In the past week, not one, but two banks have failed. I think it has caused a lot of concern for some people thinking that other banks would soon fail as well. As a result, many people have been rushing to the bank to withdraw their own money to make sure that they don’t lose it.
The truth of the matter is that they’re not going to lose it. It is FDIC insured, which is what has happened to the Silicon Valley Bank. Investors may lose their money, but those who hold money there will not.
So what caused this? Well, part of it comes from over-extending themselves in the bonds market and not having enough liquidity. Basically, think of it this way…have you ever seen the movie “It’s a Wonderful Life”? Well, it’s like that. George tells them that they don’t have all of that money in the bank, it’s in so-and-so’s house, and another’s house, etc. But they wanted their money now and they didn’t have the funds at that time except for George’s own money.
Along with that though, is what Home Depot founder Bernie Marcus said…and that’s that the bank had gone woke.
Marcus said, “I can’t wait for Biden to get on the speech again and talk about how great the economy is and how it’s moving forward and getting stronger by the day. And this is an indication that whatever he says is not true. And maybe the American people will finally wake up and understand that we’re living in very tough times, that, in fact, that a recession may have already started. Who knows? But it doesn’t look good. I feel bad for all of these people that lost all their money in this woke bank. You know, it was more distressing to hear that the bank officials sold off their stock before this happened. It’s depressing to me. Who knows whether the Justice Department would go after them? They’re a woke company, so I guess not. And they’ll probably get away with it.”
He continued, “I think that the system, that the administration has pushed many of these banks into more concerned about global warming than they do about shareholder return. And these banks are badly run because everybody is focused on diversity and all of the woke issues and not concentrating on the one thing they should, which is shareholder returns. Instead of protecting the shareholders and their employees, they are more concerned about the social policies. And I think it’s probably a badly run bank. They’ve been there for a lot of years. It’s pathetic that so many people lost money that won’t get it back.”