Silicon Valley Bank: How the Billion Dollar Bank Died
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- čas přidán 12. 07. 2024
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At the end of last week, Silicon Valley Bank collapsed - marking the largest bank to fall since the 2008 financial crisis. So in this video we unpack why SVB died and if it's collapse is a bad sign for the health of the global economy more generally
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I thought TLDR forgot about this channel, glad to see its still around, hope it can one day start highlighting promising new businesses or interesting concepts so its not reliant on some new scandal
I tried to buy 8k of SIVB shares on Friday but trading had already been halted: Task failed successfully.
you dodged more than a bullet, but a missile
To steal a line from John Green, “The bank collapsed the way you fall asleep. Slowly, then all at once.”
Or to paraphrase the beginning of 2020, "The toilet paper runs out the way the bank collapses".
I hope the "panic withdrawal" won't be a thing but we've seen "panic buying" just recently, so it doesn't look all that great.
The reason why interest rate and bond have and inverse relation, is that when interest rate goes up, people naturally want those bonds with the higher interest rate. This naturally lead to people not wanting to buy those older bonds that have a lower interest rate. Therefore, people will have to sell those bonds at a discount, to make the worth it.
i was just going to say that. its misleading generalising it in the way it was. idv said that the bonds value is relative to the maturatin value as compared to current interest rate environment
Let's not forget the Jim Cramer Reverse Index holding up well.
TLDR rides on the acronyms TLDR, delivering extremely clipped down news to viewers.
Also TLDR: "Business stories deep dives!"
Good to see a new upload here though 😂
It didn't help that regulations passed in 2010 after the financial crisis was rolled back in 2018.
Deregulation has always led to a bank failures. Banks need to be regulated, they have over and over again demonstrated failures in self regulation.
I don't live in USA, but work for a company in USA, which is not even in California, but, yesterday it turned out that our company used svb for payments, including wages... that's why our salaries are delayed now... well, not a big deal. But I wonder, will there ever be, "non banking institutions" which won't do shit, only process payments/transfers? So no risk, just doing their job?
See Building Societies
Nice video. A couple notes FDIC was not established because of the 2008 financial crisis. It’s been around for decades. Also the graphic used pound symbol when it should have been dollar symbol.
THIS. As a history teacher in the US, this felt like a huge miss.
Damn, it’s been two months since the last upload I forgot I subscribed to this channel
This is much more boring than is being discussed elsewhere but you describe well.
It's a typical "run on a bank" which ran out of liquidity. Was never insolvent.
2007/8 was some were insolvent. Was different.
Banks should borrow short (deposits) lend long (loans, mortgages). That's their job. It's why humans can start businesses or buy a house before they've saved up every penny BEFORE they buy the house.
But you're excluding how Trump let banks like SVB get away with less regulatory scrutiny snc how the CEO spread rumors to prompt a bank run within his competitor's ranks so he could entirely avoid the blame when other banks also went bust. I agree it's a sensational news article but they're most factors at play here that resulted in a boring bank run
@Vulcan Memes
Trump?
So the non large banks had same regulatory regulations as large ones from 2008 - 2016. Then Trump changed that to non huge ones having lighter regs?
Or not that. But orange man bad.
Yeah, this is basically just people rediscovering how banks work and then panicking about it.
Lets hope it doesn't become the gfc or the depression, or spill over to other countries
It's already spilling over to other countries. Look at the stock prices of european banks.
Oh, it definitely will. 2023 or 2024 is the year that will be remembered in the same way 1930 is being remembered now.
majority of the economy is built on unsustainable business models and the only way these businesses can stay afloat is through cheap credit + public fundraising.
This works in a normal economy but we are not in a normal economy.
@@danushairan This is only in America tho. Not here in Germany for example.
@@josiavantroyen4215 With respect I think you are underestimating the level of corruption in European industries.
I hope you are right since that impact going to be very hard on me personally but I am fairly sure it is unavoidable.
@@danushairan You might be right. But I was referring more to the people instead of the businesses since you mentioned "public fundraising" and going into debt. I can't speak for the businesses in Germany but at least the german people have a very different mindset about how to manage money. Here, it is very focused on saving and planning, not so much on buying 3 houses with a credit.
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@Chris Young I have been exploring the possibility of utilizing advisors to help navigate the stock market during these uncertain times. However, I am still evaluating their potential effectiveness in providing the support I need.
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There were no savers at SVB. The vast bulk of SVB depositors were tech startups hemorrhaging cash. SVB's business model was catering to these tech startups. The problems were that no one went to SVB to borrow money and the rate of tech startups springing into existence and depositing vast amounts of venture capital started to fall. SVB should have been matching the maturation times of their investments to the rate of new deposits and the burn rate of their current depositors. SVB failed to manage its risk, so it doomed itself.
Well explained!
TLDR: Is there more to come?
Me seeing Crédit Suisse, Société Generale, BNP Paribas, Commerzbank and Deutsche Bank.
Such a waste of a bailout. Why have a FDIC limit if the FDIC is willing to go well above it?
When the Economy is "Too Good,"
Markets gripe that it's 'Too Strong!'
:-))
Here's an idea: what if we had banks that were NOT for profit?
Would that mean they kept 100% of depositors funds in short-term assets?
How would you borrow for a mortgage/ businnes loan etc?
@@danielwebb8402 I assume you've heard of Credit Unions??? 🤣
@The American American
Yeah. They are huge and successful because......
People voluntarily systematically chose them over a "normal" bank?
And how do they solve this story? You can have a run on a credit union just as easily as on a bank. Unless, as I said, they hold 100% of their customers deposits in cash equivalents.
@daniel webb ...because they are... wait for it... nonPROFIT.
A credit union, a type of financial institution similar to a commercial bank, is a member-owned nonprofit financial cooperative.
You don’t understand this bank failed. It was not caused by greed it was caused by banks incompetence not accounting for risk management. They had enough assets on hand to cover all the deposit first. But when depositors came to collect their money in the bank run, they had to sell their assets before they were fully matured at a discount to get the money together to pay out their account holders. Had interest rates stayed at record lows the bank would not have failed. It was their assumption that interest rates would stay so low that caused the bank to fail. The same thing could easily happened at a not-for-profit bank with bad management.
TLDR this was not caused by greed it was caused by incompetence.
I thought this channel was dead, I’m happy to see it’s not :D
Credit Suisse has generally been a hot mess recently. Just more trash on the dumpster fire. 😅
Not forgetting the that managements and ceo made tons of money before the share price fell.
Yayy another business video!
Arguably not completely sadden because the valley has its own skeletons
the sound effects leave much to be desired
That intro music is straight fire
Bank crisis - - tip of the iceberg.
They’re baaaaaaaaaaack!!!!
Bank for billionaires goes bust because of bonds.
Now that rich people are getting hurt but the high interest rates us poors might actually get some help
Finally a new vid !
small error of using a pound symbol for how much money was insured which would be in dollars
I would like to amend the full support being offered to SVB customers: you only get your full deposit guaranteed if your twitter feed is less than 10% small-government Libertarian BS. No one made you put your money there, maybe just accept personal responsibility amiright? Should be pretty easy to do.
Who thought it was a good idea to keep millions of borrowed (as in the VC’s money) capital in one bank? Maybe we should just let those companies fall along SBV. Might be a good lesson. The only thing we are doing with this bailout is telling others they can be as stupid as they want because the rest of us (other banks in this case) will bail them out.
Many of those companies are start ups, most banks don't lend to startup's...
Using only one bank was bad decision, sure, but there weren't many alternatives.
@@Trekki200 So, they get money from VCs… and… they can’t just open another account in another bank to keep some of that money VCs lent them? And keep lending from SVB?
There is no rule saying all your banking (checking/savings/credit cards/lending/etc…) has to be under one institution. They couldn’t control SVB going under. But they definitely could have diversified where they put their money in case of something like this. Would have thought this would be in our minds given 2008 happened.
Don't worry they are already being bailed out, as usual
Wish the people could benefit from the trades being done with the peoples money, but we don't and get charged for the illusion of security.
You know, I heard about this great channel that was suited for American related news content, it’s called TLDR US. I think they would be the right channel to have a story on an American bank failing.
Sure, but channels like TLDR US or EU are mainly for political news, while a bank failure is more of a financial issue.
Also, the US channel was so little viewed that the TLDR team decided to upload new US content on the TLDR Global channel.
@@josiavantroyen4215 I know, that's the joke. The US channel would get many more views than this channel
whats with the background music being so loud? i get the style choice, but too loud
Ngl it is quite difficult to feel sorry for a customer or a business because they're ONLY indemnified up to $250,000.
Like, you gambled and lost. Deal with it 🤷
Deposit insurance sceems are not anywhere new. They come from the great depression. The have existed for your entire life.
Regardless of where you fall on the issue, if the Fed can just chuck the FDIC's upper limit out the window and ensure everyone's deposits no questions asked, then the Fed can also forgive all student loan debt
Commenting 4 algorithm
Went WOKE and went BROKE, KARMA
Music pls??
Peter Thiel/f Failed.👍 Haha! . . .
Peter Thiel/f called for "A Run😱 on SVB" -
destroying several Silicon Valley Start-ups
and triggering a massive Regional (Specialty,
Mid or Small sized) Bank Failure Contagion.
- on Thursday, March 9th - the day Before,
if Bide Administration hadn't come up with
such a Brilliant fix
SVB paid Lobbyists $500 Million to get
Obama Regulations relaxed by Trump -
for Specialty, Mid and Small Sized Banks
such as SVB. All, but the Top 5 got
subsequently exempt from the minimum
Reserve Requirement Rule (- subject for
Stress Testing).
Possible that Bonds were bought on Margin.
Need to find out.
The CEO anticipated the failure by
eviscerating (looting)) the Cash Flow
with massive Bonus payouts for himself
and his co-execs - all, within the 2 weeks.
So, Regulation wasn't Strong -- Enough.
SVP went Capute! Lying Liars lied to US
again -- as Al Franken kept warning US.
Amazing all the concern about Banks
but nowhere near a similar concern for
an Economic Contagion from a Student
Debt implosion. ... If 'Corp'orations are
People, shouldn't People have the same
Rights as a 'Corp'oration (i.e. essentially,
a Bureaucracy) - that, it is, ultimately,
intended to serve. "The People" are not
even allowed the Right of 'Corp'arations
to claim Bankruptcy from the Debt --
effectively, prevented from fully engaging
with and contributing to the larger
Economy - incapacitated by a lifelong form
of 'Debters Prison.'Oh, to be
a bambino,
trapped, in San
Bernardino ...
🫙... 🍼🚼😭!
The news about svB is richly late. This is disappointing I won't deny. Don't overstretch guys. If you can't run this channel as well as the others it's better to fall back to the other existing ones and be "on the money", pun intended, than spreading your eggs over too many baskets, and be too late, so to speak. Anyway, thanks for the effort
The music is still annoying.
Do you mean annoying or enjoyable?
@@Welgeldiguniekalias the music itself is fine, but it's a bit too loud compared to the presenter's voice IMO.
Can you please tone down the music? This isn't an unreasonable request, come on now...
Don't worry, the billionaires will all be fine. Only poor people will be leaving their homes.
he died instantly the next day
The fractional reserve banking system has always been and will always be doomed to fail, the only solution would be to get rid of it and private for profit banks and on top of that transition from a debt based economy to a savings based economy on all levels with the only exception being in times of crisis
Or maybe get rid of fiat currencies, replace them with commodity (like gold or silver) backed money, and reduce the sweeping control that central banks have over the financial sector.
Remember, this collapse was caused by the central bank raising interest rates, a move that was necessary because the central bank printed excessive amounts of currency.
If we didn't have fiat currency, then they couldn't have done this, inflation wouldn't have been as much of a crisis, and they wouldn't need to set interest rates higher, a power which they shouldn't have in the first place
@@walterpalmer6312 hahaha I hope not, but people are weary due to what happened in 2008 so it understandable that people have ideas how to fix a system that keeps failing
@@walterpalmer6312 well spam bots don't generally disagree this much. They're arguing for complete nationalisation of the banking sector and I'm arguing for complete privatisation
@@Essentially_Nobody money printing is not the only thing to blame, yes. But it has had a massive impact, for example, between the start of 2020 and the start of 2022 alone, the US currency supply was inflated by 40%. So while the lifting of COVID restrictions and the geopolitical situation would definitely have caused inflation, it would have been much less.
Also just to be pedantic, I will mention that inflation is supposed to only refer to the inflation of the currency supply and not the inflation of prices so technically money printing is the only thing to blame. But practically the main thing that really matters is the inflation in prices
@@Essentially_Nobody yes you are correct but lets not forget that credit massively increase demand and that in turn inflates the price of big ticket items like houses to stupid levels Under a savings model these items would be much cheaper and no if people wanted to start a business they could because their target would be a lot lower and if they can't they're either are bad with money and shouldn't be in business or there ambitions are way too high for the short term.
any left-wing media in your spam program?