If there is any place where the vulnerabilities of the system to runs and fire sales have been clear-cut, it is money market funds.
...
Even without a fixed NAV, liquidity mismatch in other kinds of funds can still make them vulnerable to runs and fire sales.

Falling between the cracks here are floating NAV money market funds - neither fixed NAV nor other (non-MM) kind of fund. I suspect this was an unintended omission.
The alternative would be that she considers floating NAV MMFs to be relatively immune to runs and fire sales. That's not beyond the realm of possibility. The MMF runs she describes are due to funds breaking a buck and investors rushing for the gates (a la SVB, Reserve Fund) - first mover advantage.
Floating NAV MMFs by definition can't break a buck - they aren't fixed to a $1 nominal NAV. Redemption values vary continuously (fractions of a percent) rather than discretely (1%, a penny at a time).
FWIW, one can invest in floating NAV MMFs via Merrill. That's one of the very few advantages I can see in that brokerage, though one of which I'm not partaking.
Footnote 13 (in the OP) is a cite to https://www.sec.gov/news/press-release/2021-258
The proposed MMF rules she refers to would have removed redemption fees/gating, and imposed swing pricing on institutional funds. This 2021 proposal is still being worked on and seems to still be accepting comments (last one was Feb 2023).
Proposal: https://www.sec.gov/rules/proposed/2021/34-93784.pdf
Fact sheet: https://www.sec.gov/rules/proposed/2021/ic-34441-fact-sheet.pdf
Comments: https://www.sec.gov/comments/s7-22-21/s72221.htm
Mutual fund managers responded to the redemption fee/gating rules by managing the funds more conservatively so that the rules would never be triggered. They were concerned that if a fund got close to that point, investors would stampede out - first mover advantage redux.
Or something else might spook investors. Say, a pandemic.

Evidence indicates that SEC's reforms did not prevent runs during the COVID-19 pandemic. For example, prime MMFs—which can invest in all types of short-term debt instruments—held by institutional investors experienced net redemptions of about 30 percent of their total assets in a 2-week period in March 2020 (see figure). Some evidence also indicates SEC's reforms may have contributed to the runs. Some investors may have preemptively redeemed MMF shares to avoid incurring a liquidity fee or losing access to their funds under a redemption gate.

https://www.gao.gov/products/gao-23-105535
Notable in that report and in the SEC's proposal is the focus on institutional investors. (Swing pricing for institutional investors, relaxed restrictions on retail investors.) As with SVB, institutional investors are apparently the elephants in the room stomping on everyone else.

"The structural vulnerabilities at the heart of money market and open-end funds aren’t new. In the banking sector, capital and liquidity requirements and federal deposit insurance reduce the likelihood of runs taking place. In case runs occur, access to the discount window helps provide buffers for banks. Yet the financial stability risks posed by money market and open-end funds have not been sufficiently addressed.
Over the past two years, the SEC has proposed rules to mitigate the vulnerabilities plaguing these funds.13 The SEC’s proposals would reduce the first-mover advantage, reducing run incentives during times of stress. They would also require new liquidity management tools, while mandating more comprehensive and timely information on these funds for the SEC and investors."
https://home.treasury.gov/news/press-releases/jy1376

I saw that on Twitter. But +20% from the recent lows applies only to Nasdaq 100 QQQ/$NDX from the late-December lows, and not to Nasdaq Comp ONEQ/$COMPQ. Other major indexes had their lows in October and are still struggling.
Ed Yardeni, neither a perma-bull nor a perma-bear, now has 4,600 for SP500. I am watching 4,300-4,600 range myself to do some asset reallocations. https://ca.finance.yahoo.com/news/us-stocks-could-end-14-110609639.html

AAII Sentiment Survey, 3/29/23
For the week ending on 3/29/23, bearish remained the top sentiment (45.6%; very high) & bullish remained the bottom sentiment (22.5%; very low); neutral remained the middle sentiment (31.9%; about average); Bull-Bear Spread was -23.1% (very low). Investor concerns: Inflation (moderating but high); economy; the Fed; dollar; cryptos; market volatility (VIX, VXN, MOVE); Russia-Ukraine war (57+ weeks, 2/24/22- ); geopolitical. For the Survey week (Th-Wed), stocks were up, bonds down, oil up, gold up, dollar up. The US bank hearings provided insights into the crisis as the regulators watched. #AAII #Sentiment #Markets
https://ybbpersonalfinance.proboards.com/thread/141/aaii-sentiment-survey-weekly?page=9&scrollTo=993

Everything lost money last year, as you noted. VWINX was in the top decile in 2022.
https://www.morningstar.com/funds/xnas/vwinx/performance
Not so great YTD. At least part of that is due to its mandate - generate income. On the equity side, it invests in high dividend stocks. Vanguard is clear about this. The equity side of its benchmark is the FTSE High Dividend Yield Index.
https://investor.vanguard.com/investment-products/mutual-funds/profile/vwinx
VHYAX tracks this index. YTD it is down 4.26% vs. 1.99% for its category. While VWINX is actively managed, it swims in a pool that is underperforming this year. How have other high dividend equity funds done?
https://www.morningstar.com/funds/xnas/vhyax/performance

+1

Be careful what you ask about. You might get more than you bargained for :-)
There were a couple of exceptions to the "usual" step up rule in the past, there's one current exception (in timing), and potentially one in the future. Perhaps others that I'm not aware of.

Step-up in basis has been eliminated twice during the past 50 years, and each time, the change was short-lived.
Step-up in basis was first eliminated by the Tax Reform Act of 1976 and replaced with a carryover basis regime. The carryover basis rules were heavily criticized and repealed a few years later, before they had taken effect.
The Economic Growth and Tax Relief Reconciliation Act of 2001 repealed the estate tax and adopted a carryover basis regime [no step up] for calendar year 2010 only ...
Congress eventually threw everyone a curveball. In mid-December [2010], Congress retroactively restored the estate tax and step-up in basis for 2010 decedents. However, for decedents who died in 2010, estate executors could opt out of the estate tax and into a carryover basis tax regime.

https://www.aperiogroup.com/blogs/repeal-of-basis-step-up-third-times-the-charm
The current estate tax law generally provides for a step up (or down) to current value as of date of death. However, for estates subject to the estate tax, an executor can elect to do an assessment of all assets in the estate (it's all or nothing) on the alternate valuation date six months after the date of death, assuming that would result in lower federal estate taxes.
The exception to this exception is if an asset is transferred (via sale, distribution, or other method) prior to the end of the six month period, the individual asset is valued as of the date of transfer.
Recent federal and state proposals are floating around to tax billionaires on unrealized capital gains annually based on mark-to-market valuations.
https://itep.org/president-bidens-proposed-billionaires-minimum-income-tax-would-ensure-the-wealthiest-pay-a-reasonable-amount-of-income-tax/
https://www.washingtonpost.com/business/2023/01/17/wealth-taxes-state-level/
Under these proposals there would be no need for a step up because assets would already be valued at their last annual market price. Further, often these proposals are limited to easily priced securities. They might treat real estate and securities differently.

+1

It's a variant of TBTF bailouts. If the bank's insolvency doesn't rock the boat, it goes under. But if it is large enough to affect the financial structure .... A variant of the aphorism:

If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.

https://www.brainyquote.com/quotes/j_paul_getty_129274

+1 old joe excellent synopsis of the situation!

Just bought 10k SCHW. Already ahead $4.57! A winner, at last !!!

There was only 1 type of m-mkt fund during the GFC 2008.
The Fed then started unlimited insurance for m-mkt funds for 10 bps fees from 2008-10. After some resistance from big players, all complied.
From the lessons learned, m-mkt reforms of 2014/16 created 3 tiers of m-mkt funds - government, prime-retail, prime-institutional.
Huge shift into the government m-mkt followed.
But that was so huge that it may have damaged the commercial paper market.
So, the m-mkt reforms are being looked again - so soon.

Another possibility for a "safe harbor" option, if someone is etf savvy is the treasury floating rate ETF, USFR paying 4.79% now. It is all treasury bills with a duration 0f 0.02. In addition it is state tax free with 100% t-bills. This has worked well for me in this rising interest time but it can be bought and sold anytime without cost in most brokerages. I also own t-bills but USFR is hassle free if you do not wish to constantly roll over the t-bills on your own. I do not use the Fidelity rollover program because I prefer to be able to change each duration if appropriate when each matures and of course you do not pay the 0.15 ER of USFR in buying the t-bills themselves.

I'm not bothered at all by the extra coverage some uninsured depositors received at SVB. I'm just glad the FDIC agrees to guarantee deposits up to $250,000. Some libertarians want to go back to pre-1933 and eliminate FDIC guarantees for any amount. OH hell no !

Half of the deposits that remained post seizure have already flown the coup:
$119B in Silicon Valley Bridge Bank deposits on March 10th.
$56B in deposits transferred (sold) to First CItizens
-----
$63B in deposits pulled out of the bridge bank.
https://finance.yahoo.com/news/silicon-valley-bank-rapid-withdrawals-100029288.html ($119B)
https://www.reuters.com/markets/deals/first-citizens-said-be-near-deal-silicon-valley-bank-bloomberg-news-2023-03-26/ ($56B)
There's always a risk of failure. Just as we saw a move to government MMFs after Reserve Fund broke a buck, some large depositors have wised up to the fact that uninsured really means "at risk". Even though the Treasury provided temporary insurance after Reserve Fund failed and even after the FDIC covered all depositors at SVB.

ssue not easily dismissed by red herring arguments. Of course other instances of injustice have existed throughout history. Doesn’t in any way explain or justify this instance.
I think you missed my point. Depositors who get "only" $250K of insurance are not being cheated. They are getting their fair share of coverage. It's the fact that someone else is receiving extra that's the red herring. Sure you're envious, sure you think they shouldn't have gotten that extra coverage, but that's got nothing to do with how much coverage you fairly deserve - $250K.
My insurer decides to cover neighbor’s loss. Says it will recoup its expenses by raising my insurance rates and those of other paying customers.
You bring up cost, suggesting that this windfall (SVB depositor unlimited coverage) to others is costing you money. As has been recently pointed out, the FDIC bailout will be paid for by other banks, not by taxpayers. So the broad populace isn't bearing the insurance cost.
What about the costs you bear indirectly as a customer of a bank being assessed for this bailout? In 1993 the FDIC changed the way it charged banks for coverage - the more risky the bank, the more they were charged (risk-based premiums). So some of this is already built into the system. And unlike the auto insurance example that's based by neighborhood, this premium discrimination appears to be done bank by bank.
From what OJ posted at the top, it looks like the cost of the bailout might also be apportioned among banks according to the risks they pose. IMHO that would be a good idea.
Finally, in your example, your neighbor was uninsured, rather than underinsured. There's a red herring FDIC does not bail out non-member banks. Those banks don't pose systemic risks because depositors at FDIC member banks will not start pulling money out upon seeing a non-member bank failing.

The concern is that there is a lot of Twitter stuff on how this is going to destroy regional banks and eventually fdic fund. So it is important to throw light on this matter

And all it takes are a few well-known Twitterers or shark investors (eg, Bill QUACKMan) to start posting their thoughts (correct, well-meaning, or otherwise) and I suspect we'll see more bank runs taking place.[1]
But given how much CRE is held by pensions directly or indirectly, does anyone see this situation requiring a massive 'bailout' down the road to save things? Or will there be a sudden arbitrary rewriting of various accounting rules to better reflect the present day realities?
On a semi-related note, it's interesting that practically every statement these days by Powell, Yellen, etc keep saying "the financial system is strong" ... at what point does that start sounding like "thoughts and prayers" or "inflation is transitory" and lose all meaning?
[1] https://finance.yahoo.com/news/wall-streets-most-ruthless-investors-100300271.html

it was clear to the "market" (but not to regulators?) that IF the HTM Treasuries were marked-to-market, the equity (the book values) of the failed banks would have been wiped out.
What does "clear to the 'market'" mean? Are we talking about the magnitude of the risk of being wiped out by a run? Wouldn't the market incorporate clearly perceived risk into an equity's price?
If stock price is a metric of risk perception, it looks like the risk wasn't clear to the market until after SVB virtually failed. On March 8, SVB announced to the world that during the day it had run out of AFS securities and needed to raise cash immediately.
The March 8th closing price of SIVB was $267.83, with volume in its typical range of well under 1M shares traded. The price was up 16% YTD. The next day trading volume exceeded 38M shares and the price dropped 60% while the market was open. It dropped further after the market closed before trading was halted.
https://finance.yahoo.com/quote/SIVB/history?p=SIVB
https://news.yahoo.com/svb-shares-slump-again-clients-105042807.html
Technically there are only two failed US banks, SVB and Signature. Admittedly, Republic Bank would have failed without extraordinary measures.
https://www.fdic.gov/bank/historical/bank/bfb2023.html
Signature Bank was different from SVB, because its involvement in cryptocurrency did make its risk apparent after SVB's collapse. Barron's wrote:

Signature also had a cryptocurrency business. While Signature didn't have loans backed by cryptocurrencies or hold cryptocurrencies on its balance sheet, it had a payment platform for processing crypto transactions. But deposits associated with the crypto platform had been dropping, prompting some concern from Wall Street.
Before SVB's failure, there wasn't too much concern. Signature had 10 Buy ratings out of 17 analysts listed on Bloomberg following earnings reported on Jan. 17. The average analyst price target was about $145 a share.
As the crisis at SVB mounted, Signature stock fell about 50%. The company reported deposit balances of about $89 billion and loan balances of about $72 billion on March 8.

https://www.barrons.com/articles/signature-bank-shut-down-collapse-a0adf63f
So far, I haven't found a report that Signature's security portfolio was loaded with Treasuries (not that I've looked that hard). As you noted, all types of long term securities are subject to interest rate risk - not just Treasuries, and not just illiquid securities. It would be interesting to know, strictly as a matter of curiosity, what Signature was holding.

House sale and capital improvements to calculate capital gains on sale question.
So, house purchased for 'x' $ 20 years ago.
There is a capital gain on the sale of the property, which will be taxable.
Improvements to the property may be used to change the 'cost basis' for calculating full capital gains tax.
My question (below) is that it was stated that the owners made numerous improvements to the property over the years; which did provide for a higher sales price.
One example is, a very nice fence that was placed around the property that cost $5,000 15 years ago, but would cost $15,000 to build today.
The seller, of course, wants to keep the capital gains tax on the sale as low as possible.
It is my understanding that they may use the original $5,000 to change the 'cost basis'; whereas it is suggested they may use the $15,000 cost (when the house was sold), if the fence was installed today, to calculate the 'cost basis'.
In effect, they are suggesting using an 'inflation adjusted' value.
Is this allowed in the IRS tax code for calculating a property sale 'cost basis' to establish the capital gains amount???
Thank you for your time in sorting this conflict of thought about this process.
Catch

I’ll say again I am struck by the unfairness. Consider the following scenario:
- Being the frugal responsible type, I drive a $12,000 Chevy Spark for which I pay and receive collision insurance coverage.
- My irresponsible next door neighbor drives a $100,000 BMW and elects not to carry insurance.
- Neighbor wrecks BMW.
- My insurer decides to cover neighbor’s loss. Says it will recoup its expenses by raising my insurance rates and those of other paying customers.
- I ask - Where’s the fairness in this?
Issue not easily dismissed by red herring arguments. Of course other instances of injustice have existed throughout history. Doesn’t in any way explain or justify this instance.