Read somewhere that one of the major wall Street banks will probably buy the whole bond portfolio for 100 cents on the dollar just to avoid the headache of this whole thing turning sour.
Turning sour?
I think you are rather underestimating what is about to go down.
There's a pretty good chance some large depositors are going to start pulling their $$$ out of certain banks in a big way, starting tomorrow AM. It's hard to believe people don't know about the 250K rule, but most do not. Now every news article has it in the first three paragraphs. They're going to begin parking their money elsewhere - other banks, T-bills, etc.
There's also a good chance the tide is going to start pulling out and a lot of banks are going to be naked. In other words, unable to provide owed funds to depositors in the coming days/weeks. Just like SVB. So what then? They'll start selling stuff like mortgage debts (low yielding at that - those amazing and mortgage/refi rates everyone jumped on are awful for lenders of course) at a loss. Not good.
But as
@grapedrink said - depositors have no need to fear - the FDIC is here!
Where does the FDIC get it's money? From the government.
But the government is broke. So where would the government get the money?
The Fed.
Oh, but the Fed is doing QT.
Oops.
In other words, the Fed is going to have to pivot, cut rates, and resume QE in order to bail out the FDIC/depositors and let inflation run...likely precipitating a crash of the dollar.
OR
The Fed keeps fighting inflation, the bond market crashes and takes out more banks, and depositors take it up the ass.