Bankless Ram Ahluwalia Predicts MORE Bank Failures
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May 10, 2023 Ram Ahluwalia, CEO of Lumida Wealth Management, returns to discuss dire implications of recent bank failures. He predicts more failures ahead while questioning if crypto can be the savior for troubled banks. The conversation delves into the silence of politicians during this crisis and the pressures of commercial real estate, drawing comparisons to the 2008 financial collapse. Ahluwalia also explores the looming risks in the banking sector and what solutions may stabilize the system as interest rates rise.
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Comorbidities of Bank Failures
- First Republic Bank and other failed banks shared common vulnerabilities, like high uninsured deposits and unrealized losses.
- A key difference was First Republic's origination of low-interest mortgages, making them less valuable as rates rose.
Politicians' Silence
- Politicians remained quieter during the First Republic Bank failure compared to Silicon Valley Bank's collapse.
- This could be because First Republic had closer ties to politicians and its failure hit closer to home.
Identifying At-Risk Banks
- Ram Ahluwalia uses a scatter plot to identify banks at risk, showing a pattern in failing institutions.
- This analysis helps understand if the banking crisis is systemic or contained, currently leaning towards contained.