March Madness Purchased | March 30, 2023

Yes, there is a fun basketball tournament going on as well, but I’m talking about the madness affecting global financial markets of late.

Of course, seeing headlines of bank failures is always concerning. There are real implications, as lending standards will certainly become tighter and some businesses could lose access to valuable capital needed to fund operations. Also, many stockholders of those banks will be left with nothing as well, although that is probably a secondary concern for most of our clients.

With all of that said, however, these events are not that unusual. In fact, take a look at the number of bank failures in the US over the years:



That’s right! 513 banks have failed in the US since 2009. And that was AFTER the worst of the Great Financial Crisis in 2008. Sure, many of these were doomed by the GFC, but what about 2014, with 18 failures? What about 2019, with 4 failures? I get that there are always different circumstances, and the collapse of Silicon Valley Bank, and the last-minute rescue of Credit Suisse are unnerving, but this isn’t unusual.

Here is the full article:

Lastly, just remember, that dramatic events have been happening around the globe for as long as we’ve been on this earth. We just have more access (and more quickly) than we ever have before. It is truly hard to escape the news cycle these days. Just in the last 15 years, we’ve seen the likes of Lehman Brothers Bankruptcy, a European Debt Crisis, US Debt Crisis, Several global pandemics, War all around the globe, Interest rates at 0%, now interest rates at 6%, major hurricanes, a US President impeached twice, trade wars, tariff wars, Quantitative Easing, Quantitative Tightening, massive inflation, etc, etc, etc. Yet markets have gone up significantly during that time. We would expect similar results over the next 15 years.

This excellent piece from our partners at First Trust explains it well.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. Economic forecasts set forth may not develop as predicted. Tracking #421600-3