★ SEEKING ALPHA - News & Analysis (50% OFF) ★ ▶︎ TIMESTAMPS INTRO 0:00 SVB COLLAPSE EXPLAINED 1:12 POTENTIAL CONTAGION 5:26 GOVERNMENT BAILOUT 7:26 MORE BANKS FAIL 9:09 In 2008, the world experienced the worst financial crisis on record, with people losing confidence in the banking system and the institutions who held their money And in the end a $700 Billion government bailout was needed to prevent a complete collapse of the financial system The GFC was described as a once in a century event and likely the worst recession for decades So why, just 15 years later, are we seeing banks start to fail again? Is this the start of another financial crisis? Over the weekend, the US experienced its second largest banking failure in history With Silicon Valley Bank, the 16th largest US bank, collapsing over just 48 hours So With over 95% of it’s customer deposits uninsured Bill Ackman, and other prominent investors were concerned that there could be significant contagion to other banks and business sectors in the economy This story is evolving quickly, including the government bailout announced just a few hours ago so rather than sit here and speculate on what will happen I’m going to share the facts of the situation and the different possible outcomes given what we know so far =========== STOCK ANALYSIS SPREADSHEET ▶︎ ------- STOCK ANALYSIS CHECKLIST ▶︎ ------- SHARESIGHT - Track Your Portfolio (4 Months FREE) ▶︎ ------- SEEKING ALPHA - News & Analysis (50% OFF) ▶︎ ------- TIKR - Financial Data (save 25%) ▶︎ ------- YOUNG INVESTORS PODCAST ▶︎ Apple Music ▶︎ Spotify ▶︎ YouTube ------- ★PRIVATE INVESTOR COMMUNITY★ ▶︎ ------- MY YOUTUBE GEAR ▶︎ ------- FOLLOW ME ON TWITTER ▶︎ BUSINESS ENQUIRES ▶︎ hamish@hamishhodder.com ------- Disclaimer: The information in this video is general information only and should not be taken as constituting professional advice from Hamish Hodder. Hamish Hodder is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Hamish Hodder is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this video....(read more)
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The banking sector is a critical part of a country's economy. It is responsible for managing the money supply, facilitating transactions and providing loans for investment and consumption. However, the 2008 financial crisis highlighted the underlying risks of the banking sector, as many banks failed, leading to a widespread economic collapse. Nearly a decade later, there is growing concern about another banking failure that could trigger a financial crisis. This time it revolves around the collapse of Silicon Valley Bank (SVB). SVB is one of the largest financial institutions in the US, with over $250 billion in assets. However, it is a bank that deals primarily with tech startups, with many of its loans being made to companies that are unprofitable and burning through cash. The bank's business model is based on investing in companies that it believes will eventually become profitable, but this approach is not without risks. In recent years, many of the companies that SVB invested in have failed, and the bank has been left with a growing pile of bad loans. If SVB were to fail, it could have a domino effect on the banking sector. First, SVB's borrowers would default on their loans, which would cause the bank to suffer significant losses. These losses would then spread to other banks that have invested in SVB's loans, leading to a systemic crisis. The Federal Reserve recognizes the potential risks associated with an SVB collapse and has already issued billions of dollars in loans to the bank to prevent this from happening. However, this approach has been criticized by some economists, who point out that it can be risky to bail out failing banks. Furthermore, the issue with Silicon Valley Bank is not just a US problem as it deals with start-ups around the world. If a bank, regardless of country, is too dependent on a single sector, it is inherently vulnerable to sector-specific shocks or downturns. Some experts have argued that the global start-up ecosystem could be heading for a massive downturn, which would cause further problems for SVB and other tech-oriented banks. Many startups have enjoyed significant funding rounds in recent years, but many of these companies have little to no profitability, which makes them a risky bet for banks. In conclusion, the collapse of Silicon Valley Bank could be the catalyst for another financial crisis, as it has the potential to spread throughout the banking sector. It is important for banks to diversify their portfolios and avoid being too reliant on any one sector. Furthermore, the Federal Reserve needs to be careful about how it deals with failing banks, as bailing them out can create moral hazard and incentivize risky behavior. Ultimately, the banking sector needs to be scrutinized closely to prevent another financial crisis. https://inflationprotection.org/potential-financial-crisis-triggered-by-svb-collapse-and-fed-bailout-in-banking-industry/?feed_id=89657&_unique_id=64412a1957600 #Inflation #Retirement #GoldIRA #Wealth #Investing #2008 #bankbailout #bankrun #bankingfailure #bankingsystem #bankruptcy #BillAckman #contagion #economiccollapse #fdic #financialcrisis #financialsystem #GFC #liquiditycrisis #liquiditycrunch #michaelburry #raydalio #SignatureBank #siliconvalleybank #silvergate #svb #BankFailures #2008 #bankbailout #bankrun #bankingfailure #bankingsystem #bankruptcy #BillAckman #contagion #economiccollapse #fdic #financialcrisis #financialsystem #GFC #liquiditycrisis #liquiditycrunch #michaelburry #raydalio #SignatureBank #siliconvalleybank #silvergate #svb
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