Reporters are basically saying these banks are a Ponzi scheme. But when they start to say that the bank needs to have new money in order to pay off old money, that is just not true. The bank has to have reserves on hand that should match any reasonable expectation for the money going out if the bank is being prudent in where it's putting the deposit money.
The recent collapse of Silicon Valley Bank exposed some major cracks in the way that banks have been doing business, and the upheaval is sending shockwaves far beyond the tech sector.
Unwise decisions from leadership compounded by market uncertainty and rising interest rates is certainly a recipe for disaster. How can we analyze these and other warning signs, like an over-reliance on a volatile tech sector, to anticipate and avoid future losses?
Join Phil and Danielle for a postmortem of SVB and a discussion of how its failure could impact value investors.
If you need help identifying warning signs of impending crashes, download your free copy of Your Ultimate Stock Market Crash Survival Guide: https://bit.ly/3YLope0
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