All articles tagged with #financial collapse
First Brands Group filed for bankruptcy with over $10 billion in liabilities, exposing the risks of private credit lending, as private lenders who provided last-minute funding face significant losses and limited options for recouping their investments amid the company's financial struggles and failed refinancing efforts.
First Liberty Building & Loan, a Georgia-based lender linked to political figures, collapsed amid lawsuits and federal allegations of operating a $140 million Ponzi scheme, leading to legal and financial turmoil for investors and associated businesses.
Furniture company Mitchell Gold + Bob Williams, founded in 1989, recently filed for bankruptcy, resulting in the disappearance of $50 million in customer deposits. The once successful American company's financial collapse has left many questioning what led to its downfall.
Billionaire investor Ray Dalio has warned that the US government's lack of effective restraint on spending could lead to a "disastrous financial collapse" in the future. While he doesn't expect the current debt-ceiling debate to lead to a default, he believes that any agreement is unlikely to deal with the "big issues" in a substantive way and won't make a real commitment to cutting the deficit in future years. Dalio argues that continuing along the same path isn't sustainable and will eventually make it impossible to pay lender-creditors a high enough real interest rate without having that rate too high for the borrower-debtors to service their debts.
Former bosses of two US banks that collapsed in March, sparking global fears over the state of the financial industry, say the failures were caused by "unprecedented" circumstances. Lawmakers are examining the episode amid debate over what should have been done to prevent it. Former Silicon Valley Bank (SVB) chief Greg Becker is set to tell Congress he "never imagined" such events.
Silicon Valley Bank's strategy of offering banking services to startups and venture-capital firms, often encouraging their portfolio companies to do the same, powered spectacular growth for decades. However, the collapse of the bank left the sector extraordinarily vulnerable. SVB used financial sweeteners and strategic networking to attract both venture capitalists and their nascent tech companies, offering loans and credit to startups that often weren't profitable and would otherwise have a hard time getting a line of credit or a loan from a larger bank.