Expert who predicted Lehman crash warns of next bank failure after SVB – latest

For months, right-wing media figures and Republican elected officials have blamed a “woke” agenda for what they perceive is the collapse of American institutions, from its schools and workplaces to the banks that facilitate their businesses.

The historic failure of Silicon Valley Bank is likely the result of a host of compounded factors that have nothing to do with so-called “wokeness,” from Donald Trump-era cuts to regulations that were put in place during the last financial crisis to the bank’s untenable concentration in an explosion of venture capital firms and tech startups as it careened into reality, rising interest rates and panic.

Yet Republican lawmakers have continued to return to their catch-all scapegoat – using “woke” as an umbrella term for anything related to diversity, progressive political platforms, LGBT+ inclusivity, antiracism initiatives or environmental activism – while advancing a nationwide legislative agenda singularly devoted to its destruction.

The Independent’s Alex Woodward has more:

When President Joe Biden announced on Monday that people who had deposited their money in the now-unraveled Silicon Valley Bank would have their money available, he emphasised that American taxpayers would not be left on the hook.

Similarly, he added that the people responsible at the bank would need to be fired and that investors in Silicon Valley Bank would not be made whole, arguing that they took a risk and now have to suffer the losses.

On the surface, the Silicon Valley Bank collapse, as well as the closing of Signature Bank in New York, appears quite similar to the 2008 financial crisis that took banks like AIG to the brink and led to the collapse of Lehman Brothers. At the time, Mr Biden was a sitting senator running for vice president alongside Barack Obama. Both of them, as well as their White House opponent at the time, voted for the Troubled Assets Relief Program, or TARP, which became known as the “bailout” in the popular imagination.

But there are important distinctions between 2008 and today.

A Wall Street expert famed for predicting the 2008 Lehman Brothers’ failure has pegged Credit Suisse as the next major bank set for collapse.

Robert Kiyosaki divined his latest forecast just hours before the Switzerland-based bank confessed to having a “material weakness” in its internal controls over financial reporting and said it had not yet stemmed customer outflows.

Speaking on Cavuto: Coast to Coast, Mr Kiyosaki said: “The problem is the bond market, and my prediction, I called Lehman Brothers years ago, and I think the next bank to go is Credit Suisse, because the bond market is crashing.”

He explained, while holding up a bank note: “The US dollar is losing its hegemony in the world right now. So they’re going to print more and more and more of this…trying to keep this thing from sinking.”

When President Joe Biden announced on Monday that people who had deposited their money in the now-unraveled Silicon Valley Bank would have their money available, he emphasised that American taxpayers would not be left on the hook.

Similarly, he added that the people responsible at the bank would need to be fired and that investors in Silicon Valley Bank would not be made whole, arguing that they took a risk and now have to suffer the losses.

On the surface, the Silicon Valley Bank collapse, as well as the closing of Signature Bank in New York, appears quite similar to the 2008 financial crisis that took banks like AIG to the brink and led to the collapse of Lehman Brothers. At the time, Mr Biden was a sitting senator running for vice president alongside Barack Obama. Both of them, as well as their White House opponent at the time, voted for the Troubled Assets Relief Program, or TARP, which became known as the “bailout” in the popular imagination.

But there are important distinctions between 2008 and today.

Graig Graziosi filed this report.

Global bank shares have slumped following the collapse of Silicon Valley Bank.

On Tuesday, Japan’s Topix Banks saw its shares fall by more than 7 per cent, while Mitsubishi UFJ Financial Group’s index was down by 8.1 per cent in mid-day Asian trading.

In the UK, banks were heavily lower after steep falls on Friday, with international bank Standard Chartered sinking to the bottom of the FTSE 100 with a 6.9 per cent drop, and Barclays down by 6.3 per cent.

Other UK banks were also caught up in the rout, with Lloyds Banking Group closing 5.1 per cent lower, while NatWest was down 4.8 per cent and HSBC down 4.1 per cent.

Top European markets finished the day even more scathed than in Britain, with the German Dax tumbling more than 3 per cent and the French Cac 40 declining 2.9 per cent at close.

The collapse of the 16th largest bank in the US sent ripples through global markets on Monday as governments and businesses scrambled to figure out what the impact would be and how it could be contained.

On Monday, the UK government said that HSBC would take over the UK wing of the bank.

But what was SVB, why did it collapse, and are other banks at risk? We examine these questions here.

The collapse of Silicon Valley Bank could fuel pressure on central banks to ease up on interest-rate hikes, according to some finance experts.

Alice Haine, a personal finance analyst at Bestinvest, said: “The collapse of two US banks in recent days, Silicon Valley Bank and Signature Bank, is a reminder of the risks that come when central banks, like the US Federal Reserve, raise interest rates aggressively.”