Entire US banking system went into a steep dive
(ORDO NEWS) — The United States found itself on the verge of a large-scale financial crisis: the country’s largest financial institutions went bankrupt.
To stay afloat, they are getting rid of assets, and ordinary residents are trying to get at least some money back, but have already lost billions in total.
Wall Street has created a crack in which not only the States, but also the countries of Europe may find themselves.
Lost money
This is footage from the States, where long lines of those who are trying to collect their money line up at bank offices. In this bank, online transfers are already blocked. Clients leave with nothing.
“I actually lost all my company’s money in 24 hours.
As a CEO, I want to say that there are a lot of people like me. We are all on our nerves, we don’t know what to do.
After all, it is impossible to run a single company without capital.
And we already, apparently, have nothing left at all,” says Dean Nelson (USA), CEO of CATO.DIGITAL, indignantly.
How it all started
Over the past 24 hours, the entire US banking system has fallen into a steep dive. It all started with Silicon Valley Bank. Yesterday, he was one of the top 20 largest banks in America, financed startups.
“We are innovating. Our business is successful,” Silicon Valley Bank said.
The bank first announced a $21 billion emergency bond sale, and its stock plummeted 60 percent. Following him, the main players began to fall.
US banks lost $620 billion on bonds alone. And another 50 billion frightened customers withdrew over the past day.
“Many businesses have kept their employees’ salaries in the Silicon Valley Bank.
The owners of these businesses call me and ask if they need to send their employees on vacation.
They just don’t have accounts with other banks,” says Y Combinator President and CEO Harry Tan.
Aftermath and mass crisis
Following the banks, the largest US companies flew down: Uber, General Motors, Tesla. The cryptocurrency market crashed.
What is happening in the states now reminds analysts of the financial bubble of 2008, which is about to burst.
The government started printing money even during the pandemic. As a result, inflation shot up. To cope with it, we had to raise the key rate.
“As interest rates have risen, banks have to pay higher and higher amounts on deposits.
This is making the crisis worse,” explains Alexander Yokum, an equity analyst at CFRA Research.
Another crisis factor: the US Department of Labor announced the largest number of applications for unemployment benefits.
It is already clear that this financial collapse will not be local. The European economy was also under attack.
“Against the general background of the collapse of stock exchanges in the West, I see the panic of our investors.
Without government measures, we are waiting for an outflow of capital from the United States and the European Union, shares of European banks used to show high performance, and they invested more than in American ones.
But after the collapse of Silicon Bank , investors have started taking deposits. Now the market has weakened and become vulnerable, “says James Eti (UK), investment director at ABRDN.
They spurred the crisis in the West and sanctions against Russia. Over the past year, Europe has tried to switch to American shale oil. But there are also problems with its production now – volumes are declining.
In the meantime, according to analysts, everything is heading towards a repetition of the events of 2008. And they will not affect only those countries where they have learned to live in isolation from the West.
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