Why Big Banks Are COLLAPSING - Silicon Valley Bank & Signature One Bank Fail
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- Опубліковано 5 вер 2024
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Bottom line: those banks were over leveraged and/or no liquidity and/or speculative. The government should not bail out over the $250,000 FDIC since they were very risky and knew the government would bail them out if everything goes south.
a sikh guy saying "our". OK dude
Feds are clueless with only one interest rate tool and they have gone too far too fast. It will take 6 to 12 months to see the effects. In the 70's 19% rates did not bring down inflation quickly so that alone will not work. Creativity is needed eg. a temporary 5% federal sales tax to discourage consumption of non essentials. They have that in other countries.
This is scary. Rich people pay politicians to make sure they get access to taxpayer funds first when banks shutter or they're in jeopardy of losing all their money. I feel bad for the lowest paid workers that may be affected, but not CEO's. A lot of them have created this abusive corporate pay structure where they are paid 300 to 400 times above the salary of entry level workers. Most add very little value. They posture and perform with speeches, meetings, and excessive travel to provide the appearance of working hard.
Very big con and that is why i have always maintained that people should never have their money in the bank! Get a financial advisor and even make so much more while saving!
Very true , I diversified my $400K portfolio across multiple market with the aid of an investment advisor, I have been able to generate over $900k in net profit across high dividend yield stocks, ETF and bonds in few months.
@@MarkFreeman-xi3rk Please can you leave the info of your investment advisor here? I’m in dire need for one.
My consultant is Margaret Johnson Arndt I found her on a CNBC interview where she was featured and reached out to her afterwards. She has since provide entry and exit points on the securities I focus on. You can look her up online if you care supervision. I basically follow her trade pattern and haven't regretted doing so.
I Found her online page by searching her full name, I wrote her an email and scheduled a call, hopefully she responds..
About the current bank situation, I'm really concerned. I am worried about a lot more if a bank the size of SVB may fail. I have a friend who manages a fast-growing startup and was severely impacted by the bank run. I have taken more than $840k out of my bank. Since the FDIC only provides coverage up to $250K, an implosion could have negative consequences. presently want to invest in the stock market. Does anyone have any ideas on how I might proceed?
It's often overlooked that banks are also corporate entities driven by greed. One of the contributing factors to SVB's collapse in 2020 was the banks' excessive leveraging of assets. However, on the advantageous aspect, economic downturns offer numerous prospects for ordinary individuals to create wealth from the ground up. Nevertheless, seeking guidance from an investment planner might be necessary if you desire a more assertive return.
In the world of fina-nce, rece-ssions are prime opportunities for wealth creation. When my port-folio suffered a significant loss in April of last year, I realized the need to enlist the expertise of a financial consultant. With her guidance, I have not only recovered from my losses but also generated a profit of 450k. The knowledge and skills I have acquired through this experience have been inval-uable in my journey towards finan-cial success.
@@joshbarney114 I find this very intriguing. Can you suggest the name of your advisor? I could greatly benefit from some guidance.
@@FabioOdelega876 "Colleen Janie Towe" is my adviser and she is highly qualified and experienced in the financial market. She has extensive knowledge of portfolio diversity and is considered an expert in the field. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
@@joshbarney114 Thank you for sharing this. I took the time to Google the individual you mentioned, and after reviewing her resume, it is evident that she is a seasoned professional. I have reached out to her and am eagerly awaiting her response.
FED: "We need more people to lose their jobs and go bankrupt and feel economic pain"
Two days later ...
FED: "Not those people"
I love FED, hope car prices will go down.😂✌️
@@jonmayer327 The price of automobiles will go down because no one will be able to buy them then interest rates would go through the roof because everyone is high risk in a real recession/depression. Then they will pivot to QE infinitely inflation will keep going up. You will eventually be making $60,000 a week because the fiat monetary system is completely broken. The problem then is a simple car will cost $250,000 in us currency.
@@Orangepilldispencer Hope what you tell me it will not happen i just want to wait to buy a car for 10 000€, in Europe. 😂✌️
@@jonmayer327 Maybe those sketchy dealerships will finally get on board with the idea of "cash" buyers, and stop treating them like second class citizens.
@@petek2832 They want to get rich, fast and now it's the time, they bought cars 2 or 3 years ago and now they sell them overpriced. And they say oo inflation, really?
We only share in the losses, never the profits. This game is getting really old
exactly it’s ridiculous. you have people homeless and the Fed WORKING to make 7 million people unemployed telling us the pain is necessary… but these rich guys cant be allowed to feel any pain
Socialism for me, not for thee...
And every dollar will disappear into Ukraine
Exactly. It is like buying a lotto ticket: if you win you keep it all, if lose everyone gives you money to pay for the ticket.
Great point!!!
Jaspreet, thank you for being one of the few who is trying to educate people about what is going on and why. There are too many out there already using scare tactics regarding the bank failures to scam people.
I am seeing NIO44X everywhere can you make a video for these ico projects especially NIO44X
Flat out depression. Just say that lol.
And this whole mess is exactly why Andrew Jackson hated the central bank to begin with. 😒
My three favorite channels: Minority Mindset, Stock Brotha, & J Bravo. Make my week complete!
Check out Economic Ninja as well. All the best
I'll have to check out Stock Brotha and J Bravo. Shameless shoutout for Richard Fain, Real Estate Mindset, and The Plain Bagel.
What? No Plain Bagel?
OK, so serious question. I got $40k in the bank (saving for a rental). Should I pull it? I know it's FDIC insured, but will my money be tied up for weeks or months if the bank fails?
Hell yes $ BeY20XC. Going to have a huge Q4
exactly what i am not going to invest, scammers
I’m tired of these continuous money games they play.
If Fed bails out SVB Depositors. Every other Banks Depositors will the expect same. Where is the Fed gonna get the money for that ? By raising Taxes and Printing money. Both of which fuels more inflation.
But those checks people got from the pandemic are to blame! When I say blame, I mean, like for everything! Now, hold up while we bail these amazing companies, banks, and other nations. 🤑🤑🤑
SVB was sitting on bonds which was earning them less as interest rates went up. SVB bank was used by startups who had ton of cash. As interest rates rised bonds value went down, ONLY if you sold them. SVB had to sell their bonds as main depositors made a run on their money. Due to interest rates being so high depositors wanted their own money as borrowing money is getting expensive. The other bank was more involved in Crypto.
Seeing NIO44X breaking 1$ had me make out with a random gradma on street today.
The system is not broken itvis funtioning as designed.
I’ve lived there Carter ! Gas lines 14% interest !you young people have no idea how bad it can get !
Everything you've said is 100% correct.
The only thing I would add is the one additional problem SVB had was that a major part of its business model was based on Diversity, Equity, Inclusion instead of sound banking principles. That is what caused some of their investments to be underwater. Then you add to that the treasury bonds being worth less than they paid for them (like you already said) and collapse was, in my opinion, inevitable.
Profits are personal, losses are socialized!😢
Govt still gets 30-40% of profit every year from corporates.
During the 1989's interest rates were in DOUBLE digits .
You are spot on. Absolutely. Yet they ignore it washed under the rug as if it didn’t happen.
Really enjoy how you explain things for simple me to understand! We have to prepare ahead of time, living below our means so we are financial able to take advantages of opportunities.
Love your channel. Thanks for all your work.
I can tell from the car, you were passionate about covering this and couldn't wait to inform us.
Educating over Emotions. Thank you Minority Mindset.
You are a UA-cam Gem. Your videos are not as edited as other UA-camrs so I did find myself slacking watching your videos because of the lack of dopamine. But the info, your amazing talent of teaching, and the fact that you are literally obsessed to the core with helping people with financial literacy, makes your videos so dang unique and needed. Thank you for existing!
When my dad was a Kid to be middle-class meant you owned a two story home in the nicer part of town. When I was growing up middle-class meant you owned a small ranch-style house didn't matter where at in town. My Nephew and Nieces are growing up now and to be middle-class you own a double-wide trailer. If the trend continues than Middle-Class could mean just renting a renting a trailer in a trailer park. It's why I personally don't like when Fed use blanket terms like "Middle-Class" because they can shift it to mean whatever they want. An actual dollar sign is what I would prefer.
My NIO44X shorts are doing pretty well and I plan to hold much longer.
I would advise otherwise.
Stock ticker number?
call and try to take 10% it is not there fugazzi
I bought ZIM up 2k and they just announced a 6.40 per share
This week is hell and a bloodbath can happen but why we don't discuss the fact that Amazon also released their NIO44X in it? Always two sides of a coin
Why don't we discuss the fact that you're a scambot instead 😏
These mofos are swarming the comment section like moths, it's sad
@@rodiculous9464 It's insane how many of them there are, this is why I think tech companies are over valued.
Hello Jaspreet,
I have to say that I really enjoyed watching your videos. It’s very educational and I only wish I knew about all that you are discussing when I was on my 20’s.
First republic bank too
It's contained to the two real banks that made the mistake of messing with crypto. Don't think I heard that mentioned.
Dude. You’re the best. Only place you need to visit to understand what’s happening is here.
And thanks for the daily email.
HSBC London has bought the UK branch of Silicon Valley Bank for £1! So there is that!
looks like more banks are failing. should we be taking our money out? i need to know.
Stock buybacks need to be made illegal again.
Maybe if these companies just "pulled themselves up by their bootstraps" and saved for a rainy day they wouldn't be in this predicament.
Hahahaha are you forgetting you live in a criminal country?? Why would they do that when they can steal from you, your kids, your grandkids and you yellow belly’s just let it happen. Why would anyone pull themselves up by their bootstrap when they have access to millions of peoples hard earned money. You haven’t held the government accountable. You haven’t help the corporations accountable.
It was known as inside trading.
It was illegal, now it's good bizness for wealthy insiders to become insanely moneyeyed.
Give them great power as globalist / faschist.
No, stock buy backs are not the issue at hand here.
No! How else can these idiots make more poor decisions?!
@@shrimuyopa8117 They may not be the issue at hand HERE, but that doesn't negate the fact that it's a huge problem.
There was lectures some politicians gave a few years back about ending "American dominance" and transferring wealth to other countries... jump to today debt payments higher than ever and increasing... money being sent to countries and debtors increasing the amount of debt...
It is absolutely DISGUSTING how tangled they have made it to earn money with all of these schemes. Life used to be you go to work earn a paycheck and you lived great. Now with all of this greed, people are doing the most to swindle as much money as they can. I remember growing listening to the News and one day they said company profited $300K and the next day I was hearing about companies profiting a million dollars. Being as young as I was I knew something was off. Fast forward to today and our financial situation is a total mess. I despise GREED!
Not everyone wants a simple life like you. And I suspect you're older, seems a common theme.
Hate to say it but capitalism is completely based on greed the system was designed around it
Greed has always existed. Ignorance feels blissful but ignoring the world doesn't protect anyone. Get wise or get rekt.
I see exactly what you are saying. More sophisticated ways of doing things are fine but the problem is the government rewards (bailouts) to the ones who committed the crime and punishes the innocent bystander (loss of jobs, savings, social security going bankrupt, etc.)
@@Userhfdryjjgddf Wow, I never thought I would hear someone basically say that a chaotic life is better than a simple life but to each their own. I have a kind heart so I am listening to how many people living paycheck to paycheck and are being laid off and it saddens me that so many people are suffering right now. No one cares until it happens to them😔.
Advice at the end is very useful. 27:00
Thank you so much for your passion in helping people about money! I really appreciate it! ❤️🙏
I'm glad you share your insights with the public. You may want to look at tax shield on interest and leverage and profitability, specific the implications on the cost of borrowing money on a key metric like ROIC.
Interest Rates were artificially low from 2016 to 2022 creating hyper inflatiom
Why is this crisis hitting large banks, and not essentially any bank? The bank I personally use for everything is a large Midwest one, but my mortgage is through a tiny little off-shoot bank in the middle of nowhere. Maybe I need to transfer my accounts there.
Outside of convenience, there is no other reason to keep your money in a bank. Sure you need an account to move money through, pay monthly bills, get direct deposit into.....but there is no point in keeping a cash savings in a bank. Worst case, you would need to wait a few days to deposit the cash you would need to cover an emergency that happened over a weekend. And that's only if whoever you have to deal with either won't accept cash (fat chance), or it's just not practical due to proximity.
Thanks very much for this. It is the best explanation I have heard of these issues. It really helped me to understand.
It was really helpful as well.
Which banks are next? This is scary
First Republic
Us bank. One main financial
Credit Suisse
I followed minority advice and saved 1000s on my new home.Thanks to variable intetest rates I'm saving cash every month.
Established Credit unions are still grounded; bankers breath different air than us middle class folks and as a result we are viewed as targets for revenue with no repercussions for irresponsibility
I am still waiting housing market to collapse that's only way I could afford to buy my own house
Lol funny
Waiting for something that might not come
You need to get a chair!
Is obvious you don't understand how the economy works! Just go and fucking buy a house right now!
@@gabrielrojas8718 I am waiting another 2008 and it's coming soon this year
The issue is the lack of supply of homes. Do you think new-construction builders are going to aggressively build during a period of high-interest rates?
The you-tubers like Economic Ninja and Jeremiah Babe are just wrong. Yes mass foreclosures are coming. But the supply is so low, and the investment banks like Blackrock are increasingly seeing RE as a safe-haven for cash. I bet they are in better shape than banks over-leveraged in bonds!
I don’t like it either. We’ve got problems.
You are are very smart man. Thank you so much for your videos.
Greenspan was the Chairman in 1987 to 2006. He started the wreck with 17 rate hikes.
I know I made the right decision to subscribe to this channel. Informative, efficient & transparent.
Very informative video. It is always good to see a professional like Jaspreet give their thoughts on these issues.
I want to disagree with the stock buybacks in some ways. Sure stock buybacks inflate the stock price a little bit, but it is more or less all the free stimulus and money in the system that inflated everything. Stock buybacks barely touch this. Microsoft for example has a market cap of around 1.7 Trillion. They only had 25B in stock buybacks in 2022. That is less than 1.5% of the total market cap for that company. Not many companies can get past the 5% mark per year without taking a hit to their finance sheets long term.
Jaspreet ! You are great economist ! And your explainations are perfect ! Keep up your good job ! Thanks
Always looking forward to the next vid from Jaspreet 💪🏼
It wasn't just the run on the money that caused the SVB failure...
It was inflation and bond devaluation.
Inflation led the Fed to raise rates. New bonds are now more attractive than older bonds with lower interest rates.
A substantial portion of SVG held assets were these low interest rate bonds. No one wanted them so SVG had a liquidity problem compounded by run on the bank.
Ultimately it's Bidenflation and the Fed money printing that are to blame.
First Republic is cratering, yikes
Appreciate your wisdom.
FED: We are NOT bailing out the bank, we are just taking over all the losses the bank would have had and making everyone whole
Everyone: Isnt that the definition of a bailout?
Yelp!!!
Well it is fairly close but not the same. At least in this scenario the banks will go under (so that doesn't encourage the bad behavior), its just their customers don't lose out. Don't get me wrong, I hate this scenario just as much as you probably do but there is a small win here in that these banks are going under.
Mm idk I tend to not be into the idea that the ppl that banked there should lose their money.
@@shrimuyopa8117 I understand your reasoning but the fact that the bank itself isnt being saved is irrelevant. The same people and entities behind SVB can start a new bank tomorrow called Sillicon Hill bank because the government bailed them out of their responsibility. They should be sued and never be allowed to do anything in banking ever again barring any jail time, thats not happening because governement bailed out the owners of the bank and not the SVB name.
@@Senza_1 Wish i could start a business, take peoples money and when they come to collect have government jump in and pay them for me while I exit stage right. Its a moral hazzard. Those responsible should be sued and barred from the banking business in perpetuity. Thats not happening anytime soon because of government.
oh and one other thing, when those people opend up accounts they signed an agreement stating they are insured by the FDIC up to 250.000 and they agreed to that, I dont feel bad for them at all, its called taking responsibility.
Thank you for clarifying what is going on. We appreciate you!
Thank you!! The best advice I’ve heard about this financial crisis🙏🏾
you explain really well thank you
Absolutely the best clear communication of the current situation. Awesome please don’t stop!! 😃🎉
Wouldn't returning to a 10% fractional reserve slow down the velocity of money and reduce inflation? Why wasn't this tried before messing with interest rates?
"Why wasn't it tried...?"
Because it would make sense? =/
Interest rates in the USA were very high in the eighties. In October of 1981 mortgage rates were 18.45% and started there long climb down until the 1990. Look it up, I was there.
Next on Deck First Republic and Pac West bank runs.....
Don't forget 1981, inflation had risen to 9.5% and the fed funds rate pushed mortgage rates to an all-time high of 18.45% . Don't kid yourself Rates have to go much higher. maybe not as high but higher. Inflation will only come down when people stop buying what they want and only buying half of what they need.
Silvergate fell 48 hours before Silicon Valley Bank went down. Also we risk losing our status as the world's reserve currency if we don't get the debt ceiling raised in a timely manner so that we can pay the debt that we have already accrued.
Whats the point of a debt ceiling if they just raise it every time?
Silvergate Bank also failed. That's three banks, so it's not just Signature Bank and Silicone Valley bank.
Ron Paul knows why….
THEY ALL KNOW WHY!👱♀️👱♂️👈🏾👩🏾💻
Appreciate the info and education you are providing. Ran across your channel a couple months ago and it has helped me. Thank you for what you do.
5:26 bro why you gotta do that?? Thanks for the info
Your real-world analysis and easy-to-understand explanations are world-class and spot-on. Thank You.
But we can also have deflationary pressures in the supply chain finally catching up. If corporations stop with the price increases and gouging inflation could subside.
Just makes me wonder how much was learned from 2007/08 when the banks started to go bankrupt and then 13 odd years later something similar seems to be happening again.
This is the 3rd one. Silvergate, SVB and Signature
Finally, a nice backround, litterally. The stripes look good
Thank you for this informative video
Sir, how do you feel about ETF’s in emerging markets? I’ve been looking at some in BRICS.
Thank you for taking the time
I feel so lost financially. I'm struggling and just trying to survive.
why are the working class the poorest class?
We don’t own our own labour.
RL2XE has great potential with the Vasil Fork!!!
I’m so glad I found your show . Such valuable information
In times like this GOLD and SILVER will be going up up and away!
Not if the market manipulators have anything to say about it! 😆 An ounce of gold should already be well over $2000/ozt. USD. It's not. I guess at around $1800 it's a buying opportunity. Silver is severely undervalued.
@@justacinnamonbun8658 1900 now.
Thank you...for all u do..keeping us informed/real explanation of what's going on...
I've got a BA(Hons) Economics but it hasn't stopped my shares from being hammered today. Especially green hydrogen shares (UK) ☹️
What you described is not "fractional reserve banking". It is much much worse than that.
Watch "Money masters" by Bill Still to get an idea.
It was a classic case of Silvergate, SVB and now Signature One concentrating their investments on too narrow a focus. That's not a good model for these banks to operate with. If you look at the likes of Bank of America or Citi, they have a very wide-ranging investment portfolio to prevent such financial debacles.
Surely not talking about stimulus payments. Record credit card debt and plummeting savings rates are evidence against that argument. PPP loans? Instead of paying employees 75% was pocketed by business owners. Gas prices, super low interest rates, and equity loans? Maybe.
Remember Game Stop? Enough people did the same thing very quickly.
Super cool video ! Do you think amazons RL2XE will pump before ETH ? I ask myself if there is a pattern in the order of the altcoins pumps.
How is Tech companies more sensitive to interest rate hikes, asking for understanding.
thanks for the great explanation. but what is the best option for decision makers, from least impact to US population and also pay debt faster to bank
Great job on your analysis. 👏👏👏
Very informative. Thanks.
Exciting times for Amazon’s RL2XE and it's community.
Where can we find out which companies did leveraged buybacks?
Thanks for sharing your insight. Very helpful stuff. This maybe a dumb question. But what app do you suggest to use for ETF's? I currently use Robinhood for other investments. Is Robinhood a suitable app for VTI, SPY and other ETF's?
gov't officials problem. People know printing money causes inflation except gov't.
On RL2XE go long when the sell pressure reduce.
The FED bail-out of all SVB depositors (above the FDIC $250K cap) means the FED wants to calm fears of a bail-in across the banking system.
That means use the extra time to move your cash out of the banking system as soon as you can, because other banks are at severe risk of contagion.
You have a little bit of extra time because of this bail-out, but know that the FED can't bail-out the whole banking system.
Move your cash to pay-off your debt, invest in productive real estate, physical delivered bullion gold & silver, and research 100% untraceable cryptocurrencies, like Monero [XMR].