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https://preservewm.com
We've been keeping up with the latest headlines...
here are two of our favorites worth sharing.
** Your Money
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Banks make money from the difference between the interest rate they pay on deposits and the interest rate they receive on loans and investments. However, they can get in serious trouble when too many depositors want their money back simultaneously, and they need to exit longer-term loans or investments quickly and at a discount.
This "run on the bank" risk is lesser at big banks because they hold a range of assets and serve companies across the economy, minimizing the chance that a downturn in any one industry will cause them serious harm. But this risk is more acute for small lenders. Smaller banks must often specialize in a niche industry to attract customers or pay higher deposit rates than megabanks with better web/app technology and a physical branch presence.
That small bank risk jumped up and bit Silicon Valley Bank (SVB) last week. SVB catered to tech, venture capital, and private-equity firms and snowballed along with those industries during COVID. Deposits there ballooned, and the bank invested its surplus cash in longer-term government mortgages. Soon after, the Fed began raising rates. When rates go up, bond prices go down, and SVB's portfolio (while risk-free if held to maturity) lost billions in market value and needed to be sold at a significant discount to meet withdrawal demands. Those rate hikes also battered the tech startups and venture-capital firms Silicon Valley Bank serves, sparking a faster-than-expected decline in deposits that continues to gain steam.
The California Department of Financial Protection and Innovation closed Silicon Valley Bank last Friday, which appointed the FDIC as receiver for the bank.
This story is still unfolding, but regulators are working on a plan for depositors to get their money back.
To remind you, FDIC insures the first $250,000 of cash deposits ($500,000 for joint accounts) at FDIC-insured banks. Charles Schwab owns s a bank, and deposits there are covered by FDIC. Charles Schwab's institutional custodian that holds all brokerage investments is not a bank and, therefore, not FDIC-insured. Customers with stock, bond, and mutual fund investments held at Schwab are, however, covered by both SIPC (similar to FDIC) and an additional surplus policy with Lloyds of London to protect its clients.
Tech Lender SVB Stumbles (https://www.wsj.com/articles/bond-losses-push-silicon-valley-bank-parent-to-raise-capital-125e89d4?st=oura2hxucrl9i0r&reflink=desktopwebshare_permalink)
by Jonathan Weil and Ben Eisen
** Your Life
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Osteoporosis is often called a silent disease because people with it may not know until a bone breaks. However, it’s not entirely silent. The most common signs that you might need a bone check include getting shorter; explained back and neck pain; poor posture; shortness of breath; brittle fingernails; GI issues; dental issues; weaker grip strength; weight loss; and broken bones. Paying attention to these early warning signs of bone decline helps ascertain your risk of developing osteopenia (pre-osteoporosis) and osteoporosis. Risk factors include age; gender; smoking, heavy drinking; menopause, poor dietary habits; breast cancer; physical inactivity; family history; body type, and certain medications. Bone density is the concentration of minerals in your bones and is easy to check with a special E-ray called a DEXA (dual-energy X-ray absorptiometry) scan.
10 Risks for Osteoporosis — and Its Early Warning Signs (https://www.aarp.org/health/conditions-treatments/info-2022/symptoms-of-osteoporosis.html)
by Barbara Hannah Grufferman
https://www.linkedin.com/in/danheth/
https://www.linkedin.com/in/rosalynn-harvey-heth-mpa-ceps-3a3aa3191/
** Complexity Simplified
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Do you like your food spicy? Even super spicy? Well, you’re not alone and are joined by millions worldwide. As a matter of fact, each country/nation has its own spicy ingredient added to food to bring up the heat. You may know a few of these, but if you like heat, these are all worth trying.
Around the World in Hot Sauce: An Illustrated Tour of 18 Varieties (https://www.seriouseats.com/hot-sauces-around-the-world)
by Ben Jay
** Trivia
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A: Madagascar
Q: Who performs the character of Mark Zuckerberg in the movie “The Social Network”?
https://www.youtube.com/watch?v=mMwBWlCFuY4
** Back in 1989, this song reached #1
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