JPMorgan, First Republic and the curse of the second best

Bloomberg/Mohamed A. El Erian/5-1-2023

“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. El-Erian says the US government institutions, and he includes the Fed in that grouping, have shown “a repeated inability to come up with an optimal solution.”