Ten News Explains: What's up with Banking?💸
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The Ten News Season 3: Episode 45
In today's episode: 💸 What's going on in banking? Pamela Kirkland breakdowns the SVB collapse 🤩 Looking for some advice? Zak Rosen from The Best Advice Show has you covered! 💡 Trivia with a Ten'er & Tessa: what force in the universe did Einstein think was the strongest?
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https://www.snopes.com/fact-check/compound-interest/
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TRANSCRIPT:
Ryan Willard 0:01
Now, see here Pamela, I need you in the field. We need you to cover the banks.
Pamela Kirkland 0:04
See? What happened to your voice, Ryan?
Ryan Willard 0:08
Let me give you a piece of advice, cookie.
Pamela Kirkland 0:10
Hey, hold it right there. I'm not a cookie.
Ryan Willard 0:13
Fair enough. You're the best gal in the newsroom who can explain finance. So, get out there and find me a story. Pamela Kirkland 0:20
Tell you what cupcake.
Ryan Willard 0:22
Wait a minute.
Pamela Kirkland 0:24
I'm gonna get this story not for you. And not for the banks. But for Ten'ers everywhere. Got me, tatertot?
Ryan Willard 0:32
Yes, ma'am.
Pamela Kirkland 0:33
I'm Pamela Kirkland.
Ryan Willard 0:35
And I'm Ryan Willard. It's Wednesday, March 29th.
Pamela Kirkland 0:38
This is The Ten News.
Various Voices 0:41
10, 9, 8, 7, 6, 5, 4, 3, 2, 1.
Pamela Kirkland 0:47
While Ryan finds his way back to this century, you've probably heard about several banks collapsing. And no, not the building's themselves. Several banking companies have run into big problems and have been forced to close. What happens when the place where people and businesses keep their money shut down? I have the story. It's time for The Ten News Explains: What's Going on in Banking. Let's dive in. First, let's talk about what a bank is. A bank is like a piggy bank where people in businesses can save and borrow money. When you or your parents deposit money into a bank. That money doesn't just sit there in an account. That money has things to do and places to be the bank lend that money out to other people in businesses so they can do things like buy homes or start new companies. Now Silicon Valley Bank or SVB was a very special kind of bank. It focused on helping tech companies. You know, those cool businesses that create things like smartphones, video games and robots. SVB gave these companies the money they needed to grow and become successful. So what happened? Let's break down a few of the reasons why SVB collapsed. First risky loans. Imagine lending your favorite toy to a friend who doesn't take good care of things, there's a chance you might not get it back in the same condition. Or at all. This is an outrage. SVB lent money to some businesses that were very risky, which means they had a higher chance of not being able to pay the money back. Second, too many eggs in one basket SVB mostly focused on tech companies. When some of those companies didn't do well, the bank had a harder time recovering because it didn't have other types of businesses to balance things out. Third, they didn't have enough money saved just like you should save some of your allowances for a rainy day. banks need to have some extra money saved up in case things go wrong. SVB didn't have enough money set aside to cover the losses from the risky loans they made. Okay, that's bad treasury bonds, economic changes, and other factors also played into the bank’s collapse. Let's talk about the final moments leading to the collapse of Silicon Valley Bank. What happened was something called a bank run instead of a bank for a moment, imagine a popular ice cream shop in your neighborhood that everyone loves. One day, a rumor starts going around that the ice cream shop is running out of ice cream and won't be able to make any more. Suddenly everyone in the neighborhood rushes to the ice cream shop to get their favorite flavors before they're gone. The shop gets so crowded that it's hard for everyone to get served, and the ice cream supply starts running low. That's what a bank run is. So what does that mean for the banking industry? Well, when a bank like SVB collapses, it can cause other banks and businesses to become worried. They might think, hey, if SVB couldn't get their money back, maybe we won't either. This can lead to something called a credit crunch where banks become more cautious about lending money. A credit crunch can make it harder for people and businesses to borrow money. This can slow down economic growth and even lead to job losses. It's like when you're playing a game of musical chairs and suddenly there are fewer chairs available. It becomes a lot more challenging to find a place to sit. It can also make people who have money in the bank wonder is my money. safe here, which means fewer people want to keep their deposits in the bank, giving the bank less money to lend out overall. But don't worry, there are special groups called regulators like the FDIC, the Federal Deposit Insurance Corporation, who keep an eye on banks to make sure they're behaving responsibly. Oh, the FDIC even ensures the money you deposit in a bank is up to a certain limit so that you don't lose your hard-earned savings if a bank like SVB collapses. When something like the SVB collapse happens. Regulators like the FDIC work to find out what went wrong and make sure other banks don't make the same mistakes. In the meantime, the government may step in to help out. They can do things like provide money to banks to keep them from collapsing, or even take over a bank temporarily to make sure it stays safe and secure for its customers. So what can you do? It's important to understand that banks play a big role in our lives, even if we don't think about them every day. You can help by being smart with your money, saving it, spending it wisely, and learning how the financial world works.
Ryan Willard 6:20
So, do we need to be worried, Pamela?
Pamela Kirkland 6:22
Not quite yet, Ryan, the FDIC has insured all deposits in both banks, which means customers and businesses won't actually lose their money. But when smaller banks go bust, it can mean an economic slowdown for all of us. Ryan Willard 6:39 We'll keep you updated about what's happening with the banks.
Pamela Kirkland 6:47
Hey, Ryan, you know how we're always thinking of good advice to give our Ten'ers? Of course I do. See, we brought in someone today who really knows their stuff. Here's Zak Rosen from the podcast, The Best Advice Show.
Ryan Willard 7:02
Alright Ten'ers, I'm here with a living legend, who happens to be the host of one of my favorite podcasts. So I'm going to ask him, Who are you? Where are you from? And what do you do?
Zak Rosen 7:08
Hey, Ryan! My name is Zak. My last name is Rosen. But you can just call me Zak at Z-a-k, which is kind of unique in the Zak world. And I live in Detroit, Michigan. That is the state with the mitten shape. And what I do is I get to talk to strangers all the time. And what I like to ask them is, do you have some advice for me?
Ryan Willard 7:41
Well, when I was a kid, adults, were always giving me advice. Should kids be open to it? And why?
Zak Rosen 7:49
I think you should definitely be open to it. But I think that you should be comfortable. Not following the advice. And if someone is super kind, and they're giving you advice, you don't have to and you think it's kind of lame, you don't have to be like, Yeah, I don't want that advice. Get out of here, old person. You know, like, if you don't like the advice, you can still say thanks for your input. You know, I appreciate that. But I think that you know what good advice is when you hear it because different people are interested in different things. And different people are, are going to resonate with certain types of advice more than others. Like I like advice about like creativity and art and stuff. But some other people aren't particularly interested in the creative process. So to answer your question, Ryan, yes, we should be open to it. But it's not like a prescription. You don't need to follow it if you don't want to. I kind of think I'm thinking about advice like clothes sometimes. Try it on. See what it feels like, even if it's like this weird polka dot thing like, Huh? Once I tried this, I look pretty good. Right? So yeah, or, you know, donate it to Goodwill if you don't want it.
Ryan Willard 9:05
I think that's actually very insightful. But if you know something, and you want to help someone else, and give advice, give a suggestion. What's a kind way to give advice? Zak Rosen 9:18 Like that, right? I think the first thing one should do when they're going to give advice is to ask the person if to want some advice. Because if I just go up to someone, even if I know them, and say you got to do this, I find that off-putting but if you're in a conversation, you find that your friend or your family member is struggling with something and it's making me think of something that perhaps you went through or giving you an insight that you might want to share with them. Hey, do you want my suggestion? Do you want to want to hear my advice? So I would ask first because unsolicited advice is a lot different than welcomed advice I find.
Ryan Willard 9:59
So after you ask, what if you're still worried that the advice might hurt someone's feelings?
Zak Rosen 10:05
What's an example of advice that could hurt someone's feelings?
Ryan Willard 10:08
It might be that I smell bad. And you might want to say you might want to try some deodorant under your arms, Ryan.
Zak Rosen 10:15
Hmm. Great. That's a great one. And so I think, I mean, I think the intention is so important. If you go up to someone who's a friend of yours, or maybe just a classmate, and want to let them know, hey, I can. I can smell your Bo. I think there's a kind way to do it. And so you can preface like, Hey, you should get some deodorant with, Hey, I've, you know, struggled with this myself. I'm so happy that someone told me that my armpits stunk last summer at camp. And I'm just telling you this as a friend. And no big deal. But like, maybe try deodorant. It's actually like, really fun to shop for at CVS. That's actually one of the things that I really like to do it. As an aside, Ryan, I love deodorant shopping. You can invite someone to CVS with you and go deodorant shopping with them. That could be a fun friend date.
Ryan Willard 11:13
Now, if I'm on the other side of that, that smelly debate, right? If if I'm getting advice, is there anything I should do to process that? If it could hurt my feelings? Or it might be weird, or I don't know if I want it.
Zak Rosen 11:28
Yeah. Yeah. So I think hearing, hearing the advice giver out thinking about what their intentions are like, if it's a friend of yours, that's going to be different than, you know, perhaps the class bully who's isn't kind to a lot of other people. So think about the possible intentions of the person who's giving you the advice, and then to remember, you can just let it wash over you. If it doesn't resonate with you. If it doesn't feel like something that's going to benefit your life. You're going to be like, Oh, thanks for the suggestion and then be on your way. But you know, back to the back to the smelly armpits. For example, like someone might suggest that you put on deodorant, maybe you'll give a quick whiff, and realize, oh, oh, yeah, maybe I could use some deodorant. And then you can just thank them for it.
Ryan Willard 12:22
Okay, do you have any advice you want to give to our Ten'ers?
Zak Rosen 12:26
Yes, if you are hiking in the forest, and if there's a river nearby. And if you have to go to the bathroom, if you have to poop in the forest, but you forgot your toilet paper. Walk down toward the river and find yourself a beautiful clean stone find yourself like three or four. Wipe your butt with clean rock, y'all. You're welcome.
Ryan Willard 12:53
Wait is this, is this real advice? You can wipe with a rock? I thought you were supposed to use like a leaf.
Zak Rosen 13:01
Well, you should know leaves really well, you should know that the leaf that you are going to wipe with isn't a poisoned leaf-like poison ivy or poison sumac. So if you're good with leaf classification, I'm not. I would go for the rock and there's some night. And if you've done this before, we can we can get into the differences between wiping with a leaf that can crumble pretty easily, especially if it's been sitting on the forest floor for some time. A rock is sturdy. And if you have three or four of them, you know you do one wipe with the first one, throw it back in there, throw it in the river, then you gotta clean one for number two. Number two for number two. So you can experiment but I'm more of a rock man since I learned this advice. I learned this from a wilderness educator when I was hiking and in Colorado last summer.
Ryan Willard 13:54
Excellent advice. Thank you very much. I'm going to try that. And I will certainly not throw poopy rocks at my siblings. That was excellent advice. Man. Thank you so much, Zak, the host of ‘The Best Advice Show’ how no surprise that you are giving me the best advice and giving our Ten'ers the best advice as well. Thanks so much, Ryan. Of course. Thank you so much, Zak.
Pamela Kirkland 14:18
So Ryan, other than wiping your butt with rocks. Did you learn anything?
Ryan Willard 14:23
Once he suggested wiping your butt with rocks I forgot everything else. Zak is so cool. And oh, I put on some jewelry, too.
Pamela Kirkland 14:33
That's good.
Tessa Flannery 14:45
Welcome to the trivia. Oh, it's just you. Hi, Ryan.
Ryan Willard 14:51
It's actually not just me. One of our Ten'ers stopped by the studio. Hi, Tessa.
Ten'er 14:55
I'm Riya. So nice to meet you. I've always wanted to come and sit on the trivia throne! oh my god, Hi, Riya!
Ryan Willard 15:05
Why don't you give her the official? Welcome to the trivia room!
Tessa Flannery 15:09
Of course. Welcome to the trivia room. Riya, hop on up on the trivia throne for today's trivia question.
Ten'er 15:18
This is so cool. Wow, this is way comfier than I thought it would be.
Sound Bit 15:24
What is going on here?
Tessa Flannery 15:37
Albert Einstein was a physicist who discovered cool things about the different forces in the universe. And there's one force Einstein thought was the strongest. Do you know what? Is it a) gravity, b) compound interest, or c) force? Ten'ers, did you guess it? Riya, what's your answer?
Ryan Willard 16:03
Use the Force, Riya.
Ten'er 16:06
This is a hard one. I think it's b) compound interest.
Tessa Flannery 16:11
The answer is b) compound interest. Albert Einstein apparently said that compound interest is one of the most powerful forces in the universe. But what is compound interest? It's when you earn interest on your money and interest on the new total. Think of it this way. If you were to get a $5 allowance each month, and it monthly earned 10% compounded interest. At the end of the year you would have $62.83 Rather than just $60. Well, that might not seem like a big deal. When it comes to savings. This can really add up over time and can help you become a millionaire when you retire.
Ten'er 16:57
Thanks for having me in the studio. Bye, Tessa.
Tessa Flannery 17:00
Anytime, Riya. Ten'ers, do you want to sit on the trivia throne and share your trivia knowledge? Visit thetennews.com/contact to get in touch and we might have you on the show!
Ryan Willard 17:11
And now we've got to give some special Ten News snaps to one of our listeners.
Pamela Kirkland 17:17
But before we do, here's a quick note for the grown-ups.
Ryan Willard 17:21
Time for Ten News snaps.
Pamela Kirkland 17:26
Ten’er ‘ooooowwwooooo’ wrote this review of The Ten News: “84 Fire Emojis”
Ryan Willard 17:36
Thanks, ‘ooooowwwooooo’, and thanks for listening to The Ten News! Ten Things You Need to Know drops every Tuesday and our in-depth reports drop every Wednesday. But if you want some bonus content, you could join the Ten’ers Club on our website or on Apple Podcasts. Club members get special bonus content and more!
Pamela Kirkland 17:54
The Ten News is a coproduction of Small But Mighty Media and Next Chapter Podcasts.
Ryan Willard 17:59
The Ten News creative team is looking for nice clean stones by the side of a river and includes Tracey Crooks, Pete Musto, and Tessa Flannery.
Pamela Kirkland 18:07
Our production director is Jeremiah Tittle and our executive producers are Donald Albright and show creator Tracy Leeds Kaplan. I'm Ryan Willard. And I'm Pamela Kirkland. Thanks for listening to The Ten News.
