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What's Happening In The Banking World?

Should You Be Worried About Your Money, Your Bank, or the US Banking System?

The term “turbulent market” is often used to describe an environment in which the value of securities is highly volatile and difficult to predict. These markets are characterized by sharp and sudden fluctuations in prices, often driven by economic, political, or other external factors. In such an environment, investors may be hesitant to invest or may experience significant losses, but there are also opportunities for those who are willing to take on risk.

Silicon Valley Bank and Signature Bank

The two banks we are talking about, Silicon Valley Bank and Signature Bank focus on riskier investments like crypto and tech startups. It is unlikely that this will become a problem for many banks. In 2008, too much bad lending caused a housing bubble and when people couldn’t pay their mortgages, the banks had to deal with trillions of dollars in bad investments. Now there are more rules in place like higher capital requirements and yearly stress tests which makes the banks safer.

Federal Reserve is Partly Responsible

The Federal Reserve is partly responsible for the recent bank failure in two ways. Firstly, their relentless pursuit of lower interest rates and looser monetary policy, putting too much capital into the system both during the covid-19 pandemic and Build Back Better Act. During this time of capital expansion most banks saw a 30% increase in deposits and not enough places to lend the funds. This growth in deposits was described to me by a prominent local lender as unprecedented, not ever seen in banking history. Many banks bought government bonds at 3% which was a good return at the time. These bonds had a caveat attached namely “hold till maturity.” This means these bonds cannot be cashed in until the maturity date stamped on the bond. Once the Fed raised rates and raised them quickly, some lenders retained too many of these 3% “hold till maturity bonds.” This would still be ok until depositors got worried and began quickly moving money out of the bank.

Federal Reserve’s Job Has Now Been Complicated

These two banks have significantly increased the difficulty of the Federal Reserve’s job. With banks struggling, the Fed is tasked with preventing a further financial crisis while also attempting to provide enough support for the banking system, at the same time trying to cool off the overheated economy and inflation. This requires a delicate balancing act of addressing both short-term concerns while still providing long-term stability and sustenance. Unfortunately, this is a difficult task given the unprecedented economic environment, but the Fed and the U.S. government is promising to help the American banking system can survive this difficult time.

Opportunities Created by Turbulent Markets

One opportunity that exists in turbulent markets is the potential for significant returns. However, this requires a certain degree of skill and knowledge, as well as a willingness to take on risk. It is important to have a clear understanding of market conditions, as well as the underlying factors that are driving prices.

Turbulent markets can also present opportunities for long-term investors who are willing to take a contrarian approach. In such an environment, prices may be driven by fear and emotion rather than underlying fundamentals. As a result, there may be opportunities to buy quality securities at a discount. However, it is important to conduct thorough research and analysis to ensure that the securities are undervalued rather than simply experiencing a temporary dip.

Will the Shortage of Housing Units Help Correct the Economy and US Banking?

The real estate market has been facing a significant shortage of housing in recent years, particularly in urban areas and metropolitan regions. This shortage has been driven by a range of factors, including demographic shifts, regulatory barriers, and economic trends.

Drivers of Housing Shortage

  • One of the primary drivers of the housing shortage is demographic change. The open borders policy has been allowing over two million “Known” migrants into the U.S. This does not factor those migrants who went undetected. The population in many urban areas has been growing rapidly in recent years, driven by an influx of younger workers and migrants. This growth has put pressure on the housing market, as demand has outstripped supply.

  • Another key factor contributing to the housing shortage is regulatory barriers. In many areas, zoning laws and other regulations have made it difficult to build new housing units. These regulations often restrict the height and density of new buildings, limit the use of land for residential purposes, and impose strict building codes that add to the cost of construction. Additionally, local NIMBYism (Not in My Backyard) can create opposition to new housing developments, further impeding construction.

  • Economic trends have also played a role in the housing shortage. The global financial crisis of 2008 led to a significant decline in new construction, as many builders went out of business or scaled back operations. Then right when building began to get started back to a recovery trend, the covid-19 global pandemic shuttered businesses and the economy enough to cause massive supply chain disruptions. This supply chain disruption became a major driver of price increases and then massive inflation which the Fed is attacking through interest rate hikes.


It has yet to be seen what whether the housing market will add value to help correct the turbulent financial markets. The shortage itself will keep demand steady which could give the financial markets footing to stabilize. The reality is people need to wear clothing, eat food, and live in houses…these basic truths are constant in the marketplace. So, keep your head up and march on.


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