US banks borrowed almost $500 billion last week and depositors have moved $500 billion since Silicon Valley Bank collapsed. The WSJ reported that over 200 banks are in a similar situation as SVB. If all this hits before the US can raise the debt ceiling, we’d be looking at a catastrophic default. If they manage to raise it in time, we are still looking at the same outcome.

The Fed is out of solutions and can’t kick the can down the road anymore.