It should slow its roll with rate hikes and likely pause this rate-hike campaign in either March or May. Compare that to Bank of America ’s ( BAC ) $3 trillion in assets across all sectors, and you’ll start to see why the SVB collapse was a wake-up call – not an economy-crusher. SVB had total assets of $211 billion, almost all of which were centered around the startup tech world. It may end up being an enormous financial contagion.īut alone, SVB’s collapse is also not serious enough to cause a still-pretty-healthy U.S. If the Fed keeps playing aggressive offense with the rate hikes, what happened at SVB can and will happen at lots of other banks. This is a serious-enough situation to illustrate that cracks are forming in the financial markets because of the Fed’s rate hikes. It really all boils down to one thing: SVB’s collapse was a “Goldilocks” crisis that will likely spark a Fed pivot without collapsing the economy. In fact, the bank’s collapse may have marked the crescendo of the bear market. And oddly enough, I‘ve come to the conclusion that it could be a very bullish signal for stocks. Throughout this week, I’ve been thinking about the collapse of the technology’s world premier banking institution – Silicon Valley Bank.
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