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Financial advisor Lance Roberts and Wealthion host Adam Taggart discuss the surprise failure of Silicon Valley Bank, as well as everything else that mattered to markets this week.
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Bank Failure! Here’s What’s Happening & What Shockwaves May Result
As the economic impacts of the coronavirus pandemic continue to unfold, many experts are warning of potential bank failures. Lance Roberts and Adam Taggart, two financial experts, recently sat down to discuss what’s happening and what shockwaves may result.
One of the biggest concerns is the large number of small and medium-sized businesses that are struggling to stay afloat. These businesses are the lifeblood of many local economies and provide the bulk of new job growth. If they fail, it could trigger a domino effect that could lead to a banking crisis.
When businesses fail, they default on their loans, which can put pressure on banks’ balance sheets. If enough businesses default, it could lead to a liquidity crisis where banks don’t have enough cash on hand to meet the demand from depositors who want to withdraw their money.
Another concern is that many banks are heavily exposed to the oil and gas sector, which has been hit hard by the drop in demand caused by the pandemic. If more companies in this sector default, it could lead to a wave of bank failures.
Roberts notes that the Federal Reserve has been pumping massive amounts of liquidity into the markets in an attempt to prevent this from happening. However, this strategy has its own risks, as it could lead to inflation and a devaluation of the dollar.
Taggart believes that there are some steps that banks can take to mitigate these risks. For example, they could reassess the risk in their loan portfolios and adjust their lending practices accordingly. They could also diversify their holdings and reduce their exposure to sectors that are especially vulnerable.
In the meantime, it’s important for individuals to be aware of the risks and take steps to protect their money. This includes keeping a close eye on their bank’s financial health, diversifying their savings across multiple institutions, and considering alternative investments like gold or cryptocurrencies.
Overall, the potential for bank failures is a serious concern in these uncertain times. However, there are steps that can be taken to reduce the risk and protect yourself from the fallout. Stay informed and be vigilant, and you’ll be better prepared to weather whatever comes next.
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Someone is approaching commenters in your videos and other youtube videos to contact them on what's app, a CCP app, and I have heard from other yt presenters that those are scams. You may want to warn your viewers.
If banks don't have enough capital to cover deposits they're insolvent. SVB sounds like Ponzi's bank.
In these crazy times, Adam and Lance are the voices of sanity and reason.
Thank you Gentlemen!!
Lance is no longer homeless, good work!
love Lance as a guest, but his over trading is why he often underperforms the market; he trades like a kid on red bull
Inflation is going up, so bonds are a loser
So much baloney is in the media to cover for the ultrarich owners of the banks! If you own a restaurant or supermarket or florist or parts manufacturer or any other not-politically-connected business company, and you make a bad decision, you are out of luck and you lose all that you invested. That is what happens to the poorer 99% of Americans' little businesses.
However, in order to preserve the ultrarich's ownership of the banks, the government is being duped AGAIN (AS IN 2008, WHEN IT WAS CLAIMED THAT THE ECONOMY WOULD COLLAPSE AFTER THE COLLAPSE OF LEHMAN BROTHERS IF THE BANKSTERS WERE NOT ALLOWED TO REMAIN IN CONTROL OF THEIR INSOLVENT BANKS) to give free money to their banks to enable the same owners to remain in control — the owners who drove the banks into insolvency in 2008 and AGAIN now in 2023. They are AGAIN blinding US politicians with financial gooblygook which they specialize in as a way to confuse them and obfuscate the issues. (Owners of legitimate companies lose all ownership interest in those companies when the companies go into Chapter 11 bankruptcy and the companies' creditors become the new owners, OR the companies are dissolved, and the owners get $0, when the companies become insolvent.)
Most banks are now insolvent, because they avariciously, foolishly gamble to maximize the profits that they can suck out of banks: they only put in a TINY, or ZERO cushion of capital, which is all that banks have been required to keep, while they hold over $20 TRILLION of depositors' funds. See "Silicon Valley Bank Collapse Suggests 0% Reserve Requirement Won’t Halt Bank Runs" in Forbes. That means that even a 2% decrease in the value of their assets will wipe out the equity of most banks and render them legally insolvent. In other words, their "assets" are mostly their depositors: they may have 2% equity on $100,000,000 in total assets, so $2,000,000 would be theirs and $98,000,000 would be their customers' deposits and subject to their depositors' claims; thus, if the $100,000,000 goes down to even $97,999,999, they are LEGALLY INSOLVENT. (Liquidity is a different issue; even if legally insolvent, if given money by their privately owned but deceptively named to confuse taxpayers, "FEDERAL" Reserve, they can pay their bills like a drug addict just loaned money by his parents may be broke and have huge credit card debts, except for that parents' cash which he can use to pay for food by not paying his credit card bills.)
See "Fed considers stricter capital requirements for midsize banks" in banking dive. See the politically incorrect Washington times “Lawmakers grilled Fed chair about plan to raise bank capital rules just before SVB collapse.” As an example of their gooblygook try to read: "A Brief History of Bank Capital Requirements in the United States" in clevelandfed org. To save you the trouble, let me just tell you that the authorities and the banksters’ “Fed” have not required that banks keep enough capital or even readily saleable assets for YEARS. The Republicrooks (who are the pawns, hos, and agents of the ultrarich have opposed any bank reform, except for the fake “Dodd-Frank” reform, which protected the banksters by providing for depositor bail-ins as political poison pills to force the government to bail the banksters out when their banks failed in the future) have all strongly opposed any capital increases: like the W H O’s hos they will do anything for the Benjamins.
Thus, right now, those who understand math know that a treasury, bond, or loan that pays $5,000, when interest rates are 5% per year is valued at $100,000 (ignoring risk, which would increase the required interest demanded by prospective purchasers.) However, if that treasury, bond, or loan pays only $2,500 or 2.5% of its face value, even if it might pay $100,000 in twenty years, has its value reduced by annual 10% inflation to only $50,000 plus the present value of the face amount to be paid in 20 years of $12,158 assuming zero risk. Remember: the $100,000 face value will be sharply reduced as inflation eats away its value, so $100,000 reduced by 10% (for example) to be paid in 20 years would have a real value in present terms of that amount with a 10% reduction each year of the remaining amount. After the first year, the face amount would be reduced in real value to $90,000 by that inflation. After the second, to $81,000; after the third, to $72,900, and so on. You could easily calculate that for 20 years by repeatedly multiplying $100,000 by .9 twenty times: $12,158.
"I'm not bearish or bullish, ever, I am what it is"
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 portfoliio, what’s the best way to take advantage of this bear market?
When people understand being indebted is the equivalent to be a slave ,
because u are toward the person/institution that owned your debt ,
a lot of thing will change to the better by itself …..
Unless obv. People love being slaved upon !
Thanks I got it , how it started / fed = how high cost of living can go in USA compared to other countries ?
Correct Adam “The RIGHT people should take the losses”!!!
What about SVP using the "hold to maturity" feature for their long-term bonds which exacerbated their bond price profitability which should not have been exposed but was because of the lack of risk management.
Bitcoin was the safer route this whole time.
NOW SHOULD BE THE BEST TIME TO BUY AND TO TRADE ON CRYPTOCURRENCY, BECAUSE CURRENTLY THE PROFITS ARE VERY GOOD AND GOING UP TO A STANDARD RATE IN LESS THAN NO TIME.
Short-sellers make $600m in one day on Silicon Valley Bank crisis – FINANCIAL NEWS
I hope inflation skyrockets and wages increase so myself like millions of other will finally get out of debt soon.
The fed has never cared about regional banks unless they are big ones. They prefer small ones fail and larger ones swallow them up.
SVB crashing hasn't made anything better. I feel sad that even though I am investing, I don't have the brain power to dig through how each company is doing, is this a good time to buy stocks or not, my reserve of $450K is laying waste to inflation and I don't know what to do at this point tbh, I need solid data on market trajectory
You seem so smart. But you say anyways. WTF…? It's Anyway
Fractional reserve banking is a CRIME. You simply shouldn't be allowed to lend what you do NOT own. Equally, you shouldn't attach interest to the loan! How is this not criminal behavior!?
It is a government inspired crisis this time. The Treasury have to sell Bonds to cover the trade imbalance and the government spending imbalance. In order to sell them they have to raise interest rates and the old long-term, low risk, low interest, AAA investments (including Treasury Bonds), held by the banks (often due to government regulatory policy), become next to worthless. The next milestone is the 15th when the government issue a new batch of Bonds. I have approximately $350k stagnant in my port_folio that needs growth. What is the best way to take advantage of this downturn?
You work for 40yrs to have $1m in your retirement, Meanwhile some people are putting just $10k in a meme coin for just few months and now they are multimillionaires.I pray that anyone who reads this will be successful in life
Thanks guys
So the answer to the Banking ills from the Government is we will backstop the industry to infinity? What is that going to do to the value of the USD? To Inflation? To market stability? If I own a bank and I don't have to worry about the security of my depositors, will I not be even more reckless? This sounds like a madhouse to me.
The sound is bad!
Please fix this!
20% is appropriate when wages to home prices come back in line. Or the governments could open up more land for development and cut the red tape for developers.
Just another orchestrated event.
This is one of the reasons I stopped participating in the Color of Law and Fiction of Law schemes of the men and women of the legalese banking society over a decade ago. There is a way to live without being a slave to the system. I have not had ID since 2009. I stopped using everything else in 2013. I had quite an intense experience in the beginning. Now I live a magical life in a slightly different realm. Using fiat currency, working for decades for the illusion of money, loans, bills, etc is just perpetuating the illusions the deceivers have created. I hope the system does crash and that many choose not to fall for the digital currency scheme and choose to create a new way of being. Like Buckminster Fuller advised, what you resist, persists and multiplies. Instead of complaining about, blaming and fighting a system from the age that is ending, perhaps co-create something new in the Aquarian age. Our Mother Earth freely provides all we need to thrive. We placed imaginary values on her resources, our labor and talents and the service to self types created an illusionary realm wherein we all were programmed to believe we have to pay to live here. Come out of her, my people. Babyloonia is falling. As soon as the masses stop participating in the old schemes and co-creating free share communities wherein all thrive, the nashing of teeth will be heard. Wakey Wakey
Love your channel! Keep it up
Lance , I think many of the tech company start ups that are dependent on that venture capital are being told by their VC's starting as fair back as early last year to conserve cash until mid 2025. I am sure many did not heed that advise and those companies will have a hard time staying solvent during this coming recession and rate hikes as that puts continued pressure on equity markets.
"the markets are taking this (bank failures) well" seriously what a bunch of crap
Ok guys – on student loans. I am really disappointed at your people going to cabo on student loans. The problem as I see it is two fold – School prices are ridiculous, and loan rates are ridiculous. Yes you have to be sure people aren't cheating, but until you deal with those two issues this situation will continue to suck. The price tag for school is nuts. At a state school – I Can expect to pay 35K per year per kid in Colorado. That is insane. Universities have not evolved at all in their approach and have no motivation to do so. They have bloated staff, hugely expensive sports programs, and just as expensive building programs. They force kids to live on campus for at least a year to maintain their dorms, they require attendance in person for most classes so that can justify facilities, and the have lavish building projects like lazy river pools indoor rock climbing walls and entertainment venues. Idea!!! Instead of the usual – make it free or do nothing choice offered by the political parties, lets do something logical and numbers driven: 1) Forensic Cost Accounting of all public universities to identify what is driving the cost and REALLY understand the cost of sports programs and fancy facilities, 2) stop requiring kids to attend all classes in person (didn't COVID teach us this is unnecessary), 3) stop requiring on campus housing for first years (shut down some of the damn dorms!), 4) eliminate lazy river pools and similar window dressing, 5) severely prune back sports programs (we have the NFL – why do we need professional college football?), 6) align 4 year degree programs with community college so that students can really do the first two years of any program at community college, 6) Reduce Student Loan interest rates (I have parent plus loans ranging from 9% to 12%. This is USURY.). Lastly, I am a veteran – retired USAF with 26 years. I have no Vets benefits to help with my kids because they change the programs every so often and my year group got shafter, How about giving all veterans a loan rate of 5% for themselves and children. (lower is better – but I would cheer at 5%). At a minimum – how about every state offers a no frills school that focuses on academics and enacts some of the ideas above. I am confident we could cut the cost of attendance at least in half.
Sure. Blame SBVs failure on crypto. Yet, while the fiat system crumbles Crypto is soaring.
Gotta hire Víctor as a stock picker!
11 min
Very important!!!!
Fractional reserve banking is a form of scam