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6 things you NEED to know about the Silicon Valley Bank collapse

March 15, 2023
NurPhoto / Contributor | Getty Images
Katarina Bradford

Silicon Valley Bank's collapse is sparking traumatic memories of the 2008 financial crash. Should we be worried SVB is signaling a similar economic catastrophe, or is everyone overreacting to the media's hype? Glenn told his listeners to be "healthily terrified." This event is sure to have ripple effects throughout the economy, but the more you are informed about it, the more you can prepare. Here are 6 things you need to know about Silicon Valley Bank's crash—explained in simple words.

1. The short answer to what happened: SVB didn't have enough money to pay its depositors.

Remember the scene from It's a Wonderful Life when all of the residents make a run on George Bailey's bank demanding their money? Fortunately for them, their money was in the altruistic hands of George Bailey, who used his honeymoon savings to give the depositors the money they demanded.

Silicon Valley Bank's depositors weren't so lucky.

In short, the depositors made a run on Silicon Valley Bank, demanding the withdrawal of their money. But SVB simply didn't have the liquid money available to give their depositors, causing regulators to shut down the bank shortly afterward.

2. It all started with COVID...

Why didn't SVB have enough money for its depositors? To explain this, we have to go back to the pandemic era.

The pandemic saw a rapid decrease in spending and a massive increase in bank deposits. Due to the uncertainty of the future and lockdowns limiting ways to spend money on recreational activities, like restaurants, bars, and other outlets, many Americans stocked up money in their accounts. In fact, SVB's deposits doubled in 2021 alone, bringing in more money than they could lend out to their clients.

To make a return on their available cash, SVB wanted to invest it, as many banks do. Since they had reached their lending limit, they decided to invest it in U.S. Treasury Securities, which are the government's means of funding itself without using taxation (in a nutshell). These are considered "ultra-safe" investments because they are backed by the "full faith and credit of the federal government."

Unlike other forms of investments, investing in Treasuries means the government will do everything within its legal power to pay back the money used to fund itself. In other words, it is typically very safe... so what happened?

3. Then came the magic cocktail—record-high inflation and rising interest rates...

Interest rates ruined the typically "ultra-safe" investment. Due to 40-year record-high inflation, the Fed lifted rates eight times by a total of 4.25 percentage points in 2022, raising interest rates from 0.25 percent to 4.375 percent. This means the value of U.S. Treasuries investments plummeted rapidly. SVB reported that it lost $1.8 billion due to the decreased value of its Treasuries investments after a year of rising interest rates.

This raises the following question: why didn't SVB just weather the storm and wait for interest rates to decrease? There are two issues with this. The first is that, with so many of their assets held up in Treasuries investments, SVB still wouldn't have enough liquid assets to give their depositors during the bank run.

The second issue is that Treasuries investments have a ten-year limit. In 2021 during the Trump administration, interest rates were at an all-time low of 0.125 percent.

The record-fast increase of interest rates in 2022 caused very little chance for rates to go back down to their historic 2021 lows within ten years for banks to make their money back on their investments.

To avoid this, SVB planned to sell their investments at a loss and re-purchase Treasuries investments at the decreased value, giving them an extra ten years to bet on decreased interest rates in the future.

But people caught on to SVB's plan and didn't want to ride with the risk.

4. Account holders withdrew their money... FAST.

As aforementioned, SVP lost $1.8 billion when it sold its depleted Treasuries investments. While they were betting on being able to re-purchase the devalued securities, hoping that they would go up in value in the future with lowered interest rates, investors were worried about the risk.

Once they made the announcement of their $1.8 billion loss, their stocks began to drop, and venture capitalists warned the companies they invest in to pull out of SVB. This had a snowball effect, leading to a "bank run" of depositors demanding to withdraw their money from their SVB accounts.

This led to the perfect storm: SVB's investment losses coupled with the influx of withdrawals were so immense that regulators had to step in and shut the bank down to protect depositors. The government currently "running" SVB, for all practical purposes, is the Federal Deposit Insurance Corporation (FDIC). The FDIC closed SVB on Friday and reopened the bank on Monday, March 13th as the Deposit Insurance Bank of Santa Clara.

5. Some people may lose their money. 

Banks insure accounts with $250,000 or less with FDIC insurance. That means, in cases of bank failure, exactly like this one, the FDIC covers all accounts less than $250,000. The FDIC said SVB customers who had less than $250,000 in their accounts will have access to all of their money when the bank reopens. Since it reopened this week, they should have access to their funds.

However, many of SVB's depositors had more than $250,000 in their accounts—it is Silicon Valley after all. Therefore, their accounts were not covered by FDIC insurance. Will they get their money back? There is a chance that they will not.

It is unclear how much SVB currently has to cover uninsured deposits. It is likely not enough. The FDIC has issued a "Receiver's Certificate" to the uninsured account holders with the amount in their account that is not covered by FDIC insurance.

The FDIC said it will pay some of the uninsured deposits by next week by liquidating any additional assets held by SVB. However, if the liquidated assets are not enough, many of SVB's uninsured account holders could lose their money for good.

6. Is this 2008 all over again?

SVB's collapse was the largest bank failure since 2008, when Washington Mutual failed with $307 billion in assets. Its failure, along with the collapse of the Lehman Brother's investment bank, triggered the worst financial crisis since the Great Depression. Are we in danger of repeating 2008?

Some argue that we are not in danger of another economic catastrophe, simply because SVB holds less than 1 percent of the nation's assets. However, as Glenn warns, there is a danger of banks repeating the same mistakes as SVP.

SVP wasn't the only bank to use its surplus deposits to invest in U.S. Treasuries, which means that other banks are wrestling with the depleted value of their securities investments due to rising interest rates.

Bank of America, for example, lost $109 billion in their securities investments due to rising interest rates, the most among its peers—and Bank of America is no small fish in the ocean of assets.

Other major banks recorded other massive losses in their securities investments due to rising interest rates. JP Morgan Chase lost $36 billion, Wells Fargo lost $41 billion, Citigroup lost $25 billion, and Goldman Sachs lost $1 billion. If the little banks collapse, will they get the same effort and attention from the federal government as the "big guys?"

The critic may argue that these are still small values given the incredibly large amount of assets held in banks nationwide. However, this is missing the point. Major banks have majorly invested in securities since the pandemic-era skyrocketing rate of deposits. Now those investments are depleted in value.

They can either sell those investments at a loss, or they can wait and hope that they will recover over time. However, if those investments are no longer liquid, what happens when their depositors come knocking? Will they have enough liquid assets to cover a massive bank run? These are the lingering questions that our banks need to address.

As Glenn says, this will impact you—it is only a matter of time. What will you do to prepare?

Empty house, heavy heart: A father’s realization after his kids move out

The silence of an empty home reminds me that life’s outcomes are out of my control — what matters is showing up.

My son moved out of the house this spring. My daughter moves out in a couple of weeks, and my older kids are headed up north. Now, it’s just Tania and me — and it’s been quiet. Too quiet.

As I sit here in a house full of space and silence, my mind has been meditating on the reality of being a dad — and what that really means.

As a father, I’ve learned that sometimes the most important thing is simply showing up and doing the best I can — even when I’m not sure what that looks like.

I didn’t grow up with the model of fatherhood that I now find myself trying to live out. My dad wasn’t present. He worked hard — harder than most people I’ve ever met — but he wasn’t there for me the way I needed him to be. My dad was passionate about his job, and that job was providing for the family. He taught me about hard work, but there wasn’t much emotional connection. We didn’t start developing any real relationship until I was 30.

I’m not complaining. That was just the reality. But such memories inevitably materialize as I reflect on my own experience as a father and try to navigate this new chapter in my life.When my kids were little, it was clear that I wasn’t home enough. And looking back, I knew that my work — this job — was costing me time with them. But we all talked about it as a family. When the opportunity to make this career change came in 2006, we discussed it openly because we knew it would change everything, for better or for worse. We made the decision as a team.

Now that they're moved out, I walk around in this big house filled with all this stuff, considering whether anything was worth it. In the end, it's just stuff. Everything in my home could be gone, and all I would miss are the kids.

The reality of fatherhood

Something I thought — and I think many others can relate — is that you think that your main job is to provide. You’re not needed in the same way mom is. You’re not the one the baby looks to in those early years. You watch your wife bond with the child, and you wonder where you fit in. It’s a strange feeling.

But as I’ve come to learn, you are needed in more ways than just a provider. You just don’t always get the immediate connection that mothers do.

A special season starts around age seven when dad becomes a little magical. You can feel it. The connection is there. It’s that sweet spot before the teenage years, when everything is awkward, when both dad and kid seem to be at odds. But in those years before, it’s golden.

Then, it all changes.

As kids hit the teen years, they start to pull away. The relationship with dad often becomes strained. They turn to mom when they need comfort, leaving dad in the background, unsure of where he stands. And that’s fine. That’s how it goes. But in this phase of life, as the kids start moving out and forging their own paths, I wish things were different.

I feel that loss deeply. As a father who wasn’t home all the time, I worked to provide. But now, I’m left with this ache in my chest, wondering, “Did I do enough?”

Releasing the outcome

The hardest part of fatherhood is when you stop expecting a certain outcome. My wife often tells me, “It’s going to happen. It will all work out.” And I believe her. But honestly, it’s hard not to be caught in the endless loop of second-guessing. Did I make the right decisions? Did I do enough? How can I fix this?

This struggle isn’t just about fatherhood. It’s about life. I’ve spent so much time looking ahead, planning, pointing to the horizon. I could always see the future and strive toward it. But in this season of life, I’m realizing that we also need to release our attachment to the outcome — whether it be over the injustices we see in the news cycle or the things we are wrestling with in our individual lives.

How strong fathers shatter a poisonous narrative about manhood one child at a time.Photo by Kelli McClintock via Unsplash

It doesn't mean we're not engaged. It just means we have to stop wanting a specific outcome. It’s a journey where the road is uncertain, and the destination might look different than what I expected.

I’ve always been someone who could picture the future and work relentlessly toward it. But it’s not just about getting to the destination — it’s about being present in the moment, doing the next right thing, and giving the end result to God.

Applying this to life

We live in a world obsessed with results, with winning, with reaching that end goal. But what if, just for a moment, we stopped obsessing over the outcome? What if we focused on doing the next right thing, one step at a time?

I don’t have all the answers. I’m still figuring it out. But what I do know is that there’s beauty in the process. There’s meaning in the moments, even if they don’t lead to the perfect outcome. As a father, I’ve learned that sometimes the most important thing is simply showing up and doing the best I can — even when I’m not sure what that looks like.

The house is quiet now, but the work isn’t over. There’s still plenty to do. And it’s time to focus on making each moment count.

This article originally appeared on TheBlaze.com.

The dangerous rise of foreign allegiances in Congress

ANDREW CABALLERO-REYNOLDS / Contributor, Jemal Countess / Stringer | Getty Images

The rise of dual loyalties in Congress is a dangerous trend. Rep. Ramirez's allegiance to Guatemala calls into question her commitment to America’s laws and sovereignty.

When an elected official swears an oath to uphold the Constitution and defend the United States, that pledge should mean something. But what happens when a member of Congress chooses to place her allegiance with another country over the United States? It’s a violation of that oath, plain and simple.

Rep. Delia Ramirez (D-Ill.), a sitting member of Congress, openly stated in Spanish during a political event in Mexico City, "I'm a proud Guatemalan before I'm an American."

If we don’t demand that our elected leaders place their loyalty to the United States above all else, then we risk the very foundation of this republic.

Ramirez didn’t have a casual slip of the tongue. Her statement was a declaration of her loyalty to another nation. And it’s not just her words that are troubling; her husband, according to Rolling Stone, is in the U.S. illegally. That’s a violation of our immigration laws — laws that Ramirez should be sworn to uphold.

Ramirez’s statement isn’t an isolated incident. This is part of a growing pattern where elected officials, like Rep. Ilhan Omar (D-Minn.), proudly identify with their country of origin before America. They claim cultural pride, but celebrating your heritage is distinctly different from putting your identity above the country that gives you the freedom and opportunity to express that identity.

Heritage vs. loyalty

I’m proud of my heritage, as many Americans are. My wife’s family is a great example. They’re Italian-Americans who are very proud of their roots. But they would never say they’re “Italian before American.” They are Americans who cherish their heritage.

This is what Theodore Roosevelt meant when he said, "There is no room in this country for hyphenated Americanism." This is not a swipe at immigrants. This is a call for unity under one flag, one national destiny. For too long, we’ve allowed dual loyalties to take root in the very institutions that are meant to protect our sovereignty. This is how nations crumble.

George Washington warned against foreign entanglements and divided loyalties in his Farewell Address. He understood the dangers of dual allegiances. He knew the republic couldn’t survive if its leaders pledged allegiance to foreign powers instead of the Constitution.

This isn’t about whether you love your country of origin. It’s about the fundamental principle of loyalty to the United States. You can’t serve in Congress, be part of the body that governs and protects America, if you’re more loyal to another country than to the sovereignty and integrity of the U.S.

National security at risk

This issue goes beyond politics. It goes to the very heart of our national identity. The growing influence of foreign allegiance among our elected officials poses a direct threat to national security. You can’t be trusted to defend America’s borders and enforce immigration laws if you’re willing to place another country above your sworn duty.

Anadolu / Contributor | Getty Images

Congress must hold these people accountable. Ramirez must be removed from any committees related to national security or immigration. She has shown that her loyalty lies elsewhere. Her position on the Homeland Security Committee is not only a conflict of interest, it’s a violation of the trust placed in her by the American people.

Her husband’s illegal status must be investigated thoroughly. If you or I were in the same situation, we’d be facing the consequences. There’s no reason why she and her family should be above the law.

Time to act

This issue is about loyalty, integrity, and national security. If we don’t demand that our elected leaders place their loyalty to the United States above all else, then we risk the very foundation of this republic. The time to act is now.

Will Congressional lawmakers listen to the American people and choose America, or will they continue to play politics with our sovereignty? We need to know, now more than ever, whom these leaders are really serving.

This article originally appeared on TheBlaze.com.

Horror on Park Avenue: Is America’s mental health crisis out of control?

New York Daily News / Contributor | Getty Images

The Park Avenue shooter wanted us to study his brain. But will we study our culture?

Late Monday afternoon in Midtown Manhattan, the summer heat clung to the glass and steel of Park Avenue, usually a quiet street save for the occasional honking horn or blaring siren. But as the sun dipped behind the towering skyscrapers, violence erupted.

A 27-year-old man, whose name I won't bother mentioning, stepped out of a black BMW he had double-parked near 51st and 52nd Streets. His movements were calm, deliberate. In his hands, he carried an AR-15 rifle. His target was 345 Park Avenue, a tower of wealth and power, housing the offices of Blackstone, the National Football League, and Rudin Management. The idea of chaos here, in this building, felt foreign — until it wasn’t.

If we don’t get back to the root causes of violence, we’re doomed to continue spiraling into chaos.

The shooter made his way into the building lobby, where he shot in the back 36-year-old New York City Police Officer Didarul Islam, whose wife was about to give birth to their third child. The gunman then gunned down a woman hiding behind a pillar, her life taken in an instant.

The footage shows him moving with a chilling calm, methodical and relentless. A guard behind a desk became his next victim. Then another man, an NFL employee, was shot and is still in critical condition.

The shooter made his way to the elevators, and, strangely, as one opened, a woman stepped out. He let her pass. Why? We’ll never know. But she will likely ask herself that question for the rest of her life.

He continued to the 33rd floor, where Rudin is located. There, in the quiet hum of fluorescent lights and the soft chatter of cubicles, he began “to walk the floor, firing as he traveled.” Another victim fell, another family destroyed.

And then, in a final act, he turned the rifle on himself.

NYPD Commissioner Jessica Tisch confirmed that the scene was contained. But the damage was done. Four people were dead: one officer, one security guard, and two civilians. Several more were wounded.

The root issue: Mental illness

As details emerged, we learned more about the gunman’s background. He had driven cross-country from Las Vegas to New York. By trade, he was a security guard at a Las Vegas casino, and he held a concealed carry permit. Yet his history of mental illness, coupled with a backpack full of ammunition, medication, and his clear intent, painted a grim picture.

We also learned that his real target was the NFL, not Rudin. The shooter, suffering from chronic traumatic encephalopathy, a neurodegenerative disease common in high-contact sports caused by repeated head collisions, blamed the NFL for his condition.

He had played football in his youth, but never at the professional level. His note, found on his body after he shot himself, said he wanted his brain studied, to contribute to the understanding of his condition.

This wasn’t just an ordinary act of violence; it was a tragic collision of a mentally unstable man and a gun.

A growing crisis

America is in the midst of an unprecedented mental health crisis. As I walk through cities like New York, I am confronted by the increasing number of unstable individuals teetering on the brink of violence. Not long ago, my wife and I were walking through Manhattan when a man on a bike circled us, looking me directly in the eye, saying, “I’m going to kill me a white man today. Today is the day.”

Michael M. Santiago / Staff | Getty Images

The man was clearly unhinged. Fortunately, he noticed the armed security behind us, and he quickly rode away. But what if they hadn’t been there? What if he had been someone who wasn’t aware of the people around him?

The world we live in today is one where violence is erupting in public spaces, fueled by mental illness, societal breakdown, and a lack of accountability — and it’s becoming a national trend. This isn’t just about guns or laws — it’s about what’s happening inside the minds of those who perpetrate these acts.

A wake-up call

It’s easy for people to point fingers. To blame social media, to blame the media itself, to call for more laws. But this crisis is about much more than that. It’s about a loss of morality, family, social cohesion, transcendent purpose, genuine human connection, and so much more that comes with a society whose values are rooted in God’s truth.

I’m not a mental health expert, but surely the degeneration of these social goods and the historic rise in mental disorders, especially among young people, are not coincidental. We can’t keep turning a blind eye to such things and pretend that new laws or more regulations will fix it.

This isn’t just about changing laws; it’s about changing hearts. If we don’t, we’ll keep losing those we hold dear.

This article originally appeared on TheBlaze.com.

The DARK truth behind the Macrons' absurd lawsuit

WPA Pool / Pool | Getty Images

While the media obsesses over elite scandals, Glenn is having a field day exposing the Macron lawsuit farce—and the twisted truth it tries to bury.

The era of unchecked narratives is coming to an end. We're reclaiming reality, one scandal at a time.

On his show, Glenn couldn't hide his glee over French President Emmanuel Macron and his wife Brigitte suing Candace Owens for claiming she's really a man named Jean-Michel Trogneux. Glenn called Brigitte the "Jeffrey Epstein of France" for grooming a 15-year-old Emmanuel when she was his 40-year-old teacher, and speculated that she is pressuring her husband to silence the rumors. Glenn also mocked the blatant overkill, which included childhood photos, birth announcements, and a desperate proclamation that Brigitte is "a woman."

But it goes deeper: The liberal elites have long proclaimed that transitioning is "wonderful," so why sue over the insinuation? It's hypocrisy—elites demanding silence on grooming while forcing conformity. This isn't about truth; it's control, proving no one's above scrutiny.

Want to see the absurd lawsuit firsthand? Download the Macron v. Owens lawsuit PDF here and see the evidence for yourself.

Download the PDF here.