On Today’s Episode:
Here’s how the second-biggest bank collapse in U.S. history happened in just 48 hours. Silicon Valley Bank closed its doors today. Within 48 hours, a panic induced by the very venture capital community that SVB had served and nurtured ended the bank’s 40-year-run.
Regulators shuttered SVB Friday and seized its deposits in the largest U.S. banking failure since the 2008 financial crisis and the second-largest ever. The company’s downward spiral began late Wednesday, when it surprised investors with news that it needed to raise $2.25 billion to shore up its balance sheet. What followed was the rapid collapse of a highly-respected bank that had grown alongside its technology clients.
You are not alone if the recession has you nervous about what to expect. People have real concerns about whether or not they’ll be able to afford groceries, gas, and even rent!
For sure you’ve heard that millionaires are made in recessions, but how?
Jaspreet Singh is joining Tom for a second time to get you up to speed on what it takes to get wealthy during any recession. Jaspreet is the Minority Mindset guru and Chief Money Nerd at Minority Mindset Companies. He’s been creating financial education videos on YouTube for years and is breaking down all the reason you don’t have to be scared during a recession
Jaspreet is a voice of reason to remember that recessions are only bad or good in relation to which side of the equation you are on. This is a must watch if you’re trying to find the best route through a recession that has most people nervous and panicked.
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BREAKING: Recession News
LEARN MORE ABOUT: Bank Failures
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
Silicon Valley Bank Meltdown Explained: How to Prepare for the Recession
In recent times, the global economy has been hit by various challenges, including a pandemic, trade wars, and political uncertainties. With these factors, it is no surprise that Silicon Valley, the renowned hub for technology and innovation, has also faced its fair share of difficulties. Silicon Valley Bank (SVB), one of the biggest financial institutions supporting startups and technology companies in the area, has experienced a significant meltdown. In this article, we will explore the reasons behind this meltdown and discuss how businesses and individuals can prepare for an impending recession.
SVB, like many other banks, is heavily reliant on the success of the companies it invests in. With the COVID-19 pandemic causing widespread economic disruption, many startups and tech companies have struggled to survive. Unlike larger corporations, these companies often lack the financial resources to weather a prolonged downturn. Consequently, SVB faced increasing defaults on its loans, declining valuations of its portfolio companies, and a tarnished reputation as it struggled to support its clients.
One of the primary reasons behind SVB’s meltdown is its exposure to the highly volatile tech investment market. As the technology sector experienced a bubble-like scenario, with overhyped valuations, SVB’s loan portfolio became increasingly risky. When the bubble burst, the bank faced a flood of defaults and significant losses as the values of its investments plummeted. This exposure to the tech industry’s boom and bust cycles proved to be a substantial risk for SVB.
Furthermore, SVB’s heavy reliance on startups and early-stage companies also contributed to its meltdown. Startups inherently carry a higher risk of failure compared to established corporations. Any economic downturn, such as the one caused by the pandemic, hits these young companies first and hardest. Consequently, SVB found itself dealing with significant loan defaults and struggling to support the companies it had invested in.
In light of this meltdown, both businesses and individuals need to prepare for the repercussions it may bring. While the future may seem uncertain, there are steps that can be taken to mitigate the impact of a recession and protect oneself financially.
1. Build an Emergency Fund: It is crucial to have a financial cushion in place that can cover at least three to six months of living expenses. This fund can help tide you over in case of a job loss or a slowdown in business.
2. Diversify Investments: Instead of solely relying on one sector, spreading investments across different industries can help reduce risk. Diversification allows for stability even if one area experiences a significant downturn.
3. Focus on Cost Optimization: Businesses should review their expenses and identify areas where costs can be cut without negatively impacting operations. This discipline will ensure the business remains lean and efficient during tough economic times.
4. Rethink Debt Management: Individuals and businesses should reassess their borrowing strategies. Reducing debt and maintaining a manageable debt-to-income ratio can provide flexibility and reduce financial stress during a recession.
5. Stay Informed: Monitoring economic indicators and market trends is essential to understand the local and global economic landscape. Keeping up with current affairs helps individuals and businesses make informed decisions and stay ahead of potential challenges.
While Silicon Valley Bank’s meltdown is undoubtedly a significant event for the tech industry and the broader economy, it serves as a reminder that preparing for a recession is crucial for both businesses and individuals. By building financial resilience and adopting prudent financial practices, one can better navigate the challenges of a downturn and potentially emerge stronger on the other side.
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First SVB, then signature bank and now first republic bank, these are all the signs of yet another 2008 market crash 2.0 , so my question is do I still save in the United States dollar or is this a good time to buy gold?
Hindi
You still didn’t learn how to host the show. We want to hear what everyone else has to say. Not you. Talk less, and let the guest speak.
Not just gold, a lot of people are buying up US dollars too. Hence the high dollar compared to other currencies. So I feel this guy is just sharing one side of the story.
Go into Bitcoin
I think crypto is the future, I’d suggest Bonaveststockfx than this so called banks that ran away with our money..
Well, here's another question….There are many who understand how the world works, but are stretched so thin they have literally zero money to invest in anything aside from food and shelter. These are people who aren't out there spending recklessly, these are people working 50+ hours a week, driving a basic economy car and living in a tiny house-if even that. So, this advice is wonderful for those with disposable income, but what is some advice for the MAJORITY of American's who are living pay check to pay check? Thx.
I wonder what's up with Tom …he seems a bit on edge lately?
american economic wings will be clipped by Brics
Awesome. Cheers for this video. Helped me out massively. I normally send over a small amount first to see if it arrives at the address. But too many distractions at home and I just sent it all in one go. Thought it was gone forever. All recovered now.
Don't let the naysayers let you down. This country is the best country in the world. Our water is secure and land abundance. There's a reason countries in the Middle East are buying land in the US for food. We might go for 10-20 years of stagflation like but unlike Japan, we are rich in resources and people. The future might not look bright but with time the sun will shine again. Don't think the middle east or Asia will remain peaceful like in our youth.
Turmoil is just over the horizon across the globe and the US might be too busy with its own problem to care. That's what I am afraid of the most.
Thank you this powerful podcast Tom !!!
Bullshit
Honestly crypto is quite profitable and lucrative I’d suggest Bonaveststockfx, which I think is more reliable than this so called bank that ran away with our money.
Inflation hits people a lot harder more than a crashing stock or housing market as it directly affects people's cost of living that people immediately feel the impact of It's not surprising that the negative market sentiment is so high now We really need help to survive in this Economics.
America is on its way out.
Bad start to the year with these banks collapsing, META down 40k, ALLP down 35k, Draft Kings down 6k, NIO down 15K, ABML down 8k, and my wife doesn’t know. I'm just hanging on to Jim Cramer's words about opportunities in volatile times so perhaps, I either wait for a recovery or pick profitable investments to substitute for my loss.
it's scandal when companies from China undercut at a loss to take over market share. the ride companies like ubr does the same world wide
Wait, they got $2000 checks in 2008? I thought that was for covid. The banks got bailed out in 2008.
I think the stimulus was $600 for individuals in 2008 up to $75K of income. $300 minimum for $3000 of qualified income. That’s not much if you lose your home.
Really enjoyed this discussion.
There are two things that are infinite, human stupidity and the universe.
Isn't it illegal to print money on funds that don't exist?
I always admire people who bother to learn the accent when they learn a 2nd language. In US schools, the accent is taught as part of the instruction. Every person in high positions learned the accent. It's just so refreshing to listen instead of straining to comprehend someone from another country.
White people are so full of it. You steal so many trillions on space, military, nepotism, and fraud (Fleecing of America) without oversight or recourse. You are so full of ish.
"Their" goal is to crash the system, don't a second they're not ahead of the game, they can't understand or haven't planned. They need to crash it, then propose alternatives the majority of people will not be able to refuse. Digital money and all
You need to deal with all your greedy capitalist robbers, and tax your 1%, in the US. Same in the UK.
Crazy surd
When they say don’t worry…. WORRY!!
Wow! I like the discussion at 1:11:30. Because I am creating a video about MINDSET. I can totally relate to it. I wish my MIND was opened when I was 20’s. But it’s ok. It’s never too late.
Brics is going to replace the us doller as world reserve currency and it over a dozen countries now i think and growing and went it does all those countries are going to be dumping all their money back into our economy and all that money is going to cause hyper-inflation like you can't imagine BUT the new better system can only be built on the ashes of the old, the solution HR-2435 to define the doller as a fixed weight of gold, I have been calling it for 2 years now, its only at the precipice that people find the will to change, to demand change
I don't think it'll be gold its gonna be oil.
"In order to have a healthy society, you need to have poor people…". Mannnn, what? If poor people are needed to have a healthy society, then that means your definition of "healthy" is seriously flawed.
Why are the BRICS nations talking about merging currency to facilitate trading? Because of the Euro. European nations used to fight and bicker now they cooperate and it has been a success. They enjoy peace. The same will happen now that the BRICS and newly affiliated nations will enjoy between themselves now that they refuse to be bullied by the dollar any longer. Most Americans dont even know what the petrodollar is. Was.
The only thing worse than a jack boot on your neck,is a cashless society, once the dollar falls and China takes over as the world reserve currency, guess who's social scoring system we will be tied too,bankrupting the world wide economy will continue,we knew this was coming for years now, we all hoped we would not see it in our life time,but I'm afraid it's coming, weather you like it or not.
Investing is the way to go the bank makes money from your Money and gives you nothing
LET'S GO BRANDON!
If you want to know about the collapse a nation read about Venezuela.
Wow a person like me would never listen to these two intelligent people. Just listening they are down to earth