![]() The unemployment rate went from 2.8% to 8%. Industrial production dropped by more than at any time in history up to that point. It lasted 15 months and saw GDP decline an estimated 30% (even more than the Great Depression).Ĭommodity prices crashed. Bankruptcies exploded. The Panic of 1907 would probably be more famous if it wasn’t overshadowed by the Great Depression just a couple of decades later. It’s a wonderful account of one of the biggest and most influential financial crises in history. The SVB ordeal caused me to revisit my old copy of The Panic of 1907 by Robert Bruner and Sean Carr. There could be plenty of different ways this plays out but I find myself captivated by the process of a bank run. If everyone goes to get their money out on the same day, it’s going to be hard for a bank to survive. ![]() It would be impossible for anyone to work out and the gym model wouldn’t work. If everyone with a Planet Fitness membership showed up at the gym at the exact same time there would be chaos at the squat racks. ![]() A flood of withdrawals from depositors destroyed the bank. There is a lot to this story but it really boils down to an old-fashioned bank run. That equity is now essentially worthless. history.Īs recently as November 2021, the market cap of the company was more than $44 billion. It was the second-biggest bank failure in U.S. Silicon Valley Bank, the 16th biggest bank in the country, was closed on Friday. ![]()
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