The Banking Roller Coaster isn’t much of a roller coaster, it’s more of a free fall. Silicon Valley Bank
Contagion is acting much like the FTX contagion. For those who don’t have a clue what I am talking about here is a brief and simplified recap…SVB catered to a bunch of tech startups, those tech startups were flushed with cash because raising funds was super easy pre-pandemic and somewhat during the pandemic, this was bad for SVB since banks make money by lending. Since SVB customers didn’t need loans SVB decided to invest in long-term assets (Think: 10-year-bonds), The Tech industry has come
down from its high and is now in need of cash, when all the tech startups went to withdraw their money from SVB the bank couldn’t satisfy the requests because of their money being tied up in long-term assets. All of this equals COLLAPSE. This problem was made even worse by the recent interest rate hikes. Interest Rate Hikes make old bonds plunge in value. (Please, forgive the long run-on sentence!)
A little education for all because some have asked. When interest rates rise it makes bonds very attractive. However, old bonds that do not have attractive interest rates become less desirable. Therefore, the bonds with old interest rates drop in
value and these were the bonds that SVB was stuck holding.
The SVB collapse has sent a major shock wave through the banking industry and it is the
perfect example that the financial industry as a whole is not built on the rock! The foundation of our global financial system relies on the emotions of people from all over the world who are trying to predict the future at all times. This is a recipe for disaster as any sane person can deduce. In short, when one globalized structure (Or just a very large institution) fails, panic will ensue and that panic will produce chaos and collapse. This is why localized economies are favored by some
faith-based economists. The only problem, and it’s a massive one, is getting the Genie back in the bottle. Once we go Global, which we have done, it may be impossible to revert. Decent story by Robinhood on the whole SVB saga HERE.
SVB was also the bank that housed 62% of the US community solar projects. This is a massive blow to clean energy initiatives in the US.
Many projects are looking towards the Biden Inflation Reduction Act to ease the pain. And yes, the Inflation Reduction Act will pretty much do the opposite of reducing inflation.
Tesla, Volkswagen, and XPeng are all competing to capture the low-cost EV market. XPeng is undercutting Tesla Prices in Europe. Tesla is slashing prices across the board. Volkswagen is spending $126B+ on its EV initiatives. Only time will tell who comes out on top but expect to see the price tags of EVs come down in the near
future.
Meta, Snap Chat and Google stocks are surging because investors are thinking that TikTok may actually get banned. Pres. Biden gave TikTok an ultimatum. Separate from owner ByteDance or get banned. The ball is now
in TikToks court. This has caused the techy Nasdaq to surge as well.
Let’s all give Wyoming a round of applause for being the first state to ban the use of abortion pills!! Thank you, Blessed Mother, for
your intercession and all the people who have been praying for the unborn. Christus Rex!
Your odds of filling out a perfect March Madness bracket is 1
in 9.2 quintillion. One quintillion is 19 digits long. Think those odds are crazy, famed Scientist Stephen Meyer claims in his book Signature in the Cell that “The odds of getting even one functional protein of modest length (150 amino acids) by chance from a prebiotic soup is no better than 1 chance in 10^164.”
Perfectly done Satire on the SVB collapse
