Silvergate, Silicon Valley, Signature Banks Collapse. No Bailouts, Deposits Backed
Just Human’s and Joe Lange’s take…
Mentioned by Just Human in his podcast above:
March 12, 2023
What is contagion?
by JOE LANGE
CONTAGION
KEY TAKEAWAYS
• A contagion is the spread of an economic crisis from one market or region to another and can occur at both a domestic or international level.
• Because markets are interdependent, events in one market can impact other markets.
• When markets are robust, this can buffer negative economic shocks; when markets are fragile, it can magnify negative shocks, like the spread of a disease.
• Usually associated with credit bubbles and financial crises, contagions can be manifested as a crash in one market leading to a crash in other markets
People do not grasp the implications of last week.
Wednesday Silvergate, a crypto bank went under.
Friday SVB went under within a day.
But people don’t understand how centralized the entire global banking system is.
We are not witnessing a couple of corrupt banks going under.
The corrupt ones are the weak link in the chain and collapse first.
But there’s a bigger bank about to go under that will make it very clear that we are seeing the debt system imploding.
Credit Suisse is on the verge of being next.
If that happens the dominos will fall fast.
Governments will print money like crazy to try to save the system but it’s in a death spiral.
I don’t like to be the bearer of bad news but we are witnessing what many of us have been warning is coming.
We are at the beginning.
For those that have a trading account and are using margin, you are at risk of losing because you don’t own the stock when you use margin.
All debts get paid.
The world is drowning in debt and the bill has come due.
A new system is coming my friends but the system must be cleansed first.
Counterparty risk is a huge deal.
People don’t understand that it is the thing that causes contagion.
While people see the SVB collapse as going to lead to other banks collapsing but it’s far worse.
What people don’t realize is this.
Silicon Valley Bank was the bank for a lot of tech start up companies.
Those companies just lost all their money in that bank collapse and they too are now broke.
Thousands of these businesses won’t be able to pay employees and stay in business.
For every bank that fails, everyone tied to that bank loses.
Companies keep far more in banks than the 250,000 that is FDIC insured. Do you see their risk now?
We have not seen panic selling in the market yet but we are on the verge.
In a few more hours we shall see what the pre market numbers are looking like.
I’ll try to give an update then.
A huge bank is about to go under in Europe.
Credit Suisse.
If it goes Deutsche bank goes right after
At that point the dominoes fall rather quickly.
As the market futures came online they are up because the government announced a plan to save the uninsured depositors at Silicon Valley Bank.
Problem?
How many banks can you save?
This breaking news just hit:
Signature Bank in New York just went broke.
It is going to be really interesting to see how this plays out.
Did you hear they are using the Exchange Stabilization Fund?
Used to be the Fed slush fund.
“The Treasury Department is providing up to $25 billion from its Exchange Stabilization Fund as a backstop for any potential losses from the funding program.”
Monday, March 13
Here’s what’s really interesting this morning.
Last night when the market futures came online the DOW was up over 300 and now is down over 200 points. That’s a negative swing of 500 points. Same thing happened with the S&P.
Nasdaq up some probably because the tech stocks are getting bailed out at SVB but I bet it gives it up too and goes negative.
What’s really interesting is that China’s market is up pretty good which doesn’t make sense given how the entire global banking system is centralized but they have insulated themselves a lot by what they have done through BRICS.
Today will be interesting and I have a feeling more big red pills are going to drop.
Watch Credit Suisse and Deutsche Bank.
Also keep your eye on Japan.
Europe taking a beating!
Watch Credit Suisse and Deutsche bank.
They can only temporarily stop what is ultimately coming but the reason for stopping trading on a stock is to me evidence the game is rigged and always has been.
The big boys on Wall Street trade with much more volume then us little people and what people don’t know is that there is a lot of trading by those big boys using algorithms.
These algorithms are set and when there is big selling it hits these automatic triggers by the big boys to sell big volume causing a cascade effect with no buyers in sight.
They stop trading in my opinion in order to recalibrate those algorithms and hopefully slow down the pace of selling.
It’s their only hope.
Someone sitting in a stock with big shares is not going to stay in when he sees huge shares selling and the buying price drop like a rock.
These banks that stopped trading were the panic I’ve been warning people is coming that we had not seen yet in the market.
It’s everyone running for the door at the same time.
We will see it in the overall market before too long in my opinion.
