, I explained how Silicon Valley Bank’s fall stemmed from its uniquely concentrated venture capital oriented deposit base, making a bank run easy but contagion unlikely.If you didn’t believe me, believe this: Through April 28 the S&P 500 is fully 6% higher than before SVB’s woes erupted — rivaling the high year to date. US financial stocks fell further then — but even they staunched their downside over the last month.
Was Credit Suisse contagion? Decades of lousy management killed it – 92% off its post-financial-crisis high before SVB blew up. Zero surprise. Teetering, it. Markets fathomed this. Headlines and individuals couldn’t. Since September, stocks rose past heralded fears like midterms, Fed phobia, impending recession and lasting 1970s-style inflation.Or 2020? Amid depression forecasts and COVID-based “it’s different this time” talk, most deemed surging stocks “disconnected” from reality. But stocks were right. Why? That bear market’s cause and remedy were basic. Markets could calculate the economic damage fast, fathom past it, and correctly envision better earnings while few individuals could.
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