Our financial system is pretty wild. The first 100 people to use code JOHNNYHARRIS at the link below will get 60% off of Incogni:
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About: Johnny Harris is an Emmy-winning independent journalist and contributor to the New York Times. Based in Washington, DC, Harris reports on interesting trends and stories domestically and around the globe, publishing to his audience of over 3.5 million on Youtube. Harris produced and hosted the twice Emmy-nominated series Borders for Vox Media. His visual style blends motion graphics with cinematic videography to create content that explains complex issues in relatable ways.
An interesting fact is that the CEO of Silicon Valley Bank sits on the board of Federal Reserve Bank of San Francisco. The solution seems obvious, require higher reserve limits for banks. If currently 10%, why not 30 or 40% or even 100%. But moves like this get blocked by the federal reserve because it would essentially reduce their level of control over the economy
So reckless venture capitalists are really just fools who don't know what they're doing and don't understand how anything works who have the ability to crash the economy and screw over absolutely everyone besides themselves because consequences don't affect the rich? Noted.
Don't use banks or credit ever and you will always have more money and you will spend it more wisely. Never take out a loan and never buy what you can't afford.
I remember this being talked about in one of those Zeitgeist movies, i remember a lot of people talking about it and yet, people forget, nothing has changed
This is about the only time in my 52 years of broke-ass history I can sigh with relief. All I have is debt (mortgage, credit card), unrealised equity (a house worth triple the build cost), and enough income to survive the interest rate rises now and for the foreseeable future.
Maybe they should be harder on the actual bank owners / managers when brokering their bailout deals. Ban them from working in the industry for X number of years etc.
Outside observer here, but is this not different than the bailouts in 2008? My understanding is that the too-big-to-fail banks were essentially written a cheque in that event. SVB is being shutdown is it not?
Johnny, the 10% reserve requirement was abolished in 2020 by the fed. Also, it seems like you missed the point about the money multiplier. The reason it’s multiplied is not because the money goes circulating into the economy. That’s normal, any money you spend, whether it originated from debt or not, will get passed on multiple times but it doesn’t multiply there. What actually happen is that banks will give you 10 grands and then write it in the books as a liability owed to them. They effectively doubled your money because they created a form of ‘fictions capital’ (in the form of a right to your debt repayment) that they will then sell or trade. It is called fictitious because in theory it is worthless until you actually repay the debt. However, it has value because people are willing to exchange real money for those future earnings. So to recap, when the bank loaned you 10 grands, it effectively created 20 grands of value in the economy which then gets multiplied up to 100k in the form of fictions capital because as you explained, the loan money you get from one bank gets reloaned by another until the reserve requirement prevents it from spiraling out of control (in theory because those requirements are zero at the moment) https://www.federalreserve.gov/monetarypolicy/reservereq.htm
To understand modern banking, I recommend looking up "dr crane wheat receipts". Johnny's video is a modern retelling of the same material, with maybe a few additions since 1971.
I think it's pretty simple: * Government should never bail out (Apart from FDIC fund insurance paid for by banks) * Having an FDIC membership should require strict regulations on reserves, bonuses, periodic stress tests, audits, etc * Offering any banking product without FDIC insurance should come with a clear obligation to inform about the risks.
It’s crazy watching the SVB scandal after passing the CPA FAR. SVB considered the bonds as held-to-maturity investments. With those kinds of investments, an entity does not need to mark them to market. Meaning any daily gains or losses do not appear in the balance sheet and trading securities. No outside (or I guess inside also) observers noticed SVB had way too many investments in bonds when everyone knew the government would raise interest rates, thereby making those bonds near worthless. As long as SVB held the bonds to maturity, that would receive a safe but small profit. However, in the immortal words of the great Mike Tyson, “everyone has a plan until they get punched in the face.” SVB got punch but could weave due to worthless investments.
Get ready for a title change every couple of hours
An interesting fact is that the CEO of Silicon Valley Bank sits on the board of Federal Reserve Bank of San Francisco.
The solution seems obvious, require higher reserve limits for banks. If currently 10%, why not 30 or 40% or even 100%. But moves like this get blocked by the federal reserve because it would essentially reduce their level of control over the economy
moodys have downgraded the whole banking sector this is has never happened for any sector
i wish he could stop the memes midvideo
So reckless venture capitalists are really just fools who don't know what they're doing and don't understand how anything works who have the ability to crash the economy and screw over absolutely everyone besides themselves because consequences don't affect the rich? Noted.
Don't use banks or credit ever and you will always have more money and you will spend it more wisely. Never take out a loan and never buy what you can't afford.
I remember this being talked about in one of those Zeitgeist movies, i remember a lot of people talking about it and yet, people forget, nothing has changed
what's that movie, whose clips keep playing?
All by design. Digital currency incoming where the government can control and track you way more than they do already.
This is about the only time in my 52 years of broke-ass history I can sigh with relief. All I have is debt (mortgage, credit card), unrealised equity (a house worth triple the build cost), and enough income to survive the interest rate rises now and for the foreseeable future.
You don't have to let the banks fail, you just have to throw the executives in prison
Maybe they should be harder on the actual bank owners / managers when brokering their bailout deals. Ban them from working in the industry for X number of years etc.
Outside observer here, but is this not different than the bailouts in 2008? My understanding is that the too-big-to-fail banks were essentially written a cheque in that event. SVB is being shutdown is it not?
What tv shoe or movie is the ending from? “Blame immigrants and poor people for bank failures”
Greed is good
Johnny, the 10% reserve requirement was abolished in 2020 by the fed. Also, it seems like you missed the point about the money multiplier. The reason it’s multiplied is not because the money goes circulating into the economy. That’s normal, any money you spend, whether it originated from debt or not, will get passed on multiple times but it doesn’t multiply there. What actually happen is that banks will give you 10 grands and then write it in the books as a liability owed to them. They effectively doubled your money because they created a form of ‘fictions capital’ (in the form of a right to your debt repayment) that they will then sell or trade. It is called fictitious because in theory it is worthless until you actually repay the debt. However, it has value because people are willing to exchange real money for those future earnings. So to recap, when the bank loaned you 10 grands, it effectively created 20 grands of value in the economy which then gets multiplied up to 100k in the form of fictions capital because as you explained, the loan money you get from one bank gets reloaned by another until the reserve requirement prevents it from spiraling out of control (in theory because those requirements are zero at the moment) https://www.federalreserve.gov/monetarypolicy/reservereq.htm
Also, a highly recommend the documentary on this issue.
https://youtu.be/EpMLAQbSYAw
Thanks for the quick 20 minute video. I'm sure that was a lot to put together so quickly
Quell chaos but more risks and More $$$$$ Printing!!! De-dollarize now!
Video of the year 👏👏👏
….
Can you make a video of the 2008 financial crisis?
To understand modern banking, I recommend looking up "dr crane wheat receipts". Johnny's video is a modern retelling of the same material, with maybe a few additions since 1971.
Well done!
I think it's pretty simple:
* Government should never bail out (Apart from FDIC fund insurance paid for by banks)
* Having an FDIC membership should require strict regulations on reserves, bonuses, periodic stress tests, audits, etc
* Offering any banking product without FDIC insurance should come with a clear obligation to inform about the risks.
Its a big deal because the same guy who worked there also worked at lehman in 08 and enron when it went bankrupt… wake up
Umm I'd like to point out that the US changed the rules of the fractional system reserve requirements to near zero just recently.
Now do one on why the national debt doesn’t matter
great content Johnny🤔
And there's STILL an atm fee
Massive respect for getting such a polished video out so quickly.
Bailout banks fine but student loan forgiveness has to go through supreme court 😅
It’s crazy watching the SVB scandal after passing the CPA FAR. SVB considered the bonds as held-to-maturity investments. With those kinds of investments, an entity does not need to mark them to market. Meaning any daily gains or losses do not appear in the balance sheet and trading securities. No outside (or I guess inside also) observers noticed SVB had way too many investments in bonds when everyone knew the government would raise interest rates, thereby making those bonds near worthless. As long as SVB held the bonds to maturity, that would receive a safe but small profit. However, in the immortal words of the great Mike Tyson, “everyone has a plan until they get punched in the face.” SVB got punch but could weave due to worthless investments.
credit is 10-1 for cash
Hey can you explain more about islamic banking?
What was the color old timey movie he kept showing clips of?
Fucking startuppers. And why didn’t the bank close doors and shut down their online banking?
Man The Big Short is such a good film
Whoa it is magical!!!!
Love the Jeff Jackson Clip
17:43 “gave them all the money to make good on all of their” …mistakes 🖕🏼