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There a bubble bursting right now as people are realizing that the "not yet made it" startups that got founded doing the age of cheap money is probably not goin
by Stranger43 4y ago
There a bubble bursting right now as people are realizing that the "not yet made it" startups that got founded doing the age of cheap money is probably not going to make it into profitable enterprises in the current climate of increasing inflation and the resulting reduction in spending by almost all types of consumers.
This mean that just about any financial organization dependent on the success of the American startup sector for profits is at risk.
- rabidonrails 4y agoBut to OP's question, Schwab probably wouldn't fall under "dependent on the success of the American startup..."
- guywithabowtie 4y agoI am just worried in general about them, They are too big and a lot of people have exposure in this case to them in one way or other.
- Stranger43 4y agoNo in this case it's probably a case of them holding too many low interest bonds and being dependent on markets that are in trouble for "profits" meaning that they are probably going to eat capital rather then pay dividends for a long time to come(companies can loose stock value without going bankrupt overnight). The world changed dramatically over the last few years and that's going to hit some sectors harder then others and the sectors that's hurting the most is finance and tech so the companies that have huge exposure to both and not a lot of assets in energy, food and infrastructure is probably going to see losses in the years to come.
- LatteLazy 4y agoActually both SVB and Charles Swap have the opposite problem: The fall in value of long/medium term treasuries is what is killing them, not loans to start ups...