Silicon Valley Bank, Signature Bank and Silvergate bank have all collapsed throwing up a warning signs that something horrible is happening in the economy. But what’s the truth here? This is a story of incompetence, a changing economic environment and political lobbying.
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The US Banking Crisis of 2008 sent shockwaves throughout the world, causing the collapse and near-collapse of major financial institutions, and triggering a global economic recession. The crisis was a result of a variety of factors, including government policy, financial industry practices, and the housing market.
One of the main causes of the banking crisis was the lax lending and underwriting standards by banks and other financial institutions. Banks were offering mortgages to individuals who had low credit scores, no down payment, or insufficient income to cover the payments. As a result, many of these homeowners were unable to make their monthly mortgage payments and ultimately defaulted, leading to the housing market collapse.
Another factor that contributed to the banking crisis was the securitization of mortgages and other financial products by Wall Street firms. These firms would bundle the debt products into complicated securities and sell them to investors as low-risk investments. However, the underlying assets were often of poor quality and high risk, leading to huge losses for investors and financial institutions when the housing market crashed.
Furthermore, the crisis was exacerbated by the use of highly-leveraged financial instruments such as derivatives. Many banks took massive bets on housing prices and other investments using these instruments, often with little oversight or regulation. When the underlying assets lost value, financial institutions found themselves facing huge losses that they were unable to absorb, leading to bankruptcy and government bailouts.
The US government also played a role in the banking crisis, with policies that encouraged and incentivized risky lending practices. For example, the government established Fannie Mae and Freddie Mac, which guaranteed home loans for low-income borrowers, allowing banks to lend with less risk. Additionally, the Federal Reserve kept interest rates low, creating an environment where lenders could offer attractive deals to borrowers, further fueling the demand for housing and riskier financial products.
In response to the crisis, the US government and central bank took unprecedented actions to stabilize the financial system. The Troubled Asset Relief Program (TARP) provided $700 billion to banks and other financial institutions in order to prop up their balance sheets and prevent further failures. The Federal Reserve committed trillions of dollars in loans and other financial support to financial institutions, including purchasing massive amounts of securities to help stabilize the market.
The banking crisis of 2008 was a wake-up call for the financial industry, policymakers, and citizens alike. It highlighted the dangers of lax regulation, incentive-based risk-taking, and government policies that support risky practices, which can create an unstable financial system. While the US economy has largely recovered from the crisis, it is important to learn from past mistakes and take measures to prevent a similar crisis from happening again. Strong regulation, transparency, and a focus on long-term stability over short-term gain are key steps forward.
OMG… speechless
14:45 the assets are not worthless but definetly losing value…currency & bonds lose value with inflation and the usd is going to have big inflation.
The difference between money and CURRENCY are different. As soon as the US created a fiat currency, it was over. Fiat currency is worthless, it's a means of exchange. The FED "loans" money they print to the US at interest, quite a scam since there was NO money to begin with. The FED is a printing press, nothing more. All of this was designed to fail, the mistake was made when they allowed the 'federal reserve act', which was unconstitutional to start with, along with INCOME TAX.
I'm pretty sure that $4.4 mil share sale was under 10b5-1 plan which is yes, automated and pre-planned, because you create it in advance to sell your shares on established dates at market prices. It's a tool specifically designed for insiders to sell stock, as It doesn't allow any control over sale price or precise timing.
I wish someone can do a research on Venda Building Society (VBS) like this
Things aren’t looking good stock market, banking system and transportation industry , a number of the most eminent market experts have been expressing their views on the severity of the impending economic downturn and the extent to which equities might plummet. This is because the economy is heading towards a recession and inflation is persistently above the Federal Reserve's 2% target. As I'm aiming to create a portfolio worth no less than $850,000 before I turn 60, I would appreciate any advice on potential investments.
Who would benefit by killing off small tech companies
BS proportions, it fraud .
Your channel has made me lose all faith in the society.
Corruption it's just so blatant today, bigger then banks but countries .
Is this the Start of a new crisis, yes, first national is going in flames. bank of america won't run away from this flame
Was there a Credit Suisse video or was it my imagination?
Now do FRC First Republic Bank
I'm still perplexed how so many people still have confidence in the capitalist economy… These failures will be happening more and more often.
i believe the federal reserve know what he is doing, it just that some greedy dumb maron with some very very very huge gun in his face and head, he had no choice but keep printing away $$, and ignor the problems, thats the problem……….namo
Seems legit
(17:19) You should take a very close look at that list of companies. How many of them are in hot water with authorities because of their shady business practices. Like finds like as far as I'm concerned.
you mean private keys…
Thank ToGoGo…
Missing here is that when interest rates increase by 1%, fixed interest rate bonds loose 10% of their value. Please research, Please research, Please research. I'm already comfortably retired folks, don't care about your voting preferences.
Most of the guys here worried about how to save the banks than the PEOPLE !!! Wake up they help with billions banks and they don't have money to save people !!!!!!
The video discusses the 2008 US banking crisis, which was triggered by a collapse in the housing market and the subprime mortgage industry. The crisis resulted in the failure of several major financial institutions and had severe repercussions on the global economy.
The video highlights some of the contributing factors that led to the crisis, including lax lending standards, excessive risk-taking, and the securitization of subprime mortgages. It also points out the role played by credit rating agencies and regulatory failures in exacerbating the crisis.
As for advice, it is important for policymakers to learn from the mistakes of the past and implement measures to prevent a similar crisis from happening in the future. This includes strengthening regulations and oversight, promoting transparency and accountability, and addressing systemic risks in the financial sector. It is also crucial for financial institutions to prioritize responsible lending practices and risk management to avoid excessive risk-taking and protect themselves from future crises.
The bots are in the comments.
Show to modi ias ips
The government has really made things more difficult for its citizens and we can't sit back and bear all the consequences, we need to invest and gain financial freedom.
This shit scary but good I been watching these all night
In a nutshell, SVB was very exposed to Fed rate risk on both sides of the banking process. On the deposit side, they were heavily dependent on deposits from startups that were entirely a product of cheap credit due to low Fed rates. On the investment side, they were massively invested in old Treasury bonds whose value was somewhat inflated by low Fed rates. Once the Fed raised interest rates to fight inflation, this hammered both the security of SVB's deposits and the value of their investments. This led to a liquidity crisis, and an ill-timed announcement of needing a cash infusion caused a bank run.
Excellent, as always.
Its the end of Pax Americana.
I don't work in risk management, but even a 300 level Econ student knows, that when interest rates rise, the price of old bonds goes down. As you noted, there was a huge period of time when the Fed was dragging it's feet raising interest rates, and anyone with a lick of sense knew that inflation was real, and that they would have to eventually. The smart people at the banks that didn't fail dumped their positions while the dumping was good (or at least manageable). SVB didn't. It could be argued that they were more Keynesian than Austrian in their Economic Philosophy, and that had an impact on their decision to hold off, but we're getting into some pretty nerdy stuff there. At the end of the day, the writing on the wall was in blood red paint, and they ignored it.
If I was ever wealthy enough to have something to worry about more than a 250 fdic I'm putting some gold bars and stacks in my bunker. I'm not lucky enough at this point to think like that but I do make my own family's way and have never trusted anyone else handling my Mediocre salary. I have seen my hardworking better off parents lose a lot of $$ in 08
These bankers have a special place in hell
Did you actually say "yeeted from the board"? LOL
Silicon Valley Bank (SVB) was the 16th largest bank in the US, and it wasn't subject to the most strict controls. How many banks actually are subject to those controls, besides the big four? Any bank could suffer a run and fail, and if that happens to a community level or even state level bank it probably won't upset the national economy or ecosystem of banks, but any multi-state bank should be more closely watched.
Crypto currency will outsmart the banking system in the nearest future serving as a global fiat. Already making over 85% of my investment
I mean, we are talking about so much money that i do not have the wherewithal to know what i would do as a company in a situation like this. But i know this; that is what happens when your government deregulates any industry, especially the financial industry. I laugh when people say the USA is not as corrupt as other countries..i guess not when you change the wording of those means. We took a corrupt act and legalized it here in the US, its called "lobbying". Now bribery is legal and ok! Even better, when our banks DO fail, Its our tax dollars that saves those aholes!
Once again, banks and corporations lobbied for more "free market" and ended up jeopardizing the global economy. How many more times do we have to revisit the same story? Can we, at least, put this people in prision so they can at least be a vivid reminder that we shouldn't trust in CEO's "good" intentions?
i love this channel