While the nation and the authorities are concerned about the possible effect of Silicon Valley Bank’s crash on the nation’s economy, The ‘Big Short’ investor Danny Moses has come up with a response in which he has stated that the issues at SVB will only make the already bad economy worse.
He made it clear that the events will have a very negative impact on the nation’s economy despite the efforts by the government to reduce the impact on the people.
Danny Mosses made the statements and shared his corners about the events that might happen as a result of SVB’s collapse through an interview with CNBC. He said that the officials were unaware of what they were dealing with as they were caught completely off guard by what just happened at Silicon Valley Bank.
According to Mosses, the fact that the authorities are unaware of what they are dealing with should make the people feel concerned about the seriousness of the situation.
Danny Moses is the founder of Moses Ventures, which is a Connecticut-based investment fund. Moses is known for his predictions against the housing market before it finally collapsed in 208 leading an economic turmoil in the country.
Moses believed that the consequences of the event were yet to come and that the failures were just getting started. Moses mentioned that there was a credit dynamic in place ever since the Feds started to increase the interest rates. According to him, the events that are happening now can be seen as the lagged impact of these events.
Moses compared the recent events to a knee-jerk reaction as to the Feds will impose a pause on the high-interest rates before the schedule and he also said that the strength won’t hold as the cost of capital is also rising.
Moses said that the events have accelerated the slowdown of the economy as it will pursue banks to pull in on their activities. While it is not a perfect time to predict the exact outcomes of the event, Moses believes that the first quarter earning season which will start next month will provide a better picture of the situation.
Moses is very much concerned about the possible effect that the collapse of SVB can have on the country’s economy. One of the most striking remarks made by Danny Moses was that the Feds are kidding themselves if they still believe there are no problems to be concerned about in the future and if they believe the situation is going to go away on its own.
He said that the SVB was a small vase that was sitting on a window. Moses ended the decision by anticipating the next move from the Fed. He said we’ll see what the Feds do next week as the Federal Open Market Committee has scheduled a two-day policy meeting on interest rates on Tuesday and Wednesday next week.
The Silicon Valley Bank was shut down on March 10, 2023. The California Department of Financial Protection and Innovation seized the SVB and placed the firm under the receivership of the Federal Deposit Insurance Corporation (FDIC).
The failure of Silicon Valley Banks is regarded as the second-largest bank failure in the history of the United States and it is the largest bank collapse after the 2008 financial crisis.
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Following the crash of the Silicon Valley Bank, the market capitalization of the U.S. banks faced a combined loss of approximately $100 billion while the European banks suffered a loss of around $50 million in just two days.
Following the crash of the Silicon Valley Bank, the New York-based service commercial bank, Signature Bank was also closed down. The bank was closed down on March 12, 2023, and the bank was taken into possession by the New York State Department of Financial Services.
Following the closedown of two of the major banks in the country, the people were concerned about the banking sector and many notable personalities came up with their concerns regarding the situation like Danny Moses. President Joe Biden also discussed the collapse of the banks.
He held a meeting with the Government of California on March 11 following the closing down of Silicon Valley Bank. In his statement, Biden ensured that the country’s banking sector was resilient and that the government would ensure the availability of the deposits and also hold the people who are responsible for the events accountable.
As the events unfold, several Republicans and conservative commentators argue that the reason behind the failure of the banks was affected by the ‘woke’ concept and that they were distracted from their actual duty by workforce diversity efforts.
While the argument is being discussed on different social media platforms, there is no solid proof to support the argument.
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