The worst year for banks since 2008 | FT Film
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- Опубликовано: 25 дек 2023
- The banking sector survived two big shocks in 2023: the collapse of Silicon Valley Bank and the disaster-driven sale of Credit Suisse. Swift action prevented a global economic crisis but threats remain
#banks #financial #financialmarkets #bankingsector #siliconvalleybank #creditsuisse #finance #bank #banking #citibank #citigroup
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The system is failing as a result of both government and federal policy. In the next days, the banking crisis would have to be epic and gigantic for the FED to decide not to raise interest rates. This won't happen; an increase and a crash are coming. There will be more negative portfolios this 2nd half of 2024 with markets tumbling, soaring inflation, and banks going out of business. My concern is how can the rapid interest-rate hike be of favor to a value investor, or is it better avoiding stocks for a while?
Very true, you can be passively involved in the markts and still amass wealth-gains using an investment advisor. I first dabbled in stocks late 2019, just before the pandemic, and that same year gained over 150% with no prior investing experience, basically all I was doing was following directions of my advisor. We are working on a retirement ballpark of $3m and I’m certain my goal isn’t farfetched after subsequent investments and tremendous returns so far.
Mind if I ask you to recomend this particular coach you using their service?
The advisor that guides me is 'Tenley Megan Amerson' , most likely the internet is where to find her basic info, just search her name. She's established.
I just checked her out on google and I have sent her an email. I hope she gets back to me soon.
Something really beautiful to see is that this time we didn't bail out the banks.
We bailed out the bank's creditors which I think is the right thing to do.
we didn't bail them out because we didn't need to, lol
'you have to stay paranoid to survive in this line of work'
Or to make money by making others scared
@@joshuatuttleby8489 there's no space for leniency. Fear is a constant thing in the world and the markets. However one decides to use it, that's their bit. Money's hot anyway.
I'll vouch for this. I work in Risk, and have to remind myself that I get paid to be paranoid, but I don't need to be off the clock. I'm sure other professions have the same thing.
I still blame the FEDs for this, because in the end they benefit by either buying off the failed banks cheaper or something. The fed can print credit as long as someone will borrow it into existence, but they cannot print product (or production).
You're right ! Now that the market is in decline, I know what I want to do, but I'm not sure which stocks to buy, which investmnts would yield the best profits, etc. The potential gain is greater due to the risk, and professionals are better at negotiating such exact contracts. Right
True, initially I wasn't quite impressed with my gains, opposed to my previous performances, I was doing so badly, figured I needed to diverssify into better assets, I touched base with a portfolio-advisor and that same year, I pulled a net gain of 550k...that's like 7times more than I average on my own.
I blame the banks being over-leveraged on bad assets. They got fat on easy money and when the easy money dried up, they were caught with their pants down.
You blame the Fed for management failures?
Is it really a bad year for banks? Pretty sure JPM and HSBC were quite happy about the deals they made this year to buy up SVB and first republic… unlike credit Susie, those weren’t bad assets. They had liquidity issues which turned into solvency issue because of a mismatch of short and long term of assets and liabilities. To compare this with 2007-08 is completely absurd
Wasn't a bad year for UBS either having bought Credit Suisse at a colossal discount.
Lehman didn't have bad assets either.
It’s amazing really. We have a financial crisis, caused by greedy, reckless financial institutions. Congress passes legislation requiring those institutions to be less greedy and reckless. The institutions then lobby to have those restrictions removed, usually in the name of “remaining competitive”. This leads to another financial crisis. It’s completely predictable, and we have been doing this dance since the Great Depression almost 100 years ago.
Agree; the rules should be applicable to all banks - big or small. First; very few meaningful laws are passed and then this cycle of doing-undoing seems to support deregulation risking the economy and the faith in banks.
I believe using an investing advisor is a terrific idea. In the midst of the 2008 financial crisis, I was literally experiencing horrible dreams before I spoke with an advisor. In conclusion, I was able to increase my initial investment from $320k to almost $2.5 million in 2011 with the aid of my advisor, and I later bought my first investment property.
Well, I've been researching advisors lately because the market news I've been seeing hasn't been that positive. Who is the individual who helped you, and is he or she still around?
Absolutely, I agree, and the markets are currently in a frenzy. The greatest time to observe them, learn more about them, and take advantage of opportunities to strike is now. My advisor, Amber Dawn Brummit told me this. She has witnessed a number of market cycles over the years and has some insight into how, why, and what will happen next.
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 email shortly.
‘Miraculous that this wasn’t disastrous’, you can thank the FDIC for bailing depositors out and containing the domino effect. Consequently, ye olde national debt faces even more upward pressure. Had SVB, Signature and FR been located in any other country that cant issue its own bills, then there would have been an immediate contagion effect. In the US, this pain will be felt later on.
Excellent interviewees, all of them! The takeaway here is that "4 or 5" unsupervised, well-suited individuals could have the hyperleveraged firepower to blow up our entire financial system. Post QE, we're still in an overliquidized market system where losing tens of billions of USD is merely a hiccup, but much more serious reform of not just the banking sector - rather, the concept of wealth - should be discussed in earnesty now.
...and I just have to applaud Katie Martin for her exceptional clarity. Everything she says comes across. There's no deadweight or non-sense here.
Well said.
Great content! I hope FT will have more video about shadow bank, it's a great topic to explore.
Thank for all your effort
Have a good next year everybody
I think because it was a Swiss giant bank which was collapsed not an American one that prevented a global financial crisis. Swiss has highly, enoumorsly regulated banking system and a very keen eye on credit suisse already for many years. If it was an American bank of a size of CS was failed then that wouldn't have been pretty. CS took so many wrong turns in recent years but did so well over the past 160 years and was as loyal as possible to Swiss standards. That's why when its share prices plummeted, it didn't go under bust. It had correct asset/liability ratio, had necessary insurances and AT1 bonds and had solvency so and so fort.
Should be worried about the Deutsche bank, and this bank actually was about to crash at the end of 2019, guess what happened right after? Starts with C and ends with D. Which then followed with a very good excuse to print the most money ever printed, until today at least.
It's tightly regulated, yet still enormously corrupt. A side-product of Swiss neutrality.
@@strykenine7902 oh you're perfectly right. Part of it being regulated is to regulate the corruption as well
Was a great buying oppertunity for financial stocks. I bought two financial related stocks and they're both up 50% providing never before seen dividend yields and added to some other existing positions like BlackStone due to the broader panic. At the end of the day, I was sure the plunge protection team from the Feds would save the day. Thank you Feds.
What's super amusing to me is that the very people who enthusiastically helped amplify the Twitter shitstorm that triggered the bank run on Credit Suisse were surprised by what happened next - The write-off of the bank's $17bn AT1 bonds.
The sheer purpose of AT1 Bonds, as in the ease at which it can be written off reeks of moral hazard in the coming years. 🤞
@@blueskyloo AT bonds were created after the GFC for this very situation. The bonds were rightfully written down, despite many threw a temper tantum for not reading the prospectus in the first place. It was a lot easier and comforting to blame the Swiss instead.
@@TrangLe-yb5sy Absolutely correct you are. I am just wondering, if AT1 bonds land up with banks who do not exercise due diligence while lending, such banks will conveniently write off bad loans, purely because of their ability to raise these bonds to fill up the hole created by reckless lending. So the ease allowed to banks in terms of raising money through AT1s is discomforting. Good tools in the wrong hands can be quiet dangerous.
@@blueskyloo Thank you for elaborating your view, which helped clarify some points. I agree risk-management is generally weak and the bankers who give risky loans get fatty bonus as long as those risky bonds are repaid. However, when their AT1 bonds are written down that's synonymous with the bank is dead. In the case of CS the bonus associated with the AT1 bonds was wiped out while top executives were fired. Investors who buy and hold risky bonds such as the AT1 are usually big players. I think they won't allow themselves to be at the receiving end of the moral hazard easily.
@@TrangLe-yb5sy True. You r absolutely correct with regards to CS and AT1.
And as far as big investors and their due diligence, is concerned I hope you stand corrected their too.
Amazingly, I have a non-financial background and learned a great deal of practical financial, economics knowledge, use cases, and more from the FT.
I think a lot of people assume FT is news for rich people but I genuinely believe they are one of the best outlets for explaining how the world functions
Everytime interest rates are raised too much, a bubble bursts. And from them on a confidence crisis takes hold, freezing the money market and threatening a full domino effect, which only stops with Central Bank guarantees.
Nah everything fine
The world is in a serious economic crisis for months, but for some reason no one has the courage to call things by its own name.
It's quite simple why rates are climbing with rising imports and falling exports, the FED is obviously to be blamed for banking crisis. Something will eventually break if they keep the quantitative tightening and higher interest rates. Is this really a good time to have some savings in stocks?
first austerity, then brexit, now widespread bank failures. .always do your own research & speak to a license advisor before thinking about putting your money into these crazy markets
Exactly, most youtubers said the market would be fine few months back, but it's been a major downturn. Luckily, since the rona-outbreak in 2020, I've avoided the drawback of trial and error by simply following professional guidance. I'm semi-retd and work only 7.5 hours weekly, with nearly $1m ROI after subsequent investments to date.
this is incredible! how can I vet your advisor, mind sharing info, if you please?
Finding financial advisors like Sonya. Lee Mitchell 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.
She appears to be well-educated and well-read. I ran a Google search on her name and came across her website; thank you for sharing.
Good video, but no talk about why this actually happened in the first place. The cause of all of this - an extended period of easy money and low interest rates - was a direct result of the events of 2008. Which themselves were the result of another period of easy money, low interest rates, and debt accumulation. And here we are, with more of the same. We shouldn't be patting ourselves on the back.
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?
It seems like there's potential, but caution is warranted. hence I will advice you get yourself a financial advisor that can provide you with entry and exit points
I concur. Drawing from personal experience collaborating with an investment advisor, I presently manage a $1 million well-diversified portfolio that has seen remarkable growth. It's not solely about having the funds to invest in stocks; one must also possess knowledge, persistence, and the resilience to withstand market fluctuations.
My partner’s been considering going the same route, could you share more info please on the advisor that guides you?
Sonya Lee Mitchell maintains an online presence that can be easily found through a simple search of her name on the internet.
I wonder if people that experienced the 2008 crash had it easier because this market conditions are driving me to insanity, my portfolio has lost over $27000 this month. alone my profits are tanking and I'm don't see my retirement turning out well when I can't even grow my stagnant reserve.
Even in this whirlwind, there are chances to be had, thus an increase in volatility is not always a bad thing. You have an opportunity to rebalance thanks to volatility. In order to help you diversify your portfolio, you must hire a professional
I wholeheartedly agree, which is why I choose to delegate my daily investment decisions to a coach. They specialized knowledge, research, and risk management skills make it challenging for them to underperform. They focus on utilizing risk for its asymmetrical potential while mitigating downsides. I've been with my investment coach for over two years and have earned over a quarter-million dollars.
Do you mind sharing info on the adviser who assisted you? I'm 49 now and would love to grow my stock portfolio and plan my retirement
The decision on when to pick an Adviser is a very personal one. I take guidance from ‘Carol Vivian Constable‘ to meet my growth goals and avoid mistakes, she's well-qualified and her page can be easily found on the net.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
blaming ukraine war for high inflation is the laziest journalism
I gotta watch this today, tomorrow, on the 4th day and seventh day. How much data is that? "Grind to a halt" the music sounds like hip hop, and you guys are laying your lines. 🎉
reminded me of what Edward Chancellor and Hyman Minsky said before stability creates instability!
Marvelous video!
Fantastic documentary!
Wait until March when banks have to disclose how much unrealized loses they have on their books.
Bless 🙏good info.
Bank failures are likely to continue increasing due to rising interest rates, as it causes their commercial paper and treasuries to become devalued. To prevent a severe economic downturn, it is necessary to implement a freeze on interest rates. Simultaneously, the White House should support the industry in boosting gas and oil production to lower fuel prices. The anti-oil stance only contributes to higher energy costs, leading to inflation throughout the economy. By reducing interest rates, tightening the money supply, cutting government expenditures, and increasing the availability of affordable fuel, inflation will decrease, and the economy will thrive. Unfortunately, various conflicting agendas make it unlikely for all these measures to be implemented, resulting in a recession and persistent inflation.
regulation does not work if there is no accountability
And as long as the FED keeps bailing out banks, it doesn't matter how much regulation there is. They keep on gambling...
We still have the failure of Binance to face since CZ pled guilty to money laundering and was found liable for billions in damages. FTX was a small operator.
The silver lining is FTX depositors will get 100% of their deposits back.
I think the deal that was cut with CZ was aimed to keep Binance operating given its market dominance. If you want to protect crypto investors, purging bad actors from Binance while keeping its doors open is the regulatory sweet spot.
@@jdelarunz In the U.S., the FDIC was approved to backstop everyone’s deposits in the banking sector, which restored ppl’s confidence in banks. First Republic, however still went under, where they were seized Abby the FDIC and subsequently merged with a larger bank. This was REAL banking sector crisis which could have turned into a deflation, carrying off the banking sector in the U.S., not unlike 2008.
HSBC is guilty of ML, when are they going to fail?
CZ has bigger friends like biden
Thank you, FT!
Great documentary.
Great content. AT1 bonds in future could become moral hazard. God knows what else eludes us. Only time will tell.
Great video guys 👍
Not watched the video, just popped in to say the old saying....15 year cycle! Because yet again, it fits!
then wondering about the Kondratiev technological cycles ... 15, 30, 45, 60
The storyline is a bit incorrect. The inflation started rising already in Summer 2021 well before Russian aggression of Ukraine. It was driven by pandemic related bottlenecks in supply chain which became more severe with the war.
interesting, thanks
Regulations after 2008 dont do much. Most arent followed.
This was going to happen, I hardly blame the banks for a bank run
Great video
The FDIC backing those above the limit will go down as one of the worst decisions ever made in the history of banking.
Meanwhile nobody is talking about the role the FED played in drastically increasing the rates (same Fed that reduced rates). Those bonds are said to be "risk-free"...
Key question is not why rather how they survive through the chaos
Unlike 2008, we're not saving the whole system. Some are dying, too bad for them.
Can anyone explain to me why the Eastern Washington bank that failed in August 2023 is not listed on the FDIC site of bank failures? I hear it was because of crypto that it failed.
I don't think it "failed". It was a tiny state chartered community bank that was being bought by a crypto connected company wanting to change it into a online bank with crypto. They had $50 million seized by the government because it was tied to a crypto company being investigated. The actual community banking business was sold to Eastern Oregon Bank. So technically it didn't fail. They had shady crypto funds seized and actual local Washington depositers now bank with the Oregon Bank.
It's only retail FDIC-insured deposits holding banks that fail that get listed on FDIC, and the purchasers bought Eastern Washington Bank, but then sold on the retail FDIC-insured deposit holding business to another bank. What's left is the Investment infrastructure and expertise, which isn't FDIC-insured. So Eastern Washington Bank didn't fail, but it was repurposed as purely a mini private investment bank. However, the existence of shady crypto investments being seized suggests it was purchased as a means of laundering those. And regulators shut it down.
@@tmzz3609 I read they changed their charter to allow investing in crypto, without approval and lost money. But It must be that it was so small and just traded hands very quickly. It should still be listed on the website otherwise the market is distorted.
ITS CAUSE they know if they fail they get a bailout.....and no personal liability...its not their own $
I don't know the slightest thing about the financial sector, but common sense tells me this is not over.
Greatttt
You should look at the sec's enforcement action against ripple labs and the conflict of interests (ethgate)
Leave Credit Suisse alone.
They played the game and lost this time...no harm no foul.
The American people took charge. They are the fools.
Good video!
Worst year for banking until 2024
sometimes i get confused between SVB and SBF
yes very sad. nobody could have foreseen this.
What type of capital funds?
Rich people are so excited and smiling ecstatic during catastrophic events hehe.
- Analyze historical trends for potential risks in current financial environments (00:53).
- Stay informed about regulations affecting mid-sized banks (03:23).
- Monitor deposit outflows as indicators of a bank's health (04:48).
- Scrutinize bank announcements for signs of financial instability (05:36).
- Determine the safety nets and interconnectedness of your bank (13:33).
- Consider the stability of non-banking financial sectors (14:23).
- Assess the leverage and risk exposure of private funds (15:19).
- Remain vigilant about regulatory changes and their implications (19:41).
Businesses need Bank diversification. just like stocks. or pay for ICS/ CDARS accounts, which if you are making or have millions of dollars the bank will not charge you for it.
1st step is did you educate the world about SHIB? How to avoid paying capital gains tax. People don’t get division at all 589/2 = ?/2=?/2 isn’t this the same as double it $0.01 every single day how much would it take to reduce SHIB to 50 million in circulating supply of SHIB’s?
Anyone can help me please understand why 10 year interest rate bonds in high interest rate environments face losses when compared to low interest rate environments... it was discussed at around 2:35... i think i understand it's related to long vs short term returns, but don't fully which parameter is in control here.
My response (I could be wrong) is that in a 10 YR bond, the get the same interest/fix interest for 10 years. While if market conditions change from year to another, you can obtain a higher bond yield investing one year at a time.
19:29 not without consequence. The program initiated by the fed to support the sustem is more money printing. At some point the piper will be paid, and it probably won't be the banks, but the lower to middle class.
You guys talking about bank failures in 2023? 2024 is the right year to talk about that 😅
2024 will be the worst year for banks period!!
This is just the natural effects of tge science of economics. You can ignore the science but you can't suspend the natural effects of tge science.
The only thing this regualtor is stop selling debt to people its daft
Yeah just blame everything on Russia not the unlimited printing that the United States government has done 3:02
Need 4k
Also İ m professional geographer too,İ worked all life and İ know very very little because life not frozen,everthings changes in moment as positive or negative immadiality.
The FDIC only provides insurance for the first $250,000 after that you are screw. So, the best policy is when you hear rumors, just look for the door ASAP.
You can also deposit your money at multiple banks to reduce risk.
Where does that 250k usd come from? I feel the printer is just warming up
@@m0o0n0i0r It comes from an insurance fund all banks have to paid based on balance of their deposits and risks each institution has. On September 30 the DIF had 119.3bn USD, after taking a hit because of the insolvencies in the video. Also after those colapses FDIC modified the premiums so the rest of banks had to put more money into the fund.
Only if the fund runs to the ground the government adds more money.
@@guill90 this is more easy and worth
2008 was the year banks unlocked access to taxpayer money and subsidies greater then all other industries combined...
Could not agreed more with this statement.
This was not bad year for banks, it was bad year for tax payers that need to step in for banks.
Stonks up
Dude Im a bachelor degree student in banking and financial technology !!
Better get a CS, a Software engineering or a physics degree if you want to work for fintech.
@@elbertmkizy7086or a financial engineering degree or computational finance degree
Good thing there isnt a giant mess spreading its tentacles....
Why I prefer to owe money to banks than keep it there, it doesnt take long for them to collapse. Keep your money in assets!
Today there's not liquity in global financial markets¡¡
🎉🕊️ Happy birthday celebration for everyone in dio 🎉
0:24 - Former UK Home Secretary Sajid Javid was also in the queue outside Silicon Valley Bank?
Fifa World Cup was in 2022!
All Australian banks had huuuge profits in 2023. Tens of billions! A very good year if you owned enough shares in all these banks to have a seat at all their tables! Shareholders such as BLACKROCK, VANGUARD, STATESTREET, and their ‘cough’, subsidiaries! Nothing to see here. Especially when most of Australia’s biggest commercial ventures are ALSO OWNED by the very same investors. Approximately 10-20% shares of ALL the top money GOUGERS. How so much profit!? Easy, all your companies pay more for goods from all your companies. I call it COMPOUNDING THEFT.
Didn't most of the banks get bailouts 2008?
8:19 there you go
Yes, the fed purchased the damaged assets from the banks. Then the fed sold it back for profit once economy recovered couple years later
But don't allow students loans forgiveness to proceed
As soon as I heard "its russias fault interest rates rose from 0%", you lost me
When will a bank hit it's first trillion dollar market cap?
i had a super high fever in march when the bank crisis happend, So i thought hey lets buy some first republic stocks, Lesson learned never buy stocks when you have a high fever.
It's like playing with box of matches right next to tank full of gasoline didn't led to disaster THIS TIME...😄
That's why China won't let people withdraw money from their accounts 😂
😅😅😅😅
Desy mulți dyscutanymyk nu se vede clar parca așteaptă ceva ce anume nu sevede nymyk😮
Yeah I don't think the landing that we got was anything on the good side it was pretty bad and the only ones that kind of walked away from it halfway decent are the ones that were already well off so I don't know what the hell you're talking about
Nah. Stonks up, home prices up, EVERYTHING up. Nothing bad
Buy silver and gold. This ponzi one day will collapse.
It woulkd be good if I could watch this without it Lagging and stopping constantly.
is this supposed to clear us up?
The Venture Capital Bailout Fund.
talk about Chinese cars manufacturers international expansion
The real reason that this didnt cascade was because the dogs in the street knew that Credit Suisse was on the brink...no one was surpised
aw yah Billy Hwang!
14:00 now NBFC take the share of Banks. But that is fine. If waste fellows are going to NBFCs to deposit money then it is upto them.
I don't want risk. So I am happy that the shitty things are moved from banks to NBFCs
since 2008? how about ever? historic bank failures.. not just since 2008
to premature it's still going on.
it looks like the end of U.S. controlled global server currency.
You say in america this "wind" in your art.
Wow, what a great "expersts" FT has...
the worst year yet 😊😉