Test of faith
The American Banking system is under stress
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16th March 2008 was when Bear Sterns was bailed out by J.P. Morgan in one of the biggest upsets in American banking history. Exactly 15 years later to the day, the Swiss National Bank was promising liquidity to another bank that is systemically important – Credit Suisse. With one of the most recognizable brands, Credit Suisse had over $1.5 Trillion in AUM at the end of 2021, and yet, in the last 15 years, it’s stock price has dropped by more than 95%! What’s going on here?
Last week, we saw the collapse of Silicon Valley Bank and Signature Bank New York (check out the complete story). But unlike SVB which had a liquidity crisis, Credit Suisse is in trouble for a host of other reasons – including lack of due diligence, scandal, bad business models, and new customers’ hesitancy to invest money with them. Check out this video for a deep-dive into Credit Suisse’s troubled past:
But Credit Suisse’s woes are just one in a series of miseries that the banking sector has been facing last week…
The Great American Bailout
The crisis is now under control, but new developments are unfolding every day. The Fed got a lot of praise this week for its swift action in repairing the SVB situation and instilling confidence in the banking system again – but there are others who think that policy is set based on precedent, and every bailout encourages bankers to be a little more reckless the next time. Here’s my take on all sides of the issue:
Do you think the bailouts are setting a bad precedent for banks? What other solutions do you think we should be looking at? Let me know in the comments.
Now that we’re done with the serious stuff, here are some lighter videos for you to check out with your cup of coffee.
The Graham Stephan show
The Graham Stephan Show crossed a million subscribers last week – thanks a lot for your support! As long as there are people who are reckless with their financial spending, I have no shortage of videos to react to. I wish I ran out of videos, I really do. But this week turned up some doozies, starting with this millennial who refused to pay taxes and had an excuse for every solution that Caleb Hammer threw at him. By the way, Caleb’s channel is so good! I just can’t stop watching his videos. Here’s another one I reacted to this week called “The millennial who refuses to save money.” (These episode names have the vibe of a late 90s sci-fi flick)
It’s no surprise that most Americans are living paycheck-to-paycheck. But did you know that even six figure salary earners are living this way? I was shocked by Jake Ferrin’s breakdown of how he burns through his $130,000 salary in a year, and this is a must watch to find out what you must not do:
On the other hand, there are parts of the world where a thousand dollars goes a long way. This man explored what it takes to live for $1,750 a month in Thailand. An eye-opening video, especially if you’re considering an alternative lifestyle or retirement.
Doctor’s advice
Doctor Mike has used his platform to reach millions of subscribers across different platforms, and educate them about the most dangerous medical advice that you need to watch out for. We had great fun interviewing Mike and learned a lot about simple ways to live a healthier life. My priorities are expanding to fit in health and fitness, and it’s something you need to consider too!
Twitter
If you’re not following my Twitter account, you’re missing out on my live updates on stuff as they happen, and a lot of other amazing content that I’m discovering on the platform. Be sure to check it out. And here’s a thread that went viral this week with over 1.8M impressions:
So that’s it for my Sunday round-up. For the new folks here, in this newsletter, I give a quick recap of whatever you may have missed over the week on Sunday over all my different channels, and on Wednesday, I will be doing my deep-dive article on one of these topics.
See you next week with another bunch of exciting videos!
And force of habit – Smash that like button to help others find this newsletter. Hit that subscribe button if you haven’t done so already!
I think this is a bad message to send banks. They can spend wildly and lend wildly and the government will bail them out and the CEO’s will get huge paydays regardless of performance. They need to let them fall. Isn’t this what Jerome Powell wanted with all the interest rate hikes?