Jim Cramer, host of CNBC’s Mad Money, often advises people to invest in unprofitable assets or vice versa. Or most of the time the results will be the opposite. Most recently, he advised people to buy Silicon Valley bank stocks a month before the bank collapsed.
On February 8, Jim Cramer said inlistthat Silicon Valley bank stocks “are still considered cheap” despite rising 40% YTD at the time.
A month later, Silicon Valley Bank became known to the public. Because it announced that it had sold a large amount of securities at a loss. and plans to sell more than $2 billion worth of new shares to correct the balance sheet.
Then the stock price plummeted shortly thereafter. And the announcement caused panic among depositors who rushed to withdraw their money from banks.
“The symptoms of SVB rapidly deteriorate. That’s because depositors flock to withdraw money so quickly that banks go bankrupt. And intraday closures are inevitable due to traditional banking operations.” – Dennis M. Kelleher, Better Markets CEO say
Bank closures wreak havoc on the crypto industry. Due to giants like Circle – depositing large amounts of USDC reserves, the second-largest stablecoin lost its peg to the dollar.
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