I thought this bank failure was an isolated event. You care to elaborate? Also, please pin this comment so we can see replies at the top of the comment section.

@@MrSupernova111 whoops, thought it was pinned, my bad. Signature was another crypto-focused bank, so it’s been facing the same pressures as Silvergate (a run on crypto exchanges = a run on their deposits). I’m not aware of another big regional crypto-focused bank, but this is still to a large degree a sector-dependant issue, and larger banks with sector diversity are unlikely to face similar pressure. With how quickly things developed, however, it’s impossible to predict what will happen from here.

@@ThePlainBagel . I think you owe it to your subscribers to talk about the underlying issues causing these bank failures: higher interest rates. Many depositors are withdrawing money to invest in CDs and treasurys while the cost of capital for bank rises. In the meantime, the Fed plans to continue raising rates and HTM holdings in balance sheets continue to depreciate. This is a systemic issue. SVB and SBNY are only the first affected (the weakest links out of the bunch). The US government felt the problem was severe enough to bail out these regional banks and find funding to bail out future banks. I'm not asking for predictions. Just a complete and honest picture.

@@ThePlainBagel, I don't see how this can _not_ have spillover into the rest of the banking system. It's not like the crypto banks exist in a vacuum, is it? Sooner or later it's going to hit other banks, no? I'm surely no expert on the global banking system or even knowledgeable but it just seems inevitable that it won't be isolated. How many average people have now heard this story? How many of them are going to head to the bank in the morning and withdraw most of their money? If this does spread do you really think the FDIC is going to be able to cover every depositor in even a single nationwide bank? It seems highly unlikely.

@@MrSupernova111 I think you should watch the video again. Richard mentioned interest rates and treasury bonds around 4:20 in the video. I would hope anyone explaining this current issue at this time (banking crisis???) would do so with a level head - even if they THOUGHT this was a systemic issue - would advise against bank runs. After all, the companies did have the money. It was only the panic withdrawals that made the banks no longer liquid. These banks should have been paying attention to their treasury bonds when interest rates went up. I totally agree that this might be a systemic issue. However, if the general public keeps a level head there's no reason to suggest any legit regional bank is at risk. With nearly all being FDIC insured, most of the public will be totally fine even if one of these banks falls. SVB is an outlier in many respects obviously due to its region.

It's all fun and games until you're forced to clean up after the bull in the China shop.

Wondering if they've figured out what's wrong with their favorite buzzword: disruption. I doubt it, I live here with VC idiots, and it's interesting watching their own psychology problem trip them up like this. I think it just speaks to how anxious and terrified they are.

*SVB

@@reformedchaterCorrect. Apparently SBF still haunts me

@@MissMaserati Well the financial system has truly been disrupted now

Doesn't help that the two failed banks and the third failing one have very similar names.

Treu

For Real. It hapened sooo fast.

@Willie Jonathan scammer Alert

​@williejonathan9222oh my! How can I pay you to teach me...🤡

I believe SVB was making an effort to reorganize their bond portfolio. Yes, they would lose money if they sold their low-yielding bonds. But, they were trying to make up for it by repurchasing bonds on the open market at the higher interest rate.

@thelastunicorn1987 I've been able to scale from $50K to $189k in this red season because my Financial Advisor figured out Defensive strategies which help portfolios be less vulnerable to market downturns.

@@louisairvin3052 've been looking into the potential of speaking with consultants lately. I require direction because I am an adult, but I wonder how really beneficial their services might be.

@@Curbalnk Finding financial advisors like KAITLIN ROSE STERNBERG who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.

@@louisairvin3052 Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.

YUP. I got sick of combing through click bait “shocked face” thumbnails. So fake and off putting. This was a breath of fresh air.

Perhaps, you shouldn't be such aloser who clicks on everything in sight. Blaming 'KZfaq profitability algorithms' is just a fancy way of calling yourself amoron.

Agreed, but SBVs clients were businesses, and SBV also offered competitive rates to their commercial depositors, otherwise those businesses would have transferred their deposits elsewhere. This gave SBV a further problem, needing to sell off assets and borrow in order to keep funding the attractive rates they were paying their depositors..... For my part, this mainly sits with directors and risk managers of SBV, but also the risk managers of the depositors and investors.

wow you just caught on TOO BIG TO FAIL. remember 2008? they passed laws to stop this from happening again. and trump cancelling some of them laws, and why is it happening again. when laws are changed back to the good old ways.

I don't think it 'controls' the sector. Even though it serves half of the companies in it, one company can have more than one banks.

VCs created & tolerated this risk

Having an institution that can print and decide interest rates for the short term is too 😬

Dude has a real job so he's not dependent upon clicks. If anything it incentivizes him not be a click bait farmer because this very public content reflects on his ability to do his real job. YT is a poison pill and he knows it.

He actually IS a real professional, working as an analyst for an investment management company in Ottawa.

Was just about to write the same thing until I saw your comment

Try Patrick Boyle as well

A true legend

It's a bit like the movie Margin Call, where the CEO character is alerted to the massive exposure and says we have 3 ways to win on a deal: be first, be smarter, or cheat. He says I don't cheat, but we can be first. Sell everything. He who panics first, panics best, in this case. FDIC insurance is really meant for individuals, not businesses, so most of the customers will be facing serious losses. Fun fact: there is probably only 3% cash floating around for all of the bank deposits there are. So if things get weird, you have to end up being in the first 3% to demand money to get the full amount.

Essentially the bank didn't shut it self down, the government swooped in and try to contain it because it had no confidence that svb is going to have enough in it to cover the hole created by selling the treasure bond confirming their losses, if banks are allowed to hold the line like Michael B they would in this case, but that's not legal for banks. Who's to blame? Rising inflation, so yeah Joe Biden and the left wing in house sponsoring someone else's war in the 3 digital billions, but no plan for inflation.

This is definitely not a natural decline, it is manufactured. Whoever manufactured it is the benefactor.

@@500dollarjapanesetoaster8 i think the 3% cash flow number is like 10 years old or more. i doubt we have even 1% in cash, rather go into the 0,1% region

@@Downphoenix sounds archaix

Patrick? Or Richard?

A fellow all in Fan!! Here's an upboat 👍😁

Surely there are protections in place to get these employees paid. This is insane!! Wild times we are living through.

What % of startups fail? Isn't it like 90% why do we have to bail them out too...

Ben Felix, please *Fingers crossed

I was literally eating a bagel when I saw this video pop up on my feed.

Wall Street Millennial's video goes into the financials far more in depth as well.

l000l patrick boyle the dude who makes over 100k a year off youtube but still begs for peatron lol that guys a scammer.

it wasnt people doing bank runs tho...thats not why this is happening...bank runs are a symptom of the problem... the problem is greed and hubris....all the ceos took their money out weeks before this so its not the bank runs doing this...thats the narrative of the far left....reality shows otherwise we had this problem in 1929 and it surprises me nobody talks about 1929 right now...they only bring up 08 which wasnt that far back...this is more akin to 29 than 08 were going to see bread lines and soup lines... if you look at the bank sell off its all 60 70 80 in the red..monday wil be a dark dark blood bath of sell offs...its going to be nasty af...

Absolutely. I wonder what their risk management was doing ALL THROUGH 2022, were they on holiday. The central banks actually reacted pretty slow first, to the inflation. If you held bonds, you could see this coming from a mile away. They could have hedged or diversified. And shifted to more class A liquidity assets, as they were already losing lots of deposits during 2022 as the balance sheet in the video showed. Running out of cash and class a in a bank run is no shame, but not preparing, is. But I guess, hedging, diversifying, restructuring the portfolio costs money and takes the cherry off the top of your profitability and off your bonuses too. So you just go on, drive it into the ground and scramble to get your bonus, hours before getting shut down. Perfectly executed. A beautiful lecture in American Manager Capitalism.

@@catriona_drummond No doubt that SVB's top execs dropped the ball on risk management. The top execs ignored warnings from employees to buy shorter term bonds, and instead doubled-down on high yielding assets. And SVB's CEO, Greg Becker, lobbied Congress back in 2018 to exempt banks like his from Dodd-Frank regulations, saying: “Without such changes, SVB likely will need to divert significant resources from providing financing to job-creating companies in the innovation economy to complying with enhanced prudential standards and other requirements...Given the low risk profile of our activities and business model, such a result would stifle our ability to provide credit to our clients without any meaningful corresponding reduction in risk.”

Let this be a lesson that these "people" aren't financial geniuses. They just got to their position by bribes, nepotism, and connections. And then virtue signal about how smart they are for pulling their own bootstraps while the rest of us work.

​@Catriona I am guessing they were just way too specialized, and their whole business model is specialization. It's too hard for them to specialize. So the fact that they failed can be argued as simply capitalism at work.

Not necessary the duration. They could have done enough receive float to keep the book short, but still won’t stop deposit running off. Liquidity issue, given concentrated customer base. Things went wrong 3 years ago when surge deposit coming in, and they decided to invest in bond market.

Watch Monday and the ides of March.

Weird how both of them can be labeled ""SVB".

Paul, thanks!

OVER 586 BANKS CLOSED IN THE USA THIS YEAR. NOW THIS. AND BANK OF AMERICA AND WELLS FARGO. PEOPLE ARE SHOWING EMPTY ACCOUNTS. DIRECT DEPOSIT FOF PAYDAY. ACCOUNTS STILL EMPTY!!! WHILE THEY SEND HUNDREADS OF BILLIONS TO UKRAINES MILITARY, THAT DOES NOT HAVE ONE. ALL OUR MILITARY AMMO. WEAPONS. TO ???? AND ITS NOT IN THE MILITARY HANDS OF USA. AND THIS CH. IS SAYING WE ARE OK!!! OMG. REALLY??!!! WILL NOT BE BACK TO THIS CH. VERY BAD INFO

First republic bank is next good luck guys

LOL! No, that was nothing. This is going to be even more spectacular.

More like a civilizational collapse. Soon we all be driving muscle cars and wearing cool leather suits.

They all start the same, because nobody is ever held responsible. It makes no sense for them to follow the law, cause that makes them less money and they are always bailed out anyway. In 12 years we will be saying the same thing, and so many people will be completely stunned that it happened.

​@Studeb What? These banks are taken over by the FDIC, and all their assets are sold off to pay back their customers. The stockholders lose all their money, and all employees lose their jobs. I get that this system isn't perfect, but the CEO and stockholders are NOT getting a handout from the government.

thats pretty dramatic lol. especially for an event we'll likely forget about in a week

If you think this is limited to niche techy startups which seems to be the prevailing narrative that is being put out there regarding this, you will have a major surprise very soon ;)

@Vincent Wisehoon but the diminishing returns for tech started way before this bear market. Those startups getting a ton of money at the beginning was due to easy money fiscal policy more than tech still having a lot to offer. People and investors had more money than they knew what to do with, so they invested it all in the idea of the next big thing. Rinse and repeat. Spigot gets turned off, the industry that naturally got the most speculative money also is the first to have it pulled. Straightforward

@Vincent Wisehoon I'm talking about people seeing too big to fail banks experiencing bank runs. This is not some tech bubble backlash more than it is actually the final death throes of fractional reserve banking. Do you seriously think that SVB's monetary management was any more risky than say Bank of America, or (insert any big name American bank here)? They're all over leveraged, and trying to use the same tricks to be able to keep paying their creditors, except with the rate hikes, it's all finally coming to a head. This is not about big tech. This is a banking issue. Last time I checked, there's no difference between Warren Buffett depositing 500 million in a bank or some startup. People make it sound as if having banking clients that are silicon valley "startups" suddenly makes the banking model riskier. That's completely false, same old bank takes your deposits then loans that out and borrows against it.

@@spechund7109 tech in general is screwed. Companies, in a true capitalist soceity, cannot exist without making money. Sillicon valley is a system that needs to rot and die. I feel TERRIBLE for the working class who pray that a system built off lies can sustain them, and wish we had enough blue collar jobs, and other non-tech jobs they had skills in to collect each and every one of them and provide a living for them. Though sadily we've become too married to profitless shells of companies which are basiclally a bunch of collage kids going "wouldn't it be cool if we stuck everyones brains into a headset and called it VR. Shit will never be profitable, but damn it would be cool." they hype it up to a bunch of VC firms they go "huh that could posisbly work, here's some cash" and all these people get hired while the initial founder "makes their exit" as soon as someone like facebook buys it up and goes "ok look, we know we haven't turned a profit in the entire lifespan of the newest generation BUUUUUUUT this time it's legit. I hope the scammers at the top burn, I hope the working class (this includes white collar people who are at say 80k a year with kids and aren't actively involved in the scam) can find all of the success in another field. But my nihilist side knws it will be more of the same. The tax payers getting fucked, the workers getting fired, and no one seeing a DAY inside a non-gucci jail for their crimes. gotta love oligarchies

So it had nothing to do with crypto?

Why would you be an idiot if you earned money 🤷🏻‍♂️

@@moccamixer cuz they felt like they could've earned more had they sold at 200

@@moccamixer🤦‍♂️ not to good with human thoughts and feelings huh

GG WP

Celebrate getting out when you did, that was wise. Hype is a very dangerous thing to believe in!

SVB probably brought bonds of these risky startups and loaned them money to pay back the bonds. These startups are not profitable and revenue drying up, they are going back to SVB for more cash or loans/bonds. This create a vicious cycle of borrower/lender sell off. Top management of SVB knew this months ago and tried to use the worthless bonds or notes as collateral. No other banks want a piece of these junk loans or bonds. The Fed is trying to get rid of their own junk bonds. This is just part of the zombie companies going BK due to very low rates the past 10 years.

Billions of dollars isn’t worth sensationalizing, that’s for trillions.

it wasnt people doing bank runs tho...thats not why this is happening...bank runs are a symptom of the problem... the problem is greed and hubris....all the ceos took their money out weeks before this so its not the bank runs doing this...thats the narrative of the far left....reality shows otherwise we had this problem in 1929 and it surprises me nobody talks about 1929 right now...they only bring up 08 which wasnt that far back...this is more akin to 29 than 08 were going to see bread lines and soup lines... if you look at the bank sell off its all 60 70 80 in the red..monday wil be a dark dark blood bath of sell offs...its going to be nasty af...!!!!

I recommend the Financial Times or the Wall Street Journal unless, of course, you mean that you want to be hand fed information instead of seeking it on your own.

​@@MrSupernova111 Why the insult? I just said I appreciate the explanation

Literally just subbed to the channel for this reason.

US bank run start now!! Withdraw yr money and invest in house and property is the safest invest.

They had to meet those DEI quotas. 🙄

You should be asking how many people will be fired because their firms lost most of their cash held at SVB. Many of those firms won't be able to make payroll. But I supposed you don't care about that.

normal people would need to show up in numbers of roughly the population of Rhode Island as a whole to make a difference.

@@MrSupernova111 No, you dont get it. This NEEDS to happen. People need to learn that banks are NOT to big to fail, and they should be FAR more scrutinous with who they park their money with, how exposed they are, and what risks they carry. Its about damn time people stop treating capitalism and the stock exchange like its the goddamn casino.

Eye watering amount no doubt.

​@@Seneric 2008 should have taught people that, any crash will be promptly forgotten as soon as someone finds a way to make money in a dodgy way again

The people trying to calm things down by saying more bank fails are unlikely are the same ones that said SVB was OK not too long ago. Clown Crammer from CNBC just weeks ago emphatically stated SVB was not a risk.....he also said the same of Bears Stearns just days before it folded....when will Crammer get sued to the poor house and prevented from ruining people's lives?

it wasnt people doing bank runs tho...thats not why this is happening...bank runs are a symptom of the problem... the problem is greed and hubris....all the ceos took their money out weeks before this so its not the bank runs doing this...thats the narrative of the far left....reality shows otherwise we had this problem in 1929 and it surprises me nobody talks about 1929 right now...they only bring up 08 which wasnt that far back...this is more akin to 29 than 08 were going to see bread lines and soup lines... if you look at the bank sell off its all 60 70 80 in the red..monday wil be a dark dark blood bath of sell offs...its going to be nasty af.........

Also Patrick Boyle - top quality nonsensational financial knowledge spiced with Patrick's driest of dry top quality humor!

@@piuthemagicman both are great! :)

I think not. He's juwish. They're not exactly famous for trustworthyness. He also blamed the failiure of a bank on people collecting their money back. And not on embezzlement and gambling away deposits as if the bank is a ponzi.

I will try and invest in stocks and crypto.

Success depend on the action or step you take to achieve it. Show me a man who has no investments I will tell you how soon he will go broke. Investment is building a safe Heaven for the future....

To earn more you need to have multiple diversified means of income so investing is a way to earn more money once it is profitable...

If you find a way multiply your money one day you’ll wake up and realize that the money you thought you had is gone .investment is the key!!!

@@johnnymaxwell8284 I agree with you friend investing is the key to maintaining your financial longevity and not just investment , but an investment with guaranteed profitability..

There is a huge misallocation of capital in the system just like '08 in housing, I just don't think we know where it's going to blow yet.

@@cursethesemetalhansthis is definitely a different situation the op is right worrying because it’s fun to do is the current trend

@@cursethesemetalhans And in 2008, everyone seems to forget that banks giving mortgages to ppl that couldn’t pay, KNOWING they were going to default, then bundled the bad loans and sold them to unknowing institutions. It was a scam from criminal lenders from the beginning.

@@cursethesemetalhans replacement of fiat ...

I feel the average person has no real clue on what is going on, or what went on. They just see news clips and take it as the gospel, instead of actually reading about why. Things are more knee jerk than ever, and that's really not helpful.

It is a very funny argument from investment bankers that when they "earn" money, they need bonuses. And when they perform "above average" on shrinking market, they need bonuses. And when they screw up "it makes a barely noticeable difference". I mean, to some extend, you need risk diversification and risk diversification naturally means taking on risks, but... how can investment bankers "earn" an above average salary, then bonuses on top and then claim "responsibility" while at the same time claiming "market forces" being in control of every down turn (ignoring the very fact that collectively, "investment bankers" are "the market forces")?

@@sarowie because people are biased and don't want to attribute their success to luck.

@@sarowie It doesn’t sound like you know what investment bankers do lol

@@sarowie As far as I know, investment bankers just get laid off when they screw up.

SVB was “not large enough to fail”. Back during the previous financial crisis, the USA bailed out numbers us banks which would have failed. So, historically, SVB is one of the “largest” banks that failed, but it could have been bailed out like other banks. SVB has been taken over by FDIC, and *deposits* are still insured.

@@advancetotabletop5328 well yes and no up to 250.000 is but since it’s mostly for businesses they will have a lot more then 250.000

I think they looked at the industries of their clients and thought that was diversified. That they were almost all tied to the start-up VC ecosystem never crossed their minds.

Yes but all our banks (except perhaps Barclays) are still technically bankrupt, but are all fortunately backed by HM Government and our money tree, so none will be allowed to ask for receivership.

@@drpeterc12 the Magic Money Tree thank you!

The BBC is reporting that the UK Gov is working out a plan to bail out the UK companies affected... it doesn't mention bailing out the bank though.

US bank run start now!! Withdraw yr money and invest in house and property is the safest invest.

@@drpeterc12 The Financial Services and Markets Bill started in the HoC and now at the Committee Stage in the HoL is worth a look. HM Government has never been tested, to date, in compensating individual personal deposits to the current amount of £85,000. Let's hope you are right that sufficient funds are directed to such individuals who do not hold private banking accounts whom, I'm sure would be first in the queue to be protected.

"Comming" lol.

Yeah, people forget that 2008 started with Bear Stearns and other niche institutions. While it could stay contained, because of credit tightening overall I'd be surprised if it did. We'll see in the Fall.

@@slofty Yeah. Did not use spell check.

In my experience, financial advisors are undereducated fools who are programmed to sell products. The tragedy is that their superiors in the C Suite aren't much better.

@@yuglesstube This is true to a point. I am a specialist in robotics and automation. It takes all I got to keep up. Knowing various financial instruments is beyond my skills and I need to get advise where I can. But, you are correct except I know less.

So then it can't be called fractional reserve if there is now no reserve...

@@snowblind. 0/1 is a fraction

This conflates two concepts (reserves vs insurance) and misses an important piece of context. The Reserve also went to an "abundant reserve" model while also requiring the banks to "show their work" on the loans. There is fragility, as there will be in a highly developed financial system, but you are choosing fear rather than understanding.

@@onothankyou We understand that a bank will have a natural tendency to loan out a larger ratio of deposits, if allowed, in order to make more money, as they are a for profit business. It would be naïve to trust lenders to act in good faith always if you look at history, especially GFC (The "show your work" and "Oh please act in good faith" is worthless unless regular audits are expected and penalties are severe). FDIC insurance exists but doesn't not protect >$250k in deposits meaning they are exposed. We are seeing massive transfers (Large account holders) to the big banks as we speak, "just in case", which is a bank run of some magnitude. Will it get bad enough to implode? Probably not as the Fed and Gov will always step in to save their own

@@runescapefan0001 Simplified to 0.

You made me check and so I subbed! Thanks for the reminder comment

True words

I deal my pipes with chips.

I caught that one as well... quite the pet peeve of mine. Also, silicon is an element. I think the only one that irks me more is "duel-core", though at least now that multi-core CPU's are the mainstream that's become less frequent.

It was bothering me too

@@markc1682 it’s not that hard

This is the second go around for a lot of us watching this happen to tech.

Yup, not the first time, it'll bounce bank in time. Just part of life.

Yeah I got it right the first time, and messed up later on in the video. In my defence, I filmed late last night after a day of working 😅

Allocating (not having all your eggs in one basket) is the lesson learn here

@@zegur21 the lesson is clearly to never trust fractional reserve banking. When banks fail, people are free

This wasn’t a traditional bank. Most are far above the fdic limits.

@@morcap Complete fearmongering nonsense... "All the banks" aren't involved in crypto, and "all the banks" aren't servicing venture capitalists. The average person hold *FAR* less than $250k in their account, which is what the FDIC *actually* insures. Both of these banks have unwound in more-or-less the honorable way. There does not appear to be any fraud at this point. Businesses fail, and neither of these banks were entwined so deep into the US economy their loss will affect much more than a quarter's balance sheet.

@@ultimaIXultima The reason SVB collapsed is a systemic failure and not because some investment in some crypto Ponzi or some bad loaning practice. It was because a critical mass of depositors just purely asked for their deposits back. And that is every single bank Achille's. Nothing can save a bank - anywhere in the world - if a number of people above bank' cash capacity will withdraw at the same time.

I have the feeling, that he is holding some awful information back

Don’t give them any ideas !

I expect that's exactly what we'll see. The same way Bear Stearns and Merrill Lynch were taken over by the much stronger JP Morgan and BofA

I wouldn’t be surprised that BlackRock, PIMCO, State Street or Vanguard figure out a way to get a safe takeover of SVB.

Yeah, until its your money at stake then you'll want government bailouts. GTFH

@@rutherfordbhayes423 This happened many times since the dawn of American financial history. This isn't exactly a new idea.

Or why fed reserve didn’t step in and buy the government bonds for cash ? There should be standard procedures for dealing with ban runs, esp when there are high quality assets.

My spouse mentioned that SBV fell just below the threshold for stricter stress testing, due to the weakening of Frank-Dodd in 2018. Yet another thing to blame on the 2016 elections.

Page 87 of their most recent 10-K. "As a banking organization, our liquidity is subject to supervision by our banking regulators. Because we are a Category IV organization with less than $250 billion in average total consolidated assets, less than $50 billion in average weighted short-term wholesale funding and less than $75 billion in cross-jurisdictional activity, we currently are not subject to the Federal Reserve’s LCR or NSFR requirements, either on a full or reduced basis."

@@katarh The reduction was Republican policy that a couple of Republican senators (probably Manchin and Sinema, though I'm not sure) also supported. I wouldn't be surprised if some rich people bought those votes because I don't have much belief that R senators are smart enough or would have any incentive to go for those changes to the law on their own.

The issue with SVB wasn't VC loans, it was VC depositors, who proceeded to bank run them. Also, they invested large amount is very long-durariom debt, which got his hard by high interest rates.

Yep. MSM is fear porn.

They're waiting for 2024 election drama to kick off and buy them a few more years. Gotta burn what fuel is on hand until then.