The Prof G Pod with Scott Galloway No Mercy / No Malice: Venture Catastrophists
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Mar 18, 2023 The podcast dives into the historical banking crises, showcasing J.P. Morgan's pivotal role in restoring trust during the 1907 panic. It draws fascinating parallels to modern banking practices and the obligations of today's wealthy. The discussion also tackles the dramatic collapse of Silicon Valley Bank, exploring the ensuing panic among venture capitalists and the troubling failures in risk management. The examination of personal interests during financial turmoil raises critical questions about accountability in the industry.
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J.P. Morgan's Intervention in 1907
- During the Panic of 1907, J.P. Morgan pledged substantial personal funds to stabilize the failing banks.
- He saw both an obligation to the system and an opportunity for personal gain.
A Contrast in Leadership
- Modern tech billionaires lack the same sense of responsibility as J.P. Morgan.
- They are unlikely to use their wealth to address systemic crises.
Fractional Reserve Banking
- Banks operate on a fractional reserve system, lending out more money than they hold in deposits.
- This practice, while potentially risky, is essential for economic growth.