The Largest Banking Collapse Since 2008 Just Happened
The top story leading every news publication today is the collapse of an obscure bank you’ve probably never heard of before. As of an hour ago, Silicon Valley Bank is the largest bank to close its doors since 2008 and the 16th biggest in the country. Banking and legal experts tell me SVB went heavy on short-term bonds that collapsed in value as interest rates continue to rise. To make matters worse, SVB specialized in tech deals that have essentially become nonexistent as the fed pushes forward with additional rate hikes.
The question every pundit on tv is asking: Is this the beginning of a financial collapse like we saw in 2008? Probably not. The bottom line is while SVB is likely not the last bank to face serious problems, the big banks and your local bank are likely fine. Here’s why.
I hope you’re right Erick, but bank contagion is a bit unpredictable. Fingers crossed.
Late Breaking News on Sunday Evening. Fed just signaled they are stepping in to guarantee SVB for everyone who steps up to the withdrawal window. AND... they just shut down a bank in NY.
It's going to be interesting seeing how they get around the $250k limit to FDIC account coverage. Maybe from the same magic beanstalk fund the student loan money came from???
This could have been a horrific worldwide banking event if they had let it sit until Monday morning.