Banks are permitted to classify assets such as you securities into their whole to maturity portfolio. When rates went up so they were unrealized losses into that into that whole to mature portfolio meaning the mortgages and securities weren't worth what they had purchased them for. So imagine your Silicon Valley bank now they took in record deposits due to a record year for venture fundraising right poor codes are depositing 50 to $100 billion in new deposits at Silicon Valley bank. First the bank starts prioritizing. Meet the wire transfer with cash. Then meet the wire transfer demand with selling what are called available for sale securities or their trading portfolio. And then they crack the emergency glass at the last resort they sell whole to
Ram Ahluwalia, CEO of Lumida Wealth Management, joins us for his second time on Bankless to discuss the latest bank failure and what it means for the rest of the traditional finance system.
Are there more failures to come? Can crypto save the banks? Why are politicians being quiet this time around? What will Powell do next? Answers to these questions and much more in the episode.
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------ Timestamps:
0:00 Intro 8:30 Season Two of the Banking Crisis 10:38 First Republic Bank 13:00 Politicians Being Quiet? 15:13 Ram's Slide Agenda 16:10 Co-Morbidities of Bank Failures 23:40 Negative Equitites 24:40 Publicly Traded Banks 30:27 The Walls Preventing a Collapse 35:40 The Banks' Mycelium Network 39:26 What's the Problem? 45:50 Commercial Real Estate 47:10 The Next 2008? 50:10 CRE Risk 53:07 Arthur Hayes Take 56:40 Balaji Take 1:01:13 Will Powell Blink? 1:03:20 How to Fix the Banks 1:09:35 How Crypto Saves the Banks? 1:12:55 Closing & Disclaimers
------ Resources:
Ram Ahluwalia https://twitter.com/ramahluwalia
----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research.
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