It's like the 1920s; Not in a Good Way

You may have heard that there have been banks that have been on the brink (or gone bankrupt) recently. The ones that have made the largest splash in the headlines have been Silicon Valley Bank, Signature Bank and First Republic Bank. One of the most startling things is that there have been reports of people lined down the block to pull their money out.

This has happened before, and it bodes poorly for the economy. Bank runs can send cumulative ripples throughout the economy. As trust in banks wanes, more and more people go to take their money out. As people take more money out, more banks fail. As more banks fail, trust in banks wanes. It's not a good cycle.

Pictured: Crowd at New York's American Union Bank during a bank run early in the Great Depression

But in addition to these consumer and venture capital facing businesses, a giant is faltering. Credit Suisse, a global investment bank, has crashed. As noted on their website, Credit Suisse is one of the leading institutions in private banking and asset management. They are the bank for "successful entrepreneurs" (corporate speak for "rich business owners") and support private and business clients (corporate speak for "very wealthy families and entities") worldwide.

On a scale from 1 (Mom and pop bank) to 10 (Lehman Bros at $46B market cap in the height), CS is about a 7. It is going to send ripples throughout the investment sphere of public companies, first in lending, and then elsewhere. Trickle-down economics is real. It's just for losses instead of wealth.

Both of these things happening at the same time? I don't like the signs. It could be that people are realizing the emperor has no clothes.