Theory Alone Does Not Pay Bills

What is it really worth? Mr Market doesn’t care what I think.

There is reason that the Silicon Valley Bank saga was important, it shed light on the fact that banks have a lot of assets (commercial real estate), which, in theory, are worth $xxx. They are allowed to value these assets using theory.

Based on ‘theory,’ they are able to lend 10-11x of $xxx to Jae’s Rib Shack.

Well, we will receive a lot of information about practical reality vs. theory. This news was released on September 6th.

The bottom line is that if a bank’s asset base has a lower value, then it cannot lend. Who is the first to lose out, if banks are unwilling to lend? Jae’s Rib Shack. I described this almost six months ago, and here’s the video.