Collapse and Consequences: The Credit Suisse Crisis | 12min snip from We Study Billionaires

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TIP539: The Banking Crisis Explained w/ Shawn O'Malley

We Study Billionaires - The Investor’s Podcast Network

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CHAPTER

Collapse and Consequences: The Credit Suisse Crisis

This chapter examines the fall of Credit Suisse, particularly the impact of wiping out $17 billion worth of AT1 bonds during its acquisition by UBS. It also discusses the Federal Reserve's evolving policies on interest rates in the context of inflation, recession fears, and the broader implications for investors and the banking system.

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Episode notes

On today’s episode, Clay sits down with Shawn O’Malley to provide an update on the banking crisis. For months, many have said that the Fed will continue hiking interest rates until “something breaks”. Shawn breaks down why it feels like the Fed broke something, and what it means for investors.

Shawn is the chief editor and writer of our daily financial markets and investing newsletter. He aims to bring a value investor’s perspective to understanding current events.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro

00:07:18 - What led to the recent bank failures of Silvergate, Silicon Valley Bank, and Signature.

000:16:03 - How the Federal Reserve responded to prevent a collapse of the banking system.

00:18:07 - How each crisis is setting a precedent and making impacts in the crises that proceed it.

00:30:19 - Why Credit Suisse was forced to sell to UBS for pennies on the dollar.

00:33:27 - What the recent drop in treasury yields means for markets.

00:46:43 - How investors can prepare themselves for this difficult economic environment.

00:52:05 - How investors should view money market funds in light of recent events.

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
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Tune into our previous episode covering The Joys of Compounding.
Check out our recent episode covering Mark Leonard's Letters and Constellation Software.
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