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Scholars Corner: Biggest Lessons to Learn from SVB & Signature Bank Collapse · Earn Your Leisure

• 0:00
  Speaker 1: An illegal alien from Guatemala charged with raping a child
• 0:03
  Speaker 1: in Massachusetts. An MS thirteen gang member from Al Salvador
• 0:07
  Speaker 1: accused of murdering a Texas man of Venezuelan charged with
• 0:11
  Speaker 1: filming and selling child pornography in Michigan. These are just
• 0:15
  Speaker 1: some of the heinous migrant criminals caught because of President
• 0:19
  Speaker 1: Donald J. Trump's leadership. I'm Christy nom the United States
• 0:23
  Speaker 1: Secretary of Homeland Security. Under President Trump, attempted illegal border
• 0:28
  Speaker 1: crossings are at the lowest levels ever recorded, and over
• 0:31
  Speaker 1: one hundred thousand illegal aliens have been arrested. If you
• 0:35
  Speaker 1: are here illegally, your next you will be fined nearly
• 0:39
  Speaker 1: one thousand dollars a day, imprisoned, and deported. You will
• 0:43
  Speaker 1: never return. But if you register using our CBP home
• 0:46
  Speaker 1: app and leave now, you could be allowed to return legally.
• 0:50
  Speaker 1: Do what's right. Leave now. Under President Trump, America's laws,
• 0:55
  Speaker 1: border and families will be protected.
• 0:57
  Speaker 2: Sponsored by the United States Department of Homeland Security.
• 1:00
  Speaker 3: The first thing that we have to talk about is
• 1:02
  Speaker 3: the biggest thing that has happened last week, Silicon Valley
• 1:06
  Speaker 3: Bank collapsed. We'll give some some preference on this, but
• 1:11
  Speaker 3: this is the second bank to collapse in a week,
• 1:17
  Speaker 3: one of the biggest bank crisises in American history. Yep,
• 1:24
  Speaker 3: and this was the biggest bank to fail since two
• 1:26
  Speaker 3: thousand and eight. What pretty much caused it, at a
• 1:29
  Speaker 3: very high level explanation is they didn't have enough money,
• 1:34
  Speaker 3: so they over leveraged themselves. You know, when when the
• 1:37
  Speaker 3: Fed raised interest rates, they were invested in bonds and
• 1:41
  Speaker 3: mortgage backed securities that didn't work out for them, actually
• 1:44
  Speaker 3: lost money, and they announced that they needed two billion
• 1:48
  Speaker 3: dollars to remain solvent. When they announced that they needed
• 1:51
  Speaker 3: two billion dollars to remain solvent, there was a rush
• 1:54
  Speaker 3: on the bank. Obviously, people were scared, like money, my money.
• 1:58
  Speaker 3: They didn't have enough, so then the fdi C has
• 2:02
  Speaker 3: to step in, and now they're working through that. They
• 2:05
  Speaker 3: said that everybody that has was fdi C insured will
• 2:07
  Speaker 3: have their money, well had their money today, and then
• 2:11
  Speaker 3: everybody else they're working on within the next week. So
• 2:14
  Speaker 3: it was a very in this bank. A lot of
• 2:16
  Speaker 3: people have not heard of, but it's one of the
• 2:17
  Speaker 3: biggest banks in America eight I think it's eighteenth biggest
• 2:19
  Speaker 3: bank in America or something like that around that. So
• 2:23
  Speaker 3: it was geared towards Silicon Valley, right, it was geared
• 2:26
  Speaker 3: towards startup companies and benture capital firms, and these are
• 2:29
  Speaker 3: the places where these guys went to borrow money and
• 2:33
  Speaker 3: to get capital from. So it's not like a regular
• 2:36
  Speaker 3: bank where you just go in like Chase Bank and
• 2:37
  Speaker 3: you just put one hundred dollars and open an account.
• 2:40
  Speaker 3: But you know, it's it's one of these things that
• 2:43
  Speaker 3: that was disturbing and the causes you know, eyebrowns every raised.
• 2:48
  Speaker 3: So yes, so all right, so what's the impact on
• 2:51
  Speaker 3: this going forward? What's the impact on the stock mar
• 2:54
  Speaker 3: because all the bank stocks lost money as a as
• 2:56
  Speaker 3: a result of this, so it was like a ripple effect.
• 2:59
  Speaker 3: So what's the take on this SVB situation?
• 3:03
  Speaker 4: We I talked about it at the live show. But
• 3:05
  Speaker 4: risk to reward means everything. So if I came to
• 3:07
  Speaker 4: anyone and said, hey, I'm going to loan out money
• 3:10
  Speaker 4: to start up companies that have between one hundred one
• 3:13
  Speaker 4: to one hundred employees, the net margin is anywhere from
• 3:17
  Speaker 4: three percent to fifteen percent, and I'm going to try
• 3:20
  Speaker 4: and offset it by investing in bonds and mortgage backed securities.
• 3:23
  Speaker 4: Instant fail like this is the worst business plan ever
• 3:27
  Speaker 4: and they're over capitalized. We'll talk about it later, but
• 3:30
  Speaker 4: I think the ANGEL and VC environment has to change
• 3:32
  Speaker 4: dramatically because they're funding all of these companies.
• 3:36
  Speaker 5: Think about I mean just want to add to you
• 3:38
  Speaker 5: what you're saying for because that's a great point when
• 3:40
  Speaker 5: we think about the time period of when these loans
• 3:42
  Speaker 5: are taking place.
• 3:43
  Speaker 2: Yeah, low interest.
• 3:44
  Speaker 5: Rates, right, so hero right, we're talking about the lowest
• 3:47
  Speaker 5: interest rates. And if we've watched the market, right, we've
• 3:50
  Speaker 5: seen what interest rates being raised has done to tech companies. Right,
• 3:54
  Speaker 5: So think about now when you have low interest rates
• 3:57
  Speaker 5: and you're giving loans to tech companies, when of those
• 3:59
  Speaker 5: interest rates rights, there's going to be an inverse effect.
• 4:02
  Speaker 2: I started losing, right.
• 4:03
  Speaker 5: So like the pandemic, we saw all these startups, right,
• 4:05
  Speaker 5: we saw all these these companies IPO, we saw a
• 4:07
  Speaker 5: bunch of SPACs. Pandemic is over in the past. Yeah,
• 4:12
  Speaker 5: interest rates have risen. Now it's not you're starting to
• 4:16
  Speaker 5: see these these these effects. Obviously we see it from companies,
• 4:19
  Speaker 5: but now you see it from a bank. It's like yo,
• 4:21
  Speaker 5: here it comes right. These are delayed reactions to some
• 4:24
  Speaker 5: of these decisions like the Federick getting raised. It's like, oh,
• 4:26
  Speaker 5: it sounds great. Always a quarter point, always, three quarters
• 4:29
  Speaker 5: of a point always. I mean it's like after a while,
• 4:32
  Speaker 5: it's like, wait, what is the long term effect?
• 4:35
  Speaker 2: Chris? We don't see it in the short term.
• 4:37
  Speaker 4: I mean, and they're swooping under the rug. I said it,
• 4:39
  Speaker 4: but I think it's interesting. They announced this news the
• 4:42
  Speaker 4: weekend of the oscars. So now you see Brad Pitt
• 4:46
  Speaker 4: hopefully you know nobody gets slapped on stage, right. They're
• 4:49
  Speaker 4: going to recover it again on Monday about what happened.
• 4:51
  Speaker 4: But so you're kind of swooping it under the rug
• 4:53
  Speaker 4: to soften the blow post announcing midweek or Friday morning.
• 4:58
  Speaker 4: Then on top of that, yelling ha announced that the
• 5:00
  Speaker 4: government is not going to build the bank out. Oh
• 5:04
  Speaker 4: so the long term effects is like a lot of
• 5:06
  Speaker 4: banks are going to go under any it sets up
• 5:08
  Speaker 4: for JP, Morgan, Bank of America, the Big four to
• 5:11
  Speaker 4: become even bigger.
• 5:12
  Speaker 5: Right, because you think in terms of like, yeah, there's
• 5:16
  Speaker 5: money there people who are insured, but you're going about
• 5:19
  Speaker 5: to lose all those customers.
• 5:20
  Speaker 2: Yes, and so if you're losing customers, they're gonna have
• 5:22
  Speaker 2: to go somewhere and you need safety.
• 5:24
  Speaker 4: I mean, people was telling me earlier, like it was
• 5:27
  Speaker 4: some memes going around about risk mitigation, Like the risk
• 5:29
  Speaker 4: management team was like throwing water at a fire that
• 5:32
  Speaker 4: sort of thirty third floor and he's throwing water on
• 5:34
  Speaker 4: the first floor. It's like all of these companies that
• 5:37
  Speaker 4: got funded, most of them weren't even profitable. Like if
• 5:42
  Speaker 4: you look even at the acquisition of Slack, and this
• 5:44
  Speaker 4: won't affect the tech like Microsoft matter, it won't affect them,
• 5:48
  Speaker 4: but like smaller companies that are getting started, it's gonna
• 5:50
  Speaker 4: affect them dramatically. But even take Salesforce paying two billion
• 5:54
  Speaker 4: for Slack, and then the team of Slack, the management
• 5:58
  Speaker 4: team wasn't using Slack teave and communicate on a day
• 6:00
  Speaker 4: to day basis. They was using what's happened telegram Like
• 6:04
  Speaker 4: it was just insane. And I hate to say it,
• 6:06
  Speaker 4: but this is like the leaning of this generation.
• 6:10
  Speaker 2: Yeah, and it's tech driven.
• 6:12
  Speaker 5: I mean, the unfortunate part is that some many startups
• 6:15
  Speaker 5: do employ people, right, and so now if the company,
• 6:18
  Speaker 5: if the bank is dissolved, the right thing about the
• 6:21
  Speaker 5: payroll of those people who are to make pyroll.
• 6:23
  Speaker 2: It's over.
• 6:24
  Speaker 4: Hopefully a bridge, loan or something will be given, but no,
• 6:27
  Speaker 4: it's going to be over and we have to be
• 6:29
  Speaker 4: very honest like when things earners.
• 6:32
  Speaker 2: What's up?
• 6:33
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• 6:36
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• 6:40
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• 6:47
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• 7:00
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• 7:07
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• 7:42
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• 8:17
  Speaker 6: P and C Bank National Association Member FDIC.
• 8:22
  Speaker 1: An illegal alien from Guatemala charged with raping a child
• 8:26
  Speaker 1: in Massachusetts. An MS thirteen gang member from Al Salvador
• 8:30
  Speaker 1: accused of murdering a Texas man of Venezuelan charged with
• 8:34
  Speaker 1: filming and selling child pornography in Michigan. These are just
• 8:38
  Speaker 1: some of the heinous migrant criminals caught because of President
• 8:42
  Speaker 1: Donald J. Trump's leadership. I'm Christy nom the United States
• 8:46
  Speaker 1: Secretary of Homeland security. Under President Trump, attempted illegal border
• 8:51
  Speaker 1: crossings are at the lowest levels ever recorded, and over
• 8:54
  Speaker 1: one hundred thousand illegal aliens have been arrested. If you
• 8:58
  Speaker 1: are here illegally, you you will be fine nearly one
• 9:02
  Speaker 1: thousand dollars a day, imprisoned and deported, you will never return.
• 9:07
  Speaker 1: But if you register using our CBP home app and
• 9:10
  Speaker 1: leave now, you could be allowed to return legally. Do
• 9:13
  Speaker 1: what's right, leave now. Under President Trump, America's laws, border
• 9:18
  Speaker 1: and families will be protected.
• 9:20
  Speaker 2: Sponsored by the United States Department at Home Mad Security.
• 9:23
  Speaker 2: Everything was right, And I said it before.
• 9:25
  Speaker 4: They're gonna let us get money in twenty twenty for
• 9:27
  Speaker 4: the disaster that's going to come. You have to check
• 9:29
  Speaker 4: the financial soligncy score of your bank. That just mean
• 9:33
  Speaker 4: is your bank have a high probability of going broke?
• 9:37
  Speaker 4: Google it called them up acting with the scores. If
• 9:39
  Speaker 4: they won't tell you what the score is, probably should
• 9:41
  Speaker 4: take your money out.
• 9:43
  Speaker 2: Yeah. Yeah.
• 9:44
  Speaker 3: And then also what we talked about on stage yesterday,
• 9:47
  Speaker 3: well stage Saturday, about this is that.
• 9:51
  Speaker 2: There's a few different lessons here.
• 9:52
  Speaker 3: So this was a bank where most institutions had their money,
• 9:55
  Speaker 3: not retail investors, but retail investors can still learn from this, right,
• 9:57
  Speaker 3: Whereas a lot of people historically, especially in our community,
• 10:02
  Speaker 3: they're like, well, I don't trust investments, I don't understand
• 10:05
  Speaker 3: investing to I'd rather just put my money in a
• 10:08
  Speaker 3: bank because it's safe. And the crazy thing about that
• 10:10
  Speaker 3: philosophy is that banks invest your money. Yes, right, So
• 10:16
  Speaker 3: this was like I said, the reason why this bank
• 10:18
  Speaker 3: failed is that their investments didn't work out for them.
• 10:20
  Speaker 3: But the overarching lesson here is that banks invest your money.
• 10:25
  Speaker 3: So you putting money in a bank account saying that
• 10:28
  Speaker 3: you don't want to invest. It's crazy because the money
• 10:31
  Speaker 3: that you're putting in the bank account is actually using.
• 10:33
  Speaker 2: Your capital to invest. Right.
• 10:35
  Speaker 4: And this is the crazy part that we're using the
• 10:36
  Speaker 4: active customer deposits as soon as they came in.
• 10:39
  Speaker 2: You're trying to offset the losses. We just fraud. We've
• 10:42
  Speaker 2: said this plenty of times.
• 10:43
  Speaker 5: Just like you go to the bank and you ask
• 10:44
  Speaker 5: for five thousand dollars, we got to call it before
• 10:47
  Speaker 5: a tenth, You got to call it before. Most people
• 10:49
  Speaker 5: think like, yo, the bank has they should have the money, right.
• 10:52
  Speaker 2: But this is the reason.
• 10:53
  Speaker 5: Because it's actively being put out to use as a
• 10:56
  Speaker 5: tool and.
• 10:57
  Speaker 4: Unfortunately, it's gonna be a squeeze on regional banks with
• 11:00
  Speaker 4: a smaller bank and Midwest I'm from man, those risk
• 11:05
  Speaker 4: controls are going to get tightened. Long parameters are going
• 11:08
  Speaker 4: to get tightened. I feel bad for like small business owners,
• 11:10
  Speaker 4: like they're not going to be able to loan that
• 11:12
  Speaker 4: money as easily. And according to what Dave was saying,
• 11:15
  Speaker 4: it's a big crash coming yea, yeah, yeah pretty soon,
• 11:18
  Speaker 4: So those regulations are going to get even tighter.
• 11:21
  Speaker 5: I was listening to the Fat Joe and he was
• 11:23
  Speaker 5: talking about how he shout the fact jo Joey. He
• 11:25
  Speaker 5: was talking about how he, you know, he banks with
• 11:27
  Speaker 5: a regional bank. You know, if he had three million
• 11:30
  Speaker 5: dollars and they only showing two hundred and fifty, what
• 11:33
  Speaker 5: they're gonna do with the rest of my money?
• 11:34
  Speaker 2: He talked about that.
• 11:35
  Speaker 5: As far as this is concerned, yeah, yeah, not saying
• 11:37
  Speaker 5: that he was an invested in she's saying he giving
• 11:40
  Speaker 5: commentary for commentary on SBB on Instagram.
• 11:43
  Speaker 2: Yeah yeah, yeah, he did a live about it. I
• 11:44
  Speaker 2: was like, I'm gonna check that out.
• 11:46
  Speaker 5: That's that's interesting because I'm like, yo, yo, Joey, like
• 11:48
  Speaker 5: he knows like he stopped in.
• 11:49
  Speaker 2: He'stopped.
• 11:51
  Speaker 3: Sometimes he saw us who a political figure was who
• 11:53
  Speaker 3: I didn't even recognize.
• 11:54
  Speaker 5: He's like, yo, guys, I'm teaching yat yo, at least
• 11:57
  Speaker 5: you should know these things. I'm like, yo, bro, you
• 11:58
  Speaker 5: know we tapped in, but he stapped in. So what
• 12:01
  Speaker 5: I heard this commentary on, I'm like, yo, that's important
• 12:03
  Speaker 5: because even like when we were saying like yeah, and
• 12:05
  Speaker 5: I know people like I don't have two hundred and
• 12:07
  Speaker 5: fifty thousands, but at some point, like you may start
• 12:09
  Speaker 5: a business and it may gross that and if your
• 12:11
  Speaker 5: business that amount is insured. But yeah, what happens to
• 12:14
  Speaker 5: the rest? Even if you had five thousand. It's not
• 12:16
  Speaker 5: a well known bank. Have you ever logged into your
• 12:19
  Speaker 5: account and your account was short or over?
• 12:22
  Speaker 4: Money is being actively switched, And I know they'll say
• 12:24
  Speaker 4: it's a bank in air, but this is happening too much.
• 12:27
  Speaker 4: Banks are going through a huge issue of not having
• 12:30
  Speaker 4: enough liquidity, and with every market, every market is tied
• 12:33
  Speaker 4: together NFT crypto stop market mutual funds. Like even people
• 12:38
  Speaker 4: who thought they had mutual funds through SVB called and
• 12:42
  Speaker 4: SVB owned a mutual fund, was not in your name,
• 12:46
  Speaker 4: not had I did that to y'all. Boy, y'all would
• 12:48
  Speaker 4: have my head right. So you have to be careful
• 12:51
  Speaker 4: a monitor who you're banking with. And it's the funny part,
• 12:55
  Speaker 4: like the guy who ran that bank was involved in
• 12:58
  Speaker 4: another bank crash. So going back to the fundamentals of
• 13:02
  Speaker 4: like knowing the founder or who's running the company and
• 13:04
  Speaker 4: what kind of intemporary they do or don't have, will
• 13:07
  Speaker 4: decide what kind of actions that are taking. And I
• 13:09
  Speaker 4: won't even mention Wells Fargo and other banks that introduce
• 13:14
  Speaker 4: the scamming come on.
• 13:16
  Speaker 3: And then also it's important to understand we talked about
• 13:18
  Speaker 3: this yesterday too. You got to diversify. You shouldn't put
• 13:21
  Speaker 3: all your money in just to think. And this is
• 13:25
  Speaker 3: why investing is important, because you should have emergency funds.
• 13:30
  Speaker 3: That's important. But at a certain point you got to
• 13:33
  Speaker 3: start diversifying. So whether it's in stocks, whether it's in
• 13:36
  Speaker 3: real estate, whether it's in you know, private equity, putting
• 13:39
  Speaker 3: money into different other businesses. You got to start thinking
• 13:42
  Speaker 3: strategically like how where can I put this money?
• 13:45
  Speaker 2: Now?
• 13:45
  Speaker 3: You just don't want to put money into something that's
• 13:47
  Speaker 3: going to lose money because that's not beneficial. But now
• 13:50
  Speaker 3: you have to actually start playing the game. It's like Monopoly.
• 13:53
  Speaker 3: When you don't win Monopoly by just having the most money.
• 13:56
  Speaker 3: You win Monopoly by having the hotels or the houses,
• 14:00
  Speaker 3: because then when they land on your hotel, your house,
• 14:02
  Speaker 3: then they have to pay you, right, And that's how
• 14:03
  Speaker 3: you actually win Monopoly. Because I've won Monopoly two times
• 14:06
  Speaker 3: in the last two weeks, and the Monopoly Champions playing well,
• 14:11
  Speaker 3: I beat my dad. It was my dad, my niece,
• 14:13
  Speaker 3: and my son. And then the other time it was
• 14:16
  Speaker 3: it was my niece, my son, and my sister.
• 14:19
  Speaker 2: Gotcha.
• 14:20
  Speaker 5: I'll give you the first one because your dad is legit,
• 14:23
  Speaker 5: you know, disrespect the second one.
• 14:25
  Speaker 2: Okay, one question. I got strategy. There's all types of
• 14:28
  Speaker 2: different rules you can do. It's all about strategy, all right.
• 14:35
  Speaker 6: My graduates from my school being forced back drop drop,
• 14:41
  Speaker 6: Mike drop back drop.
• 14:43
  Speaker 1: Drop, an illegal alien from Guatemala charged with raping a
• 14:57
  Speaker 1: child in Massachusetts and MS thirteen gang member from Al
• 15:01
  Speaker 1: Salvador accused of murdering a Texas man of Venezuelan charged
• 15:05
  Speaker 1: with filming and selling child pornography in Michigan. These are
• 15:09
  Speaker 1: just some of the heinous migrant criminals caught because of
• 15:13
  Speaker 1: President Donald J. Trump's leadership. I'm Christy nom the United
• 15:17
  Speaker 1: States Secretary of Homeland Security. Under President Trump, attempted illegal
• 15:21
  Speaker 1: border crossings are at the lowest levels ever recorded, and
• 15:25
  Speaker 1: over one hundred thousand illegal aliens have been arrested. If
• 15:29
  Speaker 1: you are here illegally, your next you will be fine
• 15:32
  Speaker 1: nearly one thousand dollars a day, imprisoned and deported, you
• 15:36
  Speaker 1: will never return. But if you register using our CBP
• 15:40
  Speaker 1: home app and leave now, you could be allowed to
• 15:43
  Speaker 1: return legally. Do what's right. Leave now. Under President Trump,
• 15:48
  Speaker 1: America's laws, border and families will be protected.
• 15:52
  Speaker 2: Sponsored by the United States Department of Homeland Security.