Sound: “Every American should feel confident that their deposits will be there if and when they need them.”
The government has taken over a bank that failed on Friday. I’ll tell you why this is a big deal. Plus… March Madness starts tonight – are you ready?
Those stories and more today on Notice News Daily.
The First Bank Collapse Since the 2008 Financial Crisis
Hey everyone, it’s Jonathan here at Notice HQ in Brooklyn. Our top story is the collapse of Silicon Valley Bank.
Midday on Friday, Silicon Valley Bank, or S-V-B as it’s known, was taken over by the federal government, in part to protect the banking system and money people deposited at S-V-B.
It’s the largest bank collapse since the 2008 financial crisis, and the second largest bank failure in U.S. history.
The bank collapsed when many of its customers — mainly startups and other businesses — all tried to pull their money out of the bank at once.
This is called a bank run. Banks don’t keep all of everyone’s money on hand – they take it and make other investments.
Silicon Valley Bank invested in U.S. Treasury bonds, which are sort of like loans issued by the public to the government.
With bonds, the government promises to pay your money back, plus interest.
But the government has been raising interest rates in order to fight rising inflation – and rising interest rates have caused bonds to drop in value.
Higher interest rates also mean that businesses have been taking out fewer loans, instead pulling money out of their bank accounts to pay for basic expenses – like paying employees.
When S-V-B was caught with not enough money to cover customers’ withdrawals, it had to sell some of those bonds – at a loss – to give customers their money back.
When word spread that S-V-B might not have enough money to cover all withdrawals, everybody rushed to the bank hoping to get their money—
Because when a bank closes, you want to be first in line, not last.
That’s when the federal government stepped in. They’ve now guaranteed that customers of S-V-B will get all their money back.
The hope is to protect companies who saved their money at the bank – and keep the crisis from spreading to other banks.
Here’s what else is making news right now.
The Biden administration has approved a controversial plan called the Willow Project to allow more oil drilling in northern Alaska. We’ll have more on tomorrow’s show.
An already storm-battered California is bracing for more rain and flooding as another atmospheric river takes aim at the state today. Meanwhile, a nor’easter is dumping as much as a foot of snow on some places in New England.
And – for the first time since 1987, sales of vinyl records have outpaced compact discs. We’re still waiting on the return of the 8-track… ask your teachers.
March Madness Begins
March Madness starts tonight and we have just one question for you – have you filled out your bracket?
Every year, millions of people fill out a bracket to try to predict the outcome of each game – and the tournament – to win some cash.
Last year, 45 million Americans filled out brackets and an estimated 3.1 billion dollars was handed out in contests across the country.
If you’ve ever filled a bracket out, the thought of a perfectly correct ballot may have crossed your mind, but the odds of getting every game correct is pretty small.
If you do your research and take each team’s track record into account, those odds are 1 in 120 billion.
But if you do it at random, those odds go up to over 9 quintillion which is a number our brains absolutely cannot compute.
Sound: “In each game there are two possible outcomes and in each game there is 2x2x2x2 so you actually have 2 to the 63”
Although you have a one in two chance of correctly guessing the outcome of each game, those odds go up to 2 to the 63rd power since there are 63 games.
For reference, a group of researchers estimate there are 7.5 quintillion grains of sand on the planet.
As of now, the University of Houston Cougars are the odds on favorite to win the tournament with Alabama and Kansas close behind.
The first game tips off tonight at 6:40pm Eastern Standard Time.
That’s it for today – but let’s see how closely you were paying attention. Go take the Notice News quiz on our website noticenews.com.
I’ll be back tomorrow with more from us, Notice News.