall, one immediately thinks of the possibility that everything will collapse.
Therefore, we must expect a massive crisis of confidence and liquidity that starts in the interbank market and which also spreads to bank deposits and therefore to business loans.
Only the Fed could stem this contamination, either by providing (again) liquidity to the system or by guaranteeing the deposits of SVB's clients, the opposite of what has been done so far. A sensational retreat that marks what will probably be remembered as the most disastrous monetary policy of the FED.