US Banking Crisis: The Truth Behind The Disaster

Silicon Valley Bank, Signature Bank and Silvergate bank have all collapsed throwing up a warning signs that something horrible is happening in the economy. But what's the truth here? This is a story of incompetence, a changing economic environment and political lobbying.

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Producer: Dagogo Altraide
Researched by: Ruslan Pushkar
Edited by: Tanzim Uddin, Dagogo Altraide
Executive Producer: Tawsif Akkas

[zombiebraintherapist]

I love how every level of management failed and they still felt like they deserved a bonus.

[trainedbyuk]

When our banking system collapsed here in Iceland back in 2008, we threw those responsible in jail. Rich bankers shouldn't get bailed out while ordinary people lose their homes and life savings.

[RichardMoore-jgtl]

Our economy struggling with uncertainties, housing issues, foreclosures, global fluctuations, and pandemic aftermath, causing instability. Rising inflation, sluggish growth, and trade disruptions need urgent attention from all sectors to restore stability and stimulate growth.

[Dan]

"Greg was promptly yeeted from the board"

Spoken in the calm, professional manner that Dagogo is known for made me laugh out loud 😂

[jimfesta]

You damn well know that senior management at SVB knew that they were in trouble beforehand when they cashed out. Every one of those cash outs should be clawed back along with the employee bonuses.

[Call-E]

I'm a risk manager. In every organization i've consulted or worked with, risk management is treated as a check list. NO ONE in management cares about risk management. It's considered a exclusively fiduciary obligation. When you present existential risks and demand contingency plans, typically management tells you there's management reserve or other management funds to address the issue. I'm not privy to what happened at SVB but I'm confident that Moral Hazard allowed for risky decisions to be made and ignoring contingency and mitigative actions. In other words, they knew that the FDIC and its funds would rescue them.

[GillerHeston]

Really, banks require more regulation. The entire idea of banking as "let's gamble" is terrifying. Because they discovered in 2008 that the government will always bail them out, there are no repercussions. These bank crisis are so worrisome. This whole financial crisis and the Great Recession posed the most significant macroeconomic challenges for the United States in a half-century, leaving behind high unemployment and below-target inflation and calling for highly accommodative monetary policies. And this is only the beginning!

[ClementRusso]

The bank crisis isn't over yet, and experienced individuals know credit crises don't end quickly. Some find it amusing that some think it's resolved, but in reality, we're headed for a major economic downturn due to this credit contraction.

[IndiaTides]

Whenever I see cold fusion video, I get feeling that rich people are stupid at the same time I am poor.

[theinvestmentcorner]

Can you imagine putting two major banks under and never go to prison?

[bobbymainz]

The current system is completely unsustainable. The only reason it continues 'as if' is lending and debt. Lending for healthcare, for homes, for education, and plain old credit cards. trouble is, when the bottom falls out, the lenders get bailed out and consolidated, and everyone else loses their shirt.

[jerrycampbell-utyf]

About the current bank situation, I'm really concerned. I am worried about a lot more if a bank the size of SVB may fail. I have a friend who manages a fast-growing startup and was severely impacted by the bank run. I have taken more than $840k out of my bank. Since the FDIC only provides coverage up to $250K, an implosion could have negative consequences. presently want to invest in the stock market. Does anyone have any ideas on how I might proceed?

[gioac]

I work in the tech sector. You wouldn’t believe the amount of cool tech companies that live for years with negative cash flows, while overpaying their employees and management. It’s going to be tough in the upcoming years, but this industry needs to learn that companies can’t survive on the promise of future returns alone.

[Kevin-jcfx]

If a regular employee makes a mistake and the company looses a 100k, he guest fired or thrown in jail. If an executive makes a "mistake" that makes millions of people collectively lose hundreds of billions, he gets to happily exit with a fat check. Yeah, justice is well leveled up in this country.

[karonscott]

I always go back to your 2008 recession video every few months, and it's crazy how similar some of these events are. They say history repeats itself, but its only been around 15 years.. the taste of that recession is still there for a lot of people.

[masticorepoo]

I used to work as a higher up in Deutsche Bank. One of the problems with SVB is that most of their clients are classified as high risk. In the normal banking world, most high risk businesses are offset by a large pool of low risk businesses such as doctor's offices, markets, cafes, etc. Often times the dollar amount of low risk to high risk is $10 to $1 and high risk businesses are charged with a premium in order to operate. SVB skipped over this and ran mostly high risk businesses. Their answer to combat the high risk was "more funding". To be honest, it's an amazement they've been able to stay afloat for so long given their businesses practices. The best thing they could have done is not take shortcuts and just do banking the way it should be done. The entire structure of this bank is backwards, like an upside down pyramid.

[forgotmyname]

That Chief Risk Officer made the call of the century by getting out of there before this all blew up. Sounds like he probably knew how risky things were but the rest of management didn’t care

[leondonald]

The banking situation is a reminder that Fed hikes are having an effect, even if the economy has held up so far, ” It’s precisely at times like these that investors need to be on guard against the next certainty. First SVB, then signature bank and now first republic bank, these are all the signs of yet another 2008 market crash 2.0

[litacoldfield]

I feel like crises have become a part of our everyday life now.
- Wake up, make breakfast, send kids to school
- Check what crisis we have today
- Do the laundry...

[UndisclosedDoor]

Coldfusion saying ‘yeeted’ was the most unexpected and hilarious part of any video he has ever made.