Hello and welcome to the Wall Street Millennial Podcast. We're doing this emergency podcast today to address some of the recent events that have been happening in the markets. Uh, starting on Friday and then continuing again. Uh, today on Monday Um, so as you know, as you probably already know, Silicon Valley Bank Uh, the 16th largest bank in the U.S failed, failed over the weekend and was taken over by the FDIC and Uh, So today, what we want to do in this podcast is go over what happened and what it means for the rest of the stock market and specifically some some of the other banks that are under pressure.

So here's a timeline of what happened with Silicon Valley Bank Banks Collapse. So going into this year, Silicon Valley had a large number of Health maturity Securities on its portfolio. which basically means that they don't have to report the the mark to Market losses and gains on these Securities because they're supposedly planning on holding them until the Bonds mature. But anyway, because of the Fed's rate hiking cycle, these Health maturity Securities carried a 15 billion dollar unrealized loss at the beginning of this year.

Um, this was mainly driven by the increase in interest rates, but exacerbated also in terms of the bank by increasing customer withdrawals. um leading up to the collapse. So a Silicon Valley Bank is a little bit a little bit unique as as far as other Regional Banks and that most of its most of its customers are Tech startups and Venture Capital firms and other people involved in the Uh Silicon Valley Valley Uh startup Community Um so these people, these customers um uh started withdrawing a lot of their deposits in recent in recent weeks and months because in large part also because of increasing interest rates and that eventually caused a lack of liquidity in in addition to Silicon Silicon Valley Banks insolvency. So on Wednesday March 8th they announced a proposed stock sale in order to raise capital and raise liquidity in order to meet these deposits.

Uh, these withdrawal requests that Spooks the market and eventually led to a rent on the bank because when a when a bank announces a surprise stock sale, that's never a good sign. So on Friday CNBC reported that the bank failed to find a buyer and uh, obviously they're in big trouble at that point and also on that day the FDIC took control over Silicon Valley Bank because they had basically became become insolvent later that weekend. Signature Bank another Regional Bank Uh. Also, a very large Regional Bank also collapsed in that same day.

Many people think because there's no longer Just One Bank Um, the contagion was starting to spread. The U.S Treasury, Treasury and Fed unveiled their Uh measures to try to nip it at the Bud and cover all the SBB depositors. The FED also unveiled their Bank term funding program in order to prevent the same thing from happening at other Banks which basically the terms of this program were to allow allow Banks to post their um like treasury Securities as collateral for up to one year termed loans from the Federal Reserve in order to increase their liquidity and be able to meet deposits. This was an attempt to try to stop the effects of Bank runs going forward for other Banks and to prevent the contagion from spreading.

So that's a brief timeline of what happened over the past couple days. Obviously, a lot of laws happened and the markets are roiled and um so. But what's really important is what's going to happen going forward and what it means for especially some of the other things that we've seen Down 2030, even over 50 or 60 percent. Uh, just today.

Yeah, I Think it's really important to stay. take a step back and try to figure out what's going on because everything going back to the timeline. Everything happened so quickly. So March 8th That's the first announcement we got from Uh Svb saying that something is up.

Two days later the bank fails, right? and then two days after that another bank failed. Signature Bank So and then the next day they um announced the the US Treasury announces that they will cover all Svb deposits. um, not just up to the 250 000 threshold, but all of the deposits. and the FED also unveils this Bank term funding program.

So everything happened within the span of just a few days and whenever I guess this is um, a collapse of a 200 billion dollar bank is a big deal. so markets were obviously very concerned about that. Uh, there's been like a lot of comparisons drawn to the 2008 financial crisis. Are we at the beginning of another you know, disaster like that? That's what people are scared of.

Um, and we can really see the Panic set into the market. Um, just by looking at the share prices. So uh, here we have three lines on the chart. So this dark blue one is Silicon Valley Bank stock.

You see that after Marjay, it started tanking here. it was halted and delisted because now, um, it is bankrupt. And then this yellow line here is the ishares Regional Bank ETF And there's turquoise line at the top. This is the XLF financials ETF which is like the large cap.

um, the large cop thing. So think like City or JP Morgan Bank of America and whatnot, they are in the turquoise one in the smaller Regional Banks is the yellow one. So as we can see, the regional Banks um have decreased by 32 percent in the past month. while the large cap banks have only declined by 14 in the last month.

and I think there's probably a couple of reasons. Um, there's a couple of reasons for that. Uh, that the large cap hangs have outperformed the regional Banks One is the large um, the large cap Banks Most of them are deemed by the Federal Reserve to be systemically important financial institutions. That means that there's a greater level of scrutiny.

Every year, the FED does a stress test with them to make sure that their balance sheets can handle a liquidity. Crunch and they would still be able to um and they would still be able to honor all of withdrawal requests from their depositors. um the smaller Banks the regional banks that don't have as great of screwed as as great of scrutiny because they are not systemically important financial institutions. So Silicon Valley Bank was not a systemically important financial institutions.

They did not undergo these stress tests and that is one of the reasons I think that made them a bit more vulnerable and nobody really, you know The Regulators Didn't really know something was going on until it was too late. but you know we see the Panic setting into the market with the other Banks especially Regional Banks decreasing a lot in value. but I think it's important to look at um, what were the specific issues at Svb that caused it to collapse and um, are those same issues likely to affect other? Banks So here I have um some numbers from Sbb's balance sheet as of um, the end of 2022. so December 31st 2022.

That's the most recent Uh financial statements they had published and they had 211 billion dollars of total assets and 195 billion dollars of total liabilities. So which is um, the liabilities are the deposits as well as as well as some other borrowings. So if you take the assets minus the liabilities, that gets you the book value. So on their balance sheet, the reported Book value is 16 billion dollars, which is eight percent of their total liabilities.

So that eight percent of their Um, they had kind of an eight percent cushion. So they were a solvent. According to their financial statements, their assets were greater than their liabilities. However, as Ryan mentioned earlier, they had 15 billion dollars of unrealized losses on their health and maturity.

Securities And these numbers were not reflected in their reported Book value. Um, if you subtract those, uh, that 15 billion dollar loss Book value goes from 16 billion dollars down to one billion dollars. One billion dollars is only 0.6 of their liabilities. So here you can see the bank.

it was solvent but barely going into 2022 or going into 2023.. So they were sitting on a knife's edge. Um, and then as the Um as people started to get worried about that, uh, that's when you know we saw it unravel unravel very quickly. So uh, you have really had to a Confluence of two issues coming together.

First of all, they were in a very vulnerable position because of these unrealized losses. and second of all, um, their deposit base. Where it was, Um, mostly Tech startups and companies. Um, and there's two problems with that.

First of all, since it's you know, some tech company has a bank account with Svb. Chances are they have a few million dollars in the accounts or maybe tens of millions of dollars in account. I think for example, Roblox had uh, something like 150 million dollars, right? So if you have 150 million dollars in your Svb account and then the Federal Deposit Insurance only covers 250 000 dollars, That's like that 250 000 is nothing right? So uh, if you're a company, you're the CFO of some company and you have 100 million dollars in a bank and you think that bank is potentially going to be insolvent? Well, you want to withdraw money as fast as possible. And that's exactly what we saw.

um at Svb. Um I think the FDIC said 95 of Svb's deposits were not. We're not insured. Um, and that's because the vast majority of it was this very large accounts with with tens or hundreds of millions of dollars in it.

Um, so that got the deposit base of you know, the tech companies got very scared so they all started pulling their money out at the same time. Uh, in a classic bank owned scenario and that forced Svb to start selling off their assets. Um, uh, selling off their bond portfolio. recognizing these massive losses and then becoming insolvent.

That's why we have the collapse. Um, so now that that has happened, I think the next thing to look at is so these here is a bunch of regional Banks So these are all of the components of the ishares Regional Bank ETF and all of them have seen massive declines. so the minimum decline is 10 and the maximum decline is First Republic Bank here, which has declined 75 since the beginning of March Um so I had done some looking uh through these: Banks Uh, whether there's any deep value opportunities here and the main criteria is we need to find a bank that the share price has decreased a lot. it's making the valuation attractive, but at the same time the bank is in a solid financial position such that they're not going to end up collapsing like Svb did.

Um and through my research I found Western Alliance ban Corp um wal as being the best opportunity in my opinion. Uh, so for full disclosure: I um I bought a position um in Western Alliance Bancorp Um and this is not funny. this video is not Financial advice but we thought we would just go. um, just go through and and show you how we're thinking about things.

So Western Alliance Western Alliance Bancorp is a Regional Bank It's headquartered in Arizona and its branches are mostly in Arizona Nevada and California. So almost immediately after the S um Svb collapse began, the stock started tanking and it's now lost 65 percent of its value. kind of since this whole thing. Um, this whole episode started.

Now here: I have some selected numbers from Western Alliances balance sheet which is this is also as of December 31st, 2022. So the bank has total assets of 67 billion dollars. Um, they're about almost 68 billion dollars. They have 700 million dollars of Goodwill and they have 172 million dollars of unrealized losses on their held to Market Um Securities So if we subtract these two, we get our real tangible Book value of 67 billion dollars.

This is against total liabilities of 62 billion dollars. So their real book value and what I call real book value is Book value minus any unrealized losses. Um is four and a half billion dollars, which is seven percent of their total liabilities. Now remember Silicon Valley Bank At this same time period, Um, their their real tangible Book value.

it was only 0.6 percent of their liabilities. Western Alliance is seven percent. So what's Western Alliance is in a far better position um, financially than Silicon Valley was and on um on March 10th. So kind of this is on.

This is on this past Friday When the Silicon Valley was starting to blow up, they released this press release on their website trying to reassure the market um about their financial position and um, you can read this for yourself. it's on their website under press releases but I have also condensed the numbers they have here into this Excel here. So as of March 10th, 2022, their total deposits were 61.5 billion dollars of those deposits. eight billion dollars were from tech companies and life science companies.

So these are kind of the risky depositors those are. You know these are similar depositors to what Silicon Valley had Um causing Silicon Valley to collapse. But against these Um deposits, this is Western Alliances liquidity position. So they have 2.5 billion of cash, 13, a 13 billion dollar credit line uh with the federal Home Loan Bank of San Francisco 4.4 billion dollars of credit lines from other financial institutions, a five billion dollar credit line Um with the Federal Reserve Bank of San Francisco and then 5.3 billion dollars of unpledged available for sale marketable Securities And because they're available for sale, these are already marked to Market and then Um.

they also have 1.1 billion dollars of held to Market Securities Um. So they actually have like 1.3 billion of ultra Market Securities but I subtracted um 200 million for their Mark to Market losses. um which is which they disclosed in their prior Financial reports were 172 million. So I'm already subtracting the unrealized losses here.

so this gives them total liquidity. between the cash they have on hand, the credit lines they have available, plus the marketable Securities that they can sell um at fair value Um valued at fair value gets you 31.6 billion dollars of total liquidity. This is more than half of their total deposits, in far in excess of their Tech and life science related deposits. So you would need a serious Bank Run Um for Western Alliance to collapse.

And then on today on Monday March 13th they released another press release talking about their financial situation and they said some encouraging thing here. So they say as of this morning, cash reserves exceeded 25 billion dollars. So their cash reserves as of last Friday was two and a half billion. Now it's 25 billion.

So this is because they they drew down on all of those credit lines right? So they disclosed previously they had all these credit lines with the the Um San Francisco Federal Reserve and a few other institutions and so they were able to draw on those pedal lines. And now they have a a very large cash position which is the cash business and now is almost half of their deposits. They say deposit outflows have been moderate. Okay, well, moderate is a qualitative term.

Um, we don't really know what moderate means. Is it one percent of deposits have been withdrawn? Is it five percent? Ten percent? Fifteen percent? You know you could. You could say anything is moderate because it's just a matter of opinion. Um, but what's I think is important is insured deposits exceed 50 percent of total deposits.

And this is really important because remember, with Svb only five percent of their deposits were insured. The reason being because as we talked about earlier um, their depositors were tech companies and whatnot that had millions or tons of millions of dollars in deposits. But Western Alliance is more of a normal Bank um where a lot of their deposits are from individuals. Um, so an individual most likely isn't going to have more than 250 000 in their bank account so the whole thing will be uninsured.

They have some, you know, companies or maybe High net worth individuals. but overall fifty percent of their deposits are insured and if your deposits are insured, there's no reason for you to withdraw because even if the bank fails, um, you're protected. So this is I think a very encouraging sign in my personal opinion. I Think you know if these numbers that they're telling us are true I Don't see any way that any realistic way that Western Alliance could collapse.

um in a similar way to Svb because the the nature of their customers, the the position of their balance sheet is just just night and day and what? I think you know in a time of panic after the SV VB collapse. Uh, you know the the reaction from a lot of Um investors was sell first and ask questions later and I think that created a really attractive opportunity. Um with Western Alliance um with Western Alliance to buy up the shares at a two-thirds discount and in my opinion it looks like they're in a strong position to weather the storm. And I'm sure Western Alliance is not the only opportunity out there.

You see here, there's like a sea of red. All these Regional banks are tanking now. um I have not had the time to like go through and analyze every single one. I'm sure some of them are more vulnerable than others, but um, you know, as an investor I think if you just look through each one of these Banks um and you can try to, you know, look at the balance sheet, look at, you know what statements they've made, what the nature of their depositors are I mean you can probably find some some pretty good Bargains here.

So it brings up a question that I had. Was that like you know what? what is preventing and positive like what is what is the incentive for a depositor to stay at a bank like Western Alliance or First Republic in general like it is there really any cause for them to move to a JP Morgan or Bank of America which we know are seeing billions and billions of dollars of inflows because of this? Um, like why is why doesn't everyone just move? Well in the case of say Western Alliance 50 of the deposits are um, 50 of the deposits are insured, so if you're if you have less than 250 000, there's really no reason to move. Um, so it's not. That's not really an issue now as as far as the other 50 percent, the people who have Um, you know who who have more than 250 000 I think the reason why you would not move is because um, you know.

As we went on on the timeline, so the U.S treasury announced that it would cover all of the losses of Silicon Valley Banks depositors, even the uninsured deposits. Uh, given that that is the case that they bailed out basically Svb. Well, they didn't bail out the shareholders, they bailed out the depositors. given that they build out the depositors of Svb.

Um, one would stand to reason that they would probably bail out the depositors of a if another bank collapses in the future. So I think the the chance. From the depositor's perspective, even if you have more than 250 000. um, the chances of you actually losing anything are extremely low.

and um, there are costs to if you're a company and whatnot. there are costs to switching your bank account. you have to go through various procedures. Um was setting up a new bank account with all like the know your customer and such is just kind of a pain and takes some time to do.

um and also the large Banks the ones you know like the JB Morgan and Bank of America and whatever. they typically offer much lower yields. um on savings accounts for that very reason that they are perceived as being more safe so they can. Um, the it's easier for them to attract deposits so they offer lower savings rates on savings accounts than the smaller Regional Banks What provides an incentive an incentive for people who care about that savings yield to go with the regional Banks and then finally Regional Banks They often have more expertise in their region so they know the community better and that makes it kind of easier for them to give out loans and such within the community where like a large National Bank like Bank of America or whatever, they might not have expertise in that region so they would be less willing to lend to borrowers in that region that don't have as much of an established credit history.

While a regional bank with greater ex local expertise may be better at providing credit to people whose credit profile is more difficult to assess, so it's it can be advantageous as a local business to have a relationship with a local or Regional Bank that knows that area better so there is. there is some benefit to using a Regional Bank in some cases and I think the risk um is extremely low given the fact that Svb depositors are bailed out given the fact that the FED unveiled this uh the bank term funding program um which will Shore up liquidity and um and also given that in the case of Western Alliance their balance sheet appears to be in very good a very good position Now I think it's a one thing that's that's interesting. So the bank term funding program. um I Don't know if we meant we have gone over this already.

but the thing that's really um important about it is that so they offer loans to Banks of up to one year in length. and to get a loan under this program, you have to pledge. um U.S government bonds U.S treasuries as collateral. So you give them your your treasury bonds as collateral and they'll give you cash as a loan in return.

But what's really um important about this is that these assets will be valued at par. So it's valued at the face value of the bond. So the problem with Svb is they owned all these government bonds that the market value had decreased substantially over the past year as interest rates had Arisen. But the par value did not change.

Um, it's still the same par value. It's just the market value decreased because the interest rates went up. So had this program um, then in effect prior to Svb's collapse, Svb may not have collapsed because their Um going back to this thing, right? So this was their reported Book value of 16 billion dollars in blue. This was their unrealized losses, but they could have basically borrowed this 15 billion dollars from the FED had this program existed at that time and then they would have had the full 16 billion dollars of cash.

Um, and that would be enough to cover their withdrawals. You know they're going to have to pay back this unrealized loss to the FED after one year, but that gives them a whole year of Runway Um, to try to, you know, get some, um, just arrange some Capital injection. Uh, possibly sell a large Equity stake, um to another bank or maybe even arrange to sell themselves to another bank out of at a low price. But they at least would have had a year to figure it out, not 48 Hours as they had this time.

So I think that um, the the chances of another I mean there could be more banks that collapse. but the fact that this the Fed's new Um term lending facility uh will be I think a big help to a lot of banks that have unrealized losses on their balance sheet. You know, like that 15 billion dollar unrealized loss? Like theoretically if they help if they hold it to maturity, it will go to zero. right? Like I think Silicon Valley Banks Their average uh times of material is like five years or something.

so this would only give them one year. But you know theoretically the reason they're held to maturity is because the the um Mark to Market changes about in market value don't really matter if you are have the ability to hold them to maturity. Yeah, exactly. So you know if you if they could just go, you know but then say you uh, you want to withdraw money from your bank account and they say it'll just it's gonna take uh, five years to process that.

withdrawal. People aren't going to be too happy about that, But that is yeah. But that is the Crux of the problem, right? It's it's really an accounting thing where um I say oh, I intend to hold this thing to maturity. In which case, I get my par value back.

So I'm just going to Value it like that. but um, that presupposes that you have the ability to hold it to maturity. And they thought they did. Um, that's why they labeled them as held to maturity as opposed to available for sale.

But as it turned out, they did not have that ability. Um, in the results were disasters. Yeah, they usually expose themselves to way too much interest rate risk. You know, try to capture too much of a spread by uh, you know, borrowing, borrowing overnight, and lending.

You know, buying these long dated treasury bonds and that didn't work out for them? Yeah, and I think that's kind of a key difference with the the 2008 financial crisis because in the case of the Um. 2008 financial crisis, the issue was not. um, the interest rates. The issue was all the defaults of the mortgages, right? So all these Banks were facing massive defaults.

Um, and then that made them to go insolvent. In some cases, here, we don't have a defaults. problem. um, the default rates are are still quite low.

The problem is the interest rates, the massive unrealized losses on on the interest rates going up, and I think that's maybe part of the Um part of the consequences, right? Of all the inflation we have now, and the fact that the Federal Reserve had to increase interest rates so rapidly, that does cause a huge amount of unrealized losses. and a lot of banks are vulnerable so so don't get me wrong, I'm not saying that uh, everything is going to be fine Now There are still a lot of banks out there that have massive unrealized losses and have a very aren't a very precarious position because of that. Uh, the point I'm making is that um, not all banks have such massive unrealized losses. So it's I think um I think that you have to differentiate you know the the good Banks from the bad ones because anybody could have looked at Silicon Valley banks financial statements as of December 31st, 2022 um and seen that they were in, you know, a really bad position.

their their Book value was basically zero um which is not good, right? So anybody could have seen that, but people weren't really thinking about that. You know I guess investors got lazy. Um, didn't really think about these tail risks of what happens if all the depositors want your money and you have to recognize these massive losses. Um, and now you know kind of reality.

Came Crashing Down Like a ton of bricks and the management, it was a huge huge oversight by management to put themselves in this position right. I Thought Something that was kind of interesting was that the CEO of Silicon Valley Bank uh Greg Becker uh was also on the board of directors as a director on the Federal Reserve Bank of San Francisco So that kind of begs a question. like the management was not doing their job Risk: I Think they didn't have a risk officer on their Um at the bank for the past nine nine months before this, this collapsed and then you know it seems like The Regulators were made. could have done more to, uh, detect this and um, flag it before before the collapse actually happened.

Um well I guess from from a from a stock Trader Like investors point of view and uh, we'll say it again. this nothing in this is or nothing on our channel is ever investing advice and probably especially today. and with with this topic since there's so much volatility with stocks getting halted every few minutes today on things of that nature. but I think from the way I see the way I View: Um, thinking about buying some of these Regional Bank stocks and James let me know if I'm saying anything that you disagree with.

but there's basically kind of two outcomes, right? Either a bank has a bank running, can't meet their deposit, um, can't honor their deposits and they they fail, right? And as the stockholders get wiped out, the stock goes to zero or they survive. and at the end of the day, you know, maybe they have some long-term harm to their reputation, but they eventually recover to how what how they were before and their stock basically goes back to what it was before. So there's basically two outcomes. And when you have a situation like that, the percentage declined from before this entire entire Uh Silicon Valley collapse happen is basically in a market implied probability of those two potential outcomes, right? So if you see a for example, Western Alliance Bank Bancorp down 70 and that's basically saying that the market is implying a 70 chance that they're gonna, they're gonna fail and a 30 chance that they're gonna survive.

Um, Full disclosure: I I have a relatively small position I've been trading in and out of both Western Alliance and First Republic Um, but you know at the lows I think Western Alliance at one point was below eight dollars a share. Um, yeah, and it was seventy dollars a share before. Um Thursday So at its low, basically there was a market implied 90 probability of the bank not uh, not making it through this entire thing. Yeah, and I think yeah I think that's that's absolutely correct and I think that is.

It's a very extreme reaction. Um I think given everything we went over about the balance sheets, Um about the statements they put out saying that you know we have all these lines of um, we have all these credit facilities. Um and they were able to success. They were able to successfully draw down those credit facilities and now they have 25 billion dollars of cash on their balance sheet and 50 of their deposits are insured.

Um I mean that's it seems very difficult to say how you would get to a 90 probability of a failure. I would say it's more like a 10 probability of a failure. Uh, to be honest. um in my opinion of course.

But I think with these the the extreme volatility you know almost by definition creates opportunities. Um, because uh, you know, as they say, the Uh stock market is a voting machine in the short term, in a weighing machine in the long term. And if you can at least have some idea of you know, what is the probability that the band collapses? Uh, what is the the bank worth if it doesn't collapse? Um, and you have a pretty wide margin of error. Um, when the stock is swinging around so much and once it's down 90 if you think it's anything less than 90, you know, even if you think it's only 80 percent, well then you know it's still.

you know, Potentially unattractive by um, at eight dollars? Um, depending on your risk tolerance. So I think you know if you, if you have you know, a strong stomach, um and you you do your research um, and you are um, you know you have some money that you can afford to lose I think there are some really interesting opportunities. Yeah, and that is all in terms of expected return. Um right.

Like thinking about the probabilities and the the uh potential outcomes. uh, but obviously like you know the potential outcomes are you could lose all your money. So yeah yeah, because even even if it is, say I if I say it's a 10, say I think oh, it's a 10 chance that that Western Alliance collapses versus a 90 chance implied by the market. Um, at the lows of its Trading So even if you're right about that and it is only 10 chance, Well, a 10 chance can still happen so you can still lose all your money.

Um, but so that's why you have to be smart about you know the position sizing Knowing the fact that I mean I think you should prepare the any Bank in this environment um, could collapse right? With all the fears from depositors. um, it is. You know possible there's a non-zero probability that any Bank could go to zero. Um, you just have to say you know what is that probability and how much risk am I I willing to take because if the bank doesn't collapse, the upside can be enormous.

One one final thing that I that's kind of going through my mind: James I Want to see what you think about this idea? but um, it's probably also not a good idea to underestimate the Uh liquidity of the investing Market at this time either, right? Like over the past six months, people are the Market's taking. Especially certain sectors of the market have taken huge losses and maybe not as much now as like going into 2023. but you know, people are probably a lot of people are probably more risk-averse just by nature of um, huge losses that they are sitting in sitting on in other parts of their portfolios at this time, which can could probably contribute to the uh, violent volatility, especially downward whenever there's fears. Yeah, imagine that you're an investor and say maybe going into 2022, you were um, all in on on technology stocks and then you had had massive losses and then going into 2023, you say Okay um I need to lay off of these technology stocks and I'll instead go for banks which are a safer bet.

And then you see the banks are starting to collapse too. Then I think you would be extremely scared and um, you know, given the uh, you know, given the margin available, both because of their losses and because margin rates have basically quadruple a lot of brokerages. Yeah, so I think you know 2022 is a very bad year for the stock market and I Think to your point, that probably caused a lot of you know, psychologically, that has probably caused a lot of fear in the market. Um, everyone is sitting on their edge of their seats.

Um, seeing you know how much lower can we go and then the last thing you need is the 16th largest bank in the U.S collapsing you know? and then that really kind of um, you know that really kind of does it for you and you just gets so scared you want to pull out of everything and that's kind of yeah. And then that creates this mentality of cell first ask questions later which I think is what we've been seeing. um, with a lot of these Regional Banks But then you can also eventually lead to a huge rally when people, um, if things do start to get better and once it becomes clear, people will realize that that Dynamic is what's happening and not want to miss out. So you could probably stand back just as rapidly.

But yeah, the second and third largest bank failure in history with Silicon Valley and Signature Bank I believe Um, it's a you know people talk about like the FED raising rates until it's until something breaks I guess definitely qualifies as something breaking at this point. We'll see what they do at their next Open Market Committee meeting. but I would be surprised if they type rates as much as the 50 50 basis points that people have been expecting before. Friday Yeah, that's actually another good thing about these um uh, band collapses is that it might cause the FED to dial back on the rate hikes, which will be beneficial for for a variety of reasons.

Um, as far as you know, stock valuations? Yeah, we'll see. All right. So I think we are about running out of time? Um, but yeah it's It's a very interesting situation. Uh please let us know in the comments section below um what you're thinking about the current situation because these are very Dynamic times we're living in Um and if there is any further significant developments um with Silicon Valley Bank or other Banks or just in the stock market in general, we will do another podcast hopefully not an emergency podcast.

Yeah and yeah, just everyone. Make sure stay safe out there. No, this is investing advice. do your own work and be prepared to lose everything.

Um and uh, take care.