Two U.S. banks (Silicon Valley Bank and Silvergate) have collapsed. The Silicon Valley Bank collapse is the largest bank collapse since the 2008 recession, and the second largest U.S. bank collapse ever. The FDIC has taken control and is paying out depositors today, but with 95% of SVB’s deposits uninsured, will this spark contagion throughout the banking sector and the U.S. economy? In breaking news, the Federal Reserve, the U.S. Treasury and the President himself have teamed up to bailout the banks, once again.
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★ ★ CONTENTS ★ ★
0:00 Silvergate and Silicon Valley Bank Collapse
1:00 How Banks Work
2:03 How Silvergate Collapsed
2:28 How Silicon Valley Bank Collapsed
2:55 Why the Banks Lost so much Money
3:32 How Silicon Valley Bank Collapsed
4:30 The FDIC’s Big Problem
6:12 The Bailout Explained
7:33 The Fed’s Plan.
DISCLAIMER:
Neither New Money or Brandon van der Kolk are financial advisers. The information provided in this video is for general information only and should not be taken as professional advice. There are risks involved with stock market investing and consumers should not act upon the content or information found here without first seeking advice from an accountant, financial planner, lawyer or other professional. Consumers should always research companies individually and define a strategy before making decisions. Brandon van der Kolk and New Money are not liable for any loss incurred, arising from the use of, or reliance on, the information provided by this video.
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In recent months, the United States banking sector has undergone major changes, with the Federal Reserve stepping in to bail out banks facing financial distress. One of the most high-profile cases has been the collapse of the Silicon Valley Bank, which leads the digital economy in tech-heavy regions like San Francisco and Seattle.
Several factors contributed to the bank’s collapse, including risky investments and overexposure to the tech industry. However, the Covid-19 pandemic has also played a significant role, with many businesses struggling to stay afloat during lockdowns and social distancing measures.
In response to the Silicon Valley Bank’s collapse, the Federal Reserve has announced a series of major updates to their bailouts and regulations. These changes are aimed at preventing similar collapses in the future and ensuring the stability of the banking sector.
One of the most significant updates is a new program called the Main Street Lending Program, which will provide loans to small and medium-sized businesses that are struggling due to the pandemic. This program is designed to prevent a wave of bankruptcies that could further destabilize the banking sector.
In addition, the Federal Reserve is also relaxing certain regulations on bank lending to make it easier for banks to lend money to businesses and individuals. This move is intended to provide a lifeline for struggling businesses and individuals, but it also raises concerns about the potential for banks to take on too much risk in a volatile economic environment.
Overall, the updates to the banking industry seem to be aimed at finding a delicate balance between stabilizing the economy and preventing banks from taking on too much risk. The Silicon Valley Bank bailout serves as a warning to other financial institutions that risky investments and overexposure to a particular sector can have dire consequences. With these updates, the Federal Reserve hopes to ensure that the banking sector remains strong and stable for years to come.
For 2023, it’s hard to nail down specific predictions for the housing market is because it’s not yet clear how quickly or how much the Federal Reserve can bring down inflation and borrowing costs without tanking buyer demand for everything from homes to cars.
transportation, e-commerce among other sectors are expected to experience growth, but who knows, the market has been a basket of surprises.
Ever thought the bank was bailed out because it’s in a very important democrat state and the governor of that state owns three wineries who happens to have their money in SVB and stood to lose a lot of money! He also had personal accounts in the bank.
Hello Brandon, one thing that was not mentioned is the fact most sovereign countries that holds US treasuries has been selling down for the past 12 months. This is creating a supply vs demand imbalance and drop in prices in the old bonds. At the same time US govt is completely crippled with debt so they are trying to sell new bonds at higher rate to pay off the old debt (classic Ponzi scheme if anything). This is the reason why now every U.S. banks that holds US treasuries will face potential bank runs n that’s enough to worry Yellen
Hey Brandon I just wanted to say thank you so much for actually providing a rational perspective that's free of media-hype and chicken little "the sky is falling" sentiments. I think the most knowledgable and genuine videos are ones where analysts break down the information without bias and conclude that, truly, the future could see the market and public sentiment moving in ANY direction. Nobody can predict the future, and that being said the best thing we can do is take the data that is available and ignore sensationalist media that only seeks clicks and views.
Very interesting video! It is still worth earning stable and profitable on Crypton cryptocurrency now.
The failure of Silicon Valley Bank has torn into global markets, with investors ripping up their forecasts for further rises in interest rates and dumping bank stocks around the world. I'm at a crossroads deciding if to liquidate my dipping 200k stocck portfolio, what’s the best way to take advantage of this bear market?
Why was it called a bailout? It was a liquidity event due interest rate rises devaluing the SVBs huge 80 billion investment in bonds.
So much for bail in replacing bail out as per the 2014 G20 in Brisbane agreement – first test and failed dismally as usual. Bankers bailed out again.
WHEN THE FEDS BAIL OUT DEPOSITORS THAT WERE NOT INSURED YOU KNOW YOUR FINANCIAL ECONOMY IS ABOUT TO TOTALLY CRASH. TO MUCH BIDEN MEDDLING TO LATE. BUT DON’T WORRY BIDEN HAS MILLIONS OF FREE MONEY HE RECEIVED FROM CHINA. HE WILL BE FINE.
Wait theres a tech bubble?
Let’s go Brandon… biggest pyramid scheme in modern day history monetary policy and the pirates on Wall Street. Y’all are some dumb mofos
The whole banking system does have a problem, so do governments. But if they let the public lose faith in the banks and system, there will be chaos.
Brandon i gotta say great job at framing the situation and explaining it in a great and simple way to explain it
Well, if this clown would quit raising interest rates.
Hey I can’t pay my mortgage. Can the Feds bail me out? I took a gamble on the real estate market and didn’t know the Fed was gonna raise rates.
How will the fdic back these multiple billions of dollars when the fdic only has 25 billion in reserves
I think Joe just lied to us again . Tax payer bailout
AND YOU PLEBS ARE PAYING FOR IT HAHAHAHAH
It's amazing that people don't know banks are allowed to use your money to invest and not just keep it there at the bank until you want it. That's why I just always invest my money on my own. If anyone is going to lose my money it's me!
Next up credit suisse
Hey there man. I would like to do professional English captions (subtitles) for you. I can show you the samples if you are interested. Let me know. I also charge very less.
"That's just how it is."
Is why we're all here. Just bury your head in the sand now.
We will always need to be concerned for as long as this government continues to keep us suppressed. We don't need this government
It won’t affect normal banks because these weren’t normal banks.
This is why they don't want you to own guns because they don't want you to be able to have any power when they pull the rug out
Same shit different name. Essentially they are spending taxpayers money to cleanup a bankers fuckup.
Israeli firms managed to transfer $1 billion out of Silicon Valley Bank to accounts in Israel just before the bank was seized by the feds, the Times of Israel reports.
I think I bought too many dips too soon. Hoping this isn't going to be too long a recovery.
I wish I could subscribe to your channel more than once!
Bailing out silvergate was not necessary, but for svb it made sense
#svb #biden #tata bye bye
So just like that. The FED, overnight, decides to add another half TRILLION dollars to the taxpayer's debt in the name of making sure ultra rich, well connected, high-risk taking 'corporations' don't lose any cash, no matter how flimsy the house of cards they built is..
You should do part 2 which is if the government bails out all depositors that gives other lenders the view they can be more aggressive in lending and thus bigger profits. There should have been blood on the streets with this as a lesson to other bankers and depositors. BE VERY VERY AFRAID NOW. Good vid.