I have seen only one bank run in my life (Orient Bank) and the debate in the newsrooms whether is it ethical to write a story that would result to a bank run goes on. Essentially, bank runs are self-fulfilling prophecies where you tell people that this bank does not have enough liquidity as buffer for all the risks it took. Of course, it would trigger withdrawals from depositors.

This is the second bank run I had witnessed and this unraveled on the same day I was listening to a hedge fund guy talk about how companies manipulate their books. How ironic.

“This was a hysteria-induced bank run caused by VCs,” Ryan Falvey, a fintech investor of Restive Ventures, told CNBC.

The series of rate hikes by US Fed has created so much credit tightening that more and more companies needed liquidity to keep them afloat. VC-backed firms could not do their series fundraising so they needed to extend their runways or they die. They needed to withdraw cash. The problem is not everyone has enough cash to go around and the sin of Silicon Valley Bank is that it didn’t have enough buffer.

This is where Asian banks have proven to be resilient, as they got burned by the Asian Financial Crisis of 1997-1998. Some banks here in the Philippines have complained that the Philippine central bank has been so strict with capital adequacy ratios and other capital requirements and that some of them are even way above the industry average. This saved basically the region from having the same degree of meltdown like in the West in 2008-2009. It did redound to us but securitized mortgage debts imploding in your face in Asia was not that widespread as in the US at that time. We did, however, suffer from the economic slowdown global recession that ensued.

It was just right for the BSP to be strict about capitalization because you have to have enough buffer for all the risks that you take. Especially now that interest rates have jumped so high that many borrowers may not be able to service their debts. The macroeconomic environment has become so hostile that SMEs have to look for ways to sustain themselves and at the same time they need to continue servicing their obligations. What if all these borrowers default on their loans or worse, go belly up? What would a bank do?

As the hedge fund guy told us over breakfast last week, this crisis is different from the others in the sense that it is very much tied to macroeconomics. Unlike in the GFC of 2008-2009, which was instigated by loose credit standards (as a result of very cheap money that the US Fed unleashed in prior years), this current one is tied to a very tangible metric–INFLATION–and the equally devastating tool to tame it = climbing interest rates.

The Volcker years (late 1970s to early 1980s) at the US Fed didn’t give single fuck to anybody at that time. The US Fed had hiked interest rates so much (Volcker Shock) to keep inflation down. Inflation has plagued much of the world, especially in the US, in the 1970s with the oil crisis raging on (caused by geopolitics and redounded to worsening geopolitics). So it seems like this time is no different because we had commodities price shocks and a war going on that warped everything from logistics to supplies. Then we see the seemingly unending interest rate hikes. Then, like a classic economics textbook case, stagflation will enter the picture.

During the GFC of 2008-2009, I was in the center of it all. I remember listening to a European banker who told us way back in 2006 that the US will have a housing crisis given the subprime mortgages that have become unsustainable. It was a bad time but it was the best time to be a business journalist. I had been the on the front page of my newspaper for three straight days writing about the fall of Lehman Brothers and the AIG breakup, which affected one of the country’s biggest insurance companies. The local stock market bled like it has never bled before. However, at that time I didn’t understand how the short-sellers made a big mess or how much of a genius they were. I only understood after I read The Big Short. But still, the adrenaline rush was different.

This time, I’m in the middle of it again but on a much bigger platform. I will be deep in bigger crap and I need to be smarter in picking which battles to write about. Learning about the accounting red flags during the workshops last week excited me. This time I now understand how short-sellers have started to destroy Adani (which is a separate matter from the ongoing crisis but this could be tied together in the end). It fired me up learning about the things this hedge fund guy told us about the things to watch out for now that this crisis is starting to implode.

This is terrible overall but oh my goodness, there has never been a better time to be a business journalist than at this moment.