Banking Collapse, Silicon Valley Bank with Alfonso Peccatiello
Alf is Italian but is coming today from the Netherlands. He and Jason talk about some of the factors that contributed to the collapse of the Silicon Valley Bank, the largest bank failure since the 2008 financial crisis. They discuss the moral hazard involved, mismanaged portfolios and the lack of proper risk management- factors that culminated on the banks demise, making investors question whether this will spark a broader banking meltdown.
Key Takeaways:
0:00 Hope you enjoyed last episode
0:37 Listen to Jason’s “10 commandments of successful investing”: Thou shalt maintain control!
3:07 Housing inventory keeps falling- where’s the crash?
5:39 Almost 25% of mortgages are 3% or lower
6:49 On to our guest with a deep dive into the current banking crisis
7:44 Alf, coming from the Netherlands
8:33 3 Bank collapses; a summary of what really happened
12:12 US Banks loan-to-deposit ratios
14:35 Moral Hazard and a mismanaged portfolio
17:45 Big banks hedge interest rate risks- NOT SVB
20:58 Lax regulatory and accounting laws in the US for small banks
22:04 Who benefited from the collapse
23:06 Securities portfolio mix as of December 31, 2022; distinguishing between small and highly regulated banks
27:59 SVB ‘woke’ programs and the lack of proper risk management
29:09 Bank failures 2001 to 2023; are more bank collapses coming
30:26 At risk: the real estate market; unaffordable housing leads to more renters
33:20 Compared to what
36:12 The booming labor market
37:32 Credibility & central banks; Blackstone & KKR, Jerome Powell & Paul Volcker
42:55 There is no distressed homeowners
46:40 Institutional investors- what their capital stack or debt structure is like
48:01 Step up your macro game https://www.themacrocompass.com
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