33 min
Ep. 44 - The Banking Crisis Simplified What's Your 1 More?
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- Investing
With all the noise in the news, are you curious about what's really happening in the banking industry right now? Then you'll want to listen to this episode! We delve deeper than before into the recent collapse of two major banks and how it's affecting the industry at large. We explore the impact of rising interest rates on banks' investments in long-term notes and explain essential terms like ‘held-to-maturity’ and ‘unrealized losses’ in easy-to-understand language, so you can better grasp what's going on and disseminate the information to others. Plus, we discuss potential solutions to the industry's problems and how rising interest rates and work-from-home policies affect the real estate market!
Join us, and let’s dissect this fascinating situation from a simplified lens.
[00:01 - 05:58] The underlying problems behind the collapse of Silicone Valley Bank and Signature Bank
[05:59 - 16:17] The Federal Reserve implements a buyback program to address banks' ‘held-to-maturity’ assets and potential runs on deposits
[16:18 - 22:16] More banks facing potential collapse as 1.7 Trillion in unrealized losses on balance sheets are revealed
[22:17 - 27:12] Things are on a razor’s edge—the dangers of the financial system and the need for action to prevent a domino effect
[27:13 - 33:52] Federal Reserve's tightening phase could lead to commercial lending problems and affect the real estate market
Quotes:
"I think that we've seen a lot of fancy words being thrown out, and at the end of the day, this is still a very simple concept." - Quinton Harris
"There is 1.7 trillion in unrealized losses on the bank's balance sheets. That's why we're doing three episodes on this and why this is so significant. We're trying to understand it and help everybody else understand it." - Quinton Harris
“The Federal Reserve wants to tighten the system… That’s how they want to fight inflation… You’re squeezing the money supply, which disincentivizes the banks from lending money out. So, the remedy is not there.” - Quinton Harris
Resources Mentioned:
WSJ Article: Where Financial Risk Lies
The Market Distillery
Want to continue the conversation? Connect with us on Facebook, Twitter, and Instagram. Be sure to subscribe to us on YouTube to enjoy highlights and full video episodes.
Bank of England is a nationwide lender that takes the time to understand your needs and structure the right mortgage for you and your family. Find your local branch at https://www.boemortgage.com/.
Be sure to Subscribe, Share, and Leave a Review to let us know you want to keep the content coming.
With all the noise in the news, are you curious about what's really happening in the banking industry right now? Then you'll want to listen to this episode! We delve deeper than before into the recent collapse of two major banks and how it's affecting the industry at large. We explore the impact of rising interest rates on banks' investments in long-term notes and explain essential terms like ‘held-to-maturity’ and ‘unrealized losses’ in easy-to-understand language, so you can better grasp what's going on and disseminate the information to others. Plus, we discuss potential solutions to the industry's problems and how rising interest rates and work-from-home policies affect the real estate market!
Join us, and let’s dissect this fascinating situation from a simplified lens.
[00:01 - 05:58] The underlying problems behind the collapse of Silicone Valley Bank and Signature Bank
[05:59 - 16:17] The Federal Reserve implements a buyback program to address banks' ‘held-to-maturity’ assets and potential runs on deposits
[16:18 - 22:16] More banks facing potential collapse as 1.7 Trillion in unrealized losses on balance sheets are revealed
[22:17 - 27:12] Things are on a razor’s edge—the dangers of the financial system and the need for action to prevent a domino effect
[27:13 - 33:52] Federal Reserve's tightening phase could lead to commercial lending problems and affect the real estate market
Quotes:
"I think that we've seen a lot of fancy words being thrown out, and at the end of the day, this is still a very simple concept." - Quinton Harris
"There is 1.7 trillion in unrealized losses on the bank's balance sheets. That's why we're doing three episodes on this and why this is so significant. We're trying to understand it and help everybody else understand it." - Quinton Harris
“The Federal Reserve wants to tighten the system… That’s how they want to fight inflation… You’re squeezing the money supply, which disincentivizes the banks from lending money out. So, the remedy is not there.” - Quinton Harris
Resources Mentioned:
WSJ Article: Where Financial Risk Lies
The Market Distillery
Want to continue the conversation? Connect with us on Facebook, Twitter, and Instagram. Be sure to subscribe to us on YouTube to enjoy highlights and full video episodes.
Bank of England is a nationwide lender that takes the time to understand your needs and structure the right mortgage for you and your family. Find your local branch at https://www.boemortgage.com/.
Be sure to Subscribe, Share, and Leave a Review to let us know you want to keep the content coming.
33 min