Elon doesn’t think the Federal Reserves chairman Jerome Powell is doing a good job. He says GPT-4 will be better for the fed chair. The FED raised interest rates a quarter point on 22nd March 2023. According to FED, the interest rates are “sound & resilient” for the banking industry. On the other hand, Billionaire Elon Musk disagrees. Elon Musk taunts Jerome Powell saying GPT-4 would be a better-fed chair. GPT-4 is the updated version of GPT-3 which is owned by the non-profit organization Open-ai, initially funded by Elon musk with $100 Million US Dollars.
On March 11, Silicon Valley Bank (SVB) collapsed, right after Signature Bank. Along with these banks, credit Suisse is also on demise. This requires regulators to assure the public that their money in the system is safe & secure. Elon Musk & Other senior analysts think that the increase in interest rates is one of the main reasons. However, reports suggest that the fall of SVP is due to inefficiencies by the Risk Management group. After the financial crisis of 2008, was the biggest collapse of banks ever.
Banking is an industry that depends on public perception & run by the Public’s trust in them. The Share of all major US Banks is dropping right after the fall of SVB & Signature bank. This shows the interest of the public is shaking in the banking sector. Meanwhile, crypto like Bitcoin and Ethereum prices are started booming. The bear market in Banking and the Bullish market in crypto depict where people think their money is safe, this statement is just an opinion seeing market situations.
As per the Article published by Will Daniel on Yahoo Finance, US Banks are sitting on Unrealized losses of $1.7 Trillion. These unrealized losses will not become a major problem if FED stops increasing interest rates as they are burdening the economy. Regulators need to assure the public otherwise this “contagion” will spread to other regional banks and might create chaos similar to the global financial crisis of 2008.