The Silicon Valley Bank (SVB) has suddenly collapsed. As of the end of last year, the bank had 175 billion dollars in deposits, and approximately 151 billion dollars of those deposits were uninsured. The Federal Deposit Insurance Corp, FDIC, insures all bank deposits nationwide up to $250,000. If you had more than that in this bank, and a great many Tech start-up companies did, and the bank does not have sufficient assets to cover it, you lose. Getting back $250,000 while losing tens of $millions will not save your company.
This may be a Major Extinction Event for small high-tech startup companies. That’s very bad, but it may be even worse. These big banking corporations issue stocks that investors buy. The stock value of SVB has plummeted to nothing, so all those who invested in it have lost their money and this has caused a panic among other investors in other banking stocks, who are now unloading their stocks.
Large depositors in other major banks are withdrawing their funds, and a national run on the nation’s largest banks could collapse the banking system, which would result in the collapse of major corporations of all types, shutting down business and industry and putting almost everyone out of work. This thing could snowball.
Yesterday, March 10, 2023, “Secretary of the Treasury Janet L. Yellen convened leaders from the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency to discuss developments around Silicon Valley Bank. Secretary Yellen expressed full confidence in banking regulators to take appropriate actions in response and noted that the banking system remains resilient and regulators have effective tools to address this type of event.”
So right now, they’re on it, but that doesn’t mean they’ll fix it, because here’s what caused it:
The increase in the Federal interest rate on bonds has made the earlier bonds sold with interest rates of 1% or less, of much less value, because inflation has devalued the dollar. Why would you buy a bond that pays 1% interest when inflation keeps making the dollar worth less. You want bonds that pay higher interest so you can make a profit or at least keep up with inflation.
Banks own $Trillions in Federal bonds at very low interest rates. SVB was heavily invested in these bonds too, and told their depositors that they needed $2.5 Billion to balance their accounts. People lost confidence in them and started taking out their money, and in two days the bank had collapse and was taken over by Federal regulators.
Many other really big banks also have lots of these non-salable bonds that they put their depositors money into as a safe place to keep it. These bonds have time limits before the government has to redeem them, 10 years and more, so the banks are stuck with them until they can be sold back, and meanwhile the depositors money is frozen in them and unavailable to be withdrawn.
Most banks operate on only about 10%, AT MOST, of the actual deposits in cash. All the rest is out on loans and invested in bonds. So if people panic and start pulling all their cash out of the banks, the banks will collapse and so will the entire US economy, and it will happen literally within a few days from when it starts.
Stay tuned………
https://grrrgraphics.com/the-tip-of-the-banking-iceberg/
SILICON VALLEY BANK, JUST THE TIP OF THE ICEBERG
Cartoon published 03/12/2023
Update: U.S. Treasury Secretary Janet Yellen rules out a bailout of collapsed Silicon Valley Bank.
Silicon Valley Bank is yet another example of corruption in the banking sector. I’ve read that SVB is the second largest banking failure in US history.
A woke and ‘green’ bank, SVB was devoted to ‘DIE,’ or Diversity, Inclusion, and Equity.
Maybe the latter in particular contributed to their collapse, but before it did go bust executives running the sorry show made sure they cashed out of their stock and rewarded all the top executives with generous bonuses. The taxpayers will pick up the rest of the tab via FDIC insurance.
A lot about this bank collapse sounds familiar. Jim Cramer recommended the stock ahead of its demise—just like he did with Bear Stearns and Lehman Brothers. Of course, Cramer should be put on the ignore list after he pounded the table and insisted on forced Covid vaccinations for everyone in America. The man sided with tyranny. Don’t side with him—ever again.
Then there is the billionaire class that always seems to come out on top. Peter Thiel’s fund withdrew most of its money out of SVB just in time. Perhaps Thiel possessed better inside information due to his Palantir ball or something, or it could be that he is smart and always knows when it’s time to ‘get out.’ My point is the insiders always have the advantage. Regular investors become bag holders.
We need a criminal investigation into SVC, but most likely they will be bailed out before the collapse of more financial institutions is triggered. We know Wells Fargo has problems, almost on a continuous basis. Apparently deposits were disappearing and many customers complained of incorrect balances. WF is a criminal organization that has already paid large fines in the past—just like Pfizer.
I’m hardly the one to dispense financial advice, but be careful with banks—especially the large ones. I once went ‘all in’ on silver and I was convinced that I would make a fortune. Instead JPM crushed silver through illegal shorting and manipulation. They paid a fine, but the damage was done. Starting on May 1, 2011, their traders illegally colluded and shorted silver—and in a year or two the shiny metal collapsed down to $13. It forced me to realize just how much power and influence the big banks possessed. The average Joe stands no chance against them. That’s why I would not keep an inordinate amount of money in any bank—especially during these unstable times. One could wake up and find their banks declaring bankruptcy and their money gone.
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The ultimate blame belongs to the Federal Reserve. It was set up with the promise of ending booms and busts. Instead, they intentionally brought about continuous booms and busts. The Roaring 20s and easy credit. Then the Great Depression made longer by FDR’s bad policies that benefited big banks who wanted to buy up infrastructure for pennies on the dollar. Then we had the post-WWII boom, the inflation bubble caused by the Vietnam War and LBJ’s ‘Great Society’ spending. We experienced very high interest rates under Jimmy Carter. Fed Chairman Paul Volcker stepped in and raised them to ridiculous highs in order to counter inflation as well as crush the gold and silver ‘bubble.’ Then we got the housing bubble, the Internet bubble, the post-9-11 stock market crash, and the 2008 bank crash due to their criminal manipulation of housing derivatives. After that we got the ‘everything bubble,’ which may be crashing right now. Will SVB trigger more failure? Maybe not right away, but the dollar is fundamentally flawed and it won’t take much for another Great Depression. Perhaps the BRICS countries will trigger it. Or maybe WWIII.
Wells Fargo. Yeah, there’s an outfit that used to mean Quality and now means Corruption. Anyone banking with them just isn’t paying attention.
There’s talk that this could bring down the global economy but that may be fear propaganda designed to make that happen. I’m not running to the bank and pulling out my money, there’s not much in there anyway and I’ll be okay if I lose it. Meanwhile there’s no doubt that everything is getting crazier and crazier and it can’t keep doing it forever. Sooner or later the whole thing will fall apart and I don’t think it’s going to be long now.
https://resistthemainstream.com/teacher-of-the-year-arrested-at-school-charged-with-child-sex-abuse-and-child-pornography/?utm_source=newsletter1
‘Teacher of the Year’ Arrested at School, Charged With Child Sex Abuse and Child Pornography
A San Diego, California, “Teacher of the Year” was arrested Tuesday, charged with child molestation, then arrested again Thursday.
Tuesday, Jacqueline Ma, 34, was arrested on three counts of lewd and lascivious acts with a child under 14 and three counts of oral copulation with a child under 14, according to a report from The Western Journal.
San Diego County Sheriff Kelly Martinez said National City police arrested Ma again Thursday. Additional charges lodged against the teacher include six felony counts of knowingly possessing obscene material featuring children. She was also charged with four felony counts of having child pornography. Ma was further charged with one felony count of trying to persuade a witness to not testify against her.
The 5-foot-9-inch 168-pound teacher is detained in Las Colinas Detention and Reentry Facility after she was denied bail, according to the sheriff. Ma’s arraignment is scheduled to be conducted Monday at 1:30 p.m., according to law enforcement records.
National City School District Superintendent Leighangela Brady confirmed in a Tuesday statement that Ma was arrested on campus, around 8 a.m., away from students, according to an NBC San Diego report.
The 14-year-old boy whom Ma allegedly molested is the only victim the district is aware of, the report added, noting that child is no longer a student in the district.
Before her arrest, Ma taught sixth grade students at Lincoln Acres Elementary School in the National City School District. She was reportedly released on bail after Tuesday’s arrest, which was revoked after her second arrest Thursday.
Aileen Carillo’s younger brother was a former student of Ma’s, according to the NBC San Diego report.
“She went over the top,” Carrillo reportedly said. “She would go to my brother’s games in Tijuana every weekend. She went to one of his birthday parties, everything.”
“Honestly, I used to tell my mom, ‘Why is she always texting my brother?’ And she had contact, too, but the way she was always checking in with my brother, I thought it was nice at first, like she really cares, but I’ve had a lot of impactful teachers that didn’t have to be that close.”