By Timothy D. Naegele[1]

It may seem absurd to ask such a question, much less posit it as a fact to be reckoned with.  But few Americans realize how close we came to a major national catastrophe during the so-called "2007–2008 financial crisis"—or what has been named "The Great Recession."[2]  I had left the U.S. Senate and was practicing law in Washington, D.C., and had the then-top lawyer for the FDIC over to my home in McLean, Virginia for dinner.  He had too much to drink, and shared how worried he was that one of America's largest banks might fail, sending uncontrollable shockwaves through our financial system, and globally.

We weathered that economic storm; and few Americans realized how close we came to the edge of an economic abyss, of unfathomable depths.  It's a fair question to ask: "Will the last economic "crash" be overshadowed by what is coming?"  The number of American billionaires seems overwhelming; and their lavish spending on homes, yachts and other luxuries seems to be "beyond the pale."  Despite sanctions relating to the war in Ukraine, Russian oligarchs have lived like kings in London and elsewhere; and global wealth seems to be staggering.

But the latest headlines are:

"Turmoil at Silicon Valley Bank triggers market panic: Four biggest US banks lose staggering $52 BILLION in valuation and Dow drops 540 points"[3]

"Silicon Valley Bank is shut down by regulators in biggest bank failure since global financial crisis"[4]

"Silicon Valley Bank meltdown sparks contagion fears: 'We found our Enron'"[5]

"Silicon Valley Bank's Manhattan branch calls COPS on investors trying to pull their cash out as Boston tech CEO with $10M in bank describes 'worst 18 hours of my life': Lender is SEIZED by regulators in largest US bank failure since Great Recession"[6]

"What caused Silicon Valley Bank to collapse and will customers get their money back? Second largest bank failure in US history rattles markets and raises fears of wider risks" [7] 

I testified as an expert witness for the FDIC in litigation stemming from the largest bank failure at the time, the United States National Bank in San Diego.

Today, American banks are holding bonds and other assets that have fallen in value, and lack liquidity.  If they were "marked-to-market," the banks' valuation might fall dramatically and precipitously, potentially causing panics and "runs" on such financial institutions.

Fewer and fewer Americans trust their government today; and many are holding their monies in accounts that are not insured by the federal government.  The "Great Depression II" did not come in 2007/2008.  Will it come soon . . . and be accompanied by World War III?

Tragically, the group that can least afford what may be coming are America's homeless, who are barely surviving already.  And the United States has divisions that are tearing our great country apart, all the while that our enemies salivate over our seeming chaos, and calibrate their next moves against us. 

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© 2023, Timothy D. Naegele

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[1]  Timothy D. Naegele was counsel to the United States Senate's Committee on Banking, Housing, and Urban Affairs, and chief of staff to Presidential Medal of Freedom and Congressional Gold Medal recipient and former U.S. Senator Edward W. Brooke (R-Mass).  See, e.g., Timothy D. Naegele Resume-21-8-6  and https://naegeleknol.wordpress.com/accomplishments/   He has an undergraduate degree in economics from the University of California, Los Angeles (UCLA), as well as two law degrees from the School of Law (Boalt Hall), University of California, Berkeley, and from Georgetown University.  He served as a Captain in the U.S. Army during the Vietnam War, assigned to the Defense Intelligence Agency at the Pentagon, where he received the Joint Service Commendation Medal (see, e.g., https://en.wikipedia.org/wiki/Commendation_Medal#Joint_Service).  Mr. Naegele is an Independent politically; and he is listed in Who's Who in America, Who's Who in American Law, and Who's Who in Finance and Business. He has written extensively over the years (see, e.g., https://naegeleblog.wordpress.com/articles/ and https://naegeleknol.wordpress.com/articles/), and studied photography with Ansel Adams.  He can be contacted directly at tdnaegele.associates@gmail.com

[2]  See, e.g., https://en.m.wikipedia.org/wiki/2007%E2%80%932008_financial_crisis ("2007–2008 financial crisis")

[3]  See https://www.dailymail.co.uk/news/article-11841715/Turmoil-Silicon-Valley-Bank-triggers-market-panic.html ("Turmoil at Silicon Valley Bank triggers market panic: Four biggest US banks lose staggering $52 BILLION in valuation and Dow drops 540 points")

[4]  See https://www.cnbc.com/2023/03/10/silicon-valley-bank-is-shut-down-by-regulators-fdic-to-protect-insured-deposits.html ("Silicon Valley Bank is shut down by regulators in biggest bank failure since global financial crisis") 

[5]  See https://nypost.com/2023/03/10/silicon-valley-bank-meltdown-sparks-contagion-fears/ ("Silicon Valley Bank meltdown sparks contagion fears: 'We found our Enron'")

[6]  See https://www.dailymail.co.uk/news/article-11845495/Silicon-Valley-Bank-branch-calls-NYPD-tech-investors-tried-pull-cash.html ("Silicon Valley Bank's Manhattan branch calls COPS on investors trying to pull their cash out as Boston tech CEO with $10M in bank describes 'worst 18 hours of my life': Lender is SEIZED by regulators in largest US bank failure since Great Recession")

[7]  See https://www.dailymail.co.uk/news/article-11845603/What-caused-Silicon-Valley-Bank-collapse-customers-money-back.html ("What caused Silicon Valley Bank to collapse and will customers get their money back? Second largest bank failure in US history rattles markets and raises fears of wider risks")