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Are banks getting too unstable? - Kristaps Mors
Source: kristapsmors.com
Article summary:
1. Several US banks have failed recently, and a study found that 186 banks across the country could fail if half of their depositors quickly withdraw their funds.
2. The FDIC provides insurance against deposit losses up to $250,000, but they only have about 1% of bank deposits' worth of insurance in their fund, making them limited in their ability to provide insurance.
3. Bitcoin and gold have seen significant increases in value since the first bank failures on March 12th, indicating a lack of trust in the banking system and a potential shift towards alternative investments.
Article analysis:
The article "Are banks getting too unstable?" by Kristaps Mors raises concerns about the stability of US banks, citing recent failures and stock market fluctuations. The author also highlights a study that found 186 banks across the country could fail if half of their depositors quickly withdraw their funds. The article suggests that increasing interest rates at a fast pace may be one reason for bank failures and that fighting inflation might get postponed to restore faith in the banking system.
While the article provides some interesting insights, it has several biases and unsupported claims. For example, the author suggests that Bitcoin and gold are safe havens during times of bank instability without providing any evidence to support this claim. Additionally, the article seems to promote investing in short-term Treasury bills and keeping money in "too big to fail" banks as a rational thing to do without exploring other options or potential risks.
The article also lacks balance in its reporting, focusing only on the negative aspects of the banking system without acknowledging any positive developments or efforts being made to improve it. Furthermore, while the author cites sources such as Lyn Alden's newsletter and Arthur Hayes' Kaiseki, they do not provide any counterarguments or alternative perspectives.
Overall, while there are valid concerns about the stability of US banks, this article presents a one-sided view with unsupported claims and biases. It would benefit from more balanced reporting and exploration of alternative perspectives.
Topics for further research:
Positive developments in the US banking system
Alternative investment options during times of bank instability
The impact of increasing interest rates on bank failures
The role of inflation in the stability of the banking system
Counterarguments to concerns about US bank stability
The history of bank failures in the US and their causes