The New Banking Meltdown Brings Incredible Deals For Investors
Can you imagine buying the biggest bank in Silicon Valley for just $1.22? That’s effectively what HSBC just did when it bought SVB’s UK business after their recent failure.
In spite of all the efforts to declare things are different this time around it’s looking a lot like the Great Recession 2.0 out there. This is when the real leaps in wealth are made.
Was SVB Just The First Domino?
It seems quite likely that Silicon Valley Bank’s failure was just the first domino to fall. A bank recently ranked as one of the best in 2023.
Credit Suisse has quite publicly been suffering, with expectations it will also be soon taken over. This is one of the world’s largest banks, with over $1.5T in assets under management as of 2020. As well as $15B in annual revenue as of last year.
Deutsche Bank is another massive bank that seemed to be struggling and shedding assets to find cash as of last year. Both of these were two of the largest banks that actually made it through the 2008 crisis.
The Great Consolidation
One of the most notable outcomes of the last banking crisis was a massive consolidation of banks. Many were eaten up and absorbed by a few large players.
We can also expect to see this across many related fields. Including fintech companies, real estate and mortgage firms, property management companies, and more.
Those that have or can raise the liquidity and have the boldness to make the offers will devour their competition. Leaving a few strong players to survive until things bounce back. Just as Praxis Capital managed to do, without losing any investor money through the 2008 meltdown.
Discounts & Deals, If You Have The Connections
Imagine buying a $200B bank and its assets for just $1. While HSBC didn’t get it all, and certainly took on some debt and liabilities in the process, that’s effectively what they just did with SVB.
Other notable investors made massive wealth leaps with their own $1 deals last time around. It was not uncommon at all to be able to buy up properties or mortgage debt for 40 cents on the dollar.
Of course, this takes being able to really understand what you are buying, and having the resume, capital, and connections to be able to ink these deals. So, make sure you have the right relationships.
