DID YOU KNOW? Anyone who believes emotion and herd-mentality-panic are not important in business, look no further than the demise of Silicon Valley Bank. Customers of SVB were withdrawing their deposits beyond what it could pay using its cash reserves, and so to help meet its obligations the bank decided to sell $21 billion of its securities portfolio at a loss of $1.8 billion. (SVB had about 55% invested in fixed-income securities, such as U.S. government bonds). The drain on equity capital led the lender to try to raise over $2 billion in new capital. The call to raise equity sent shockwaves to SVB’s customers, who were losing confidence in the bank and rushed to withdraw cash. A bank run like this can cause even a healthy bank to go bankrupt in a matter of days, especially now in the digital age. Expect any reduced regulation to be reinstated soon.....as well as new 'insurance fees'....? If you can insure a $2 million home, surely you should be able to insure a $2 million deposit...for a fee?
DID YOU KNOW? JPMorgan Chase, Bank of America, Citigroup and Wells Fargo will each deposit $5bn into First Republic, a California-based lender. Goldman Sachs and Morgan Stanley will put in $2.5bn apiece while BNY Mellon, PNC Bank, State Street, Truist and US Bank are depositing $1bn each. (FT)
DID YOU KNOW? More than 170 trillion plastic particles weighing roughly 2 million metric tons are afloat in the world’s oceans, according to new research. Aside from polluting our beaches, seabirds, whales, fish and turtles mistake plastic waste for prey; most then die of starvation as their stomachs become filled with plastic. Fish and other seafood products provide vital nutrients for more than 3 billion people around the globe and we hear microplastics may not be good for humans to digest either.....
DID YOU KNOW? As predicted, the current banking issues will trigger a realization that the Fed has gone too far too fast: in just a day, the average rate on the popular 30-year fixed mortgage dropped to 6.57% yesterday.... (CNBC)
DID YOU KNOW? If flight costs are 20% higher than they were in 2019, that equates to price inflation of around 5% per year….