ALL INPredictions
Last updated Nov 29, 2025
Episodes / E120: Banking crisis and the great VC reset
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Chamath @ 00:31:10Wrong
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The Fed’s 2023 emergency lending facility (accepting underwater securities at par for one‑year loans) will not actually resolve the underlying banking-system problems; instead, by around March 15, 2024, there will be a renewed banking/financial problem when those one‑year loans come due unless interest rates have been cut massively to reflate bank asset values.
As far as I can tell, all we've done is we've kicked the can down the road for a year. But I do think it's important for people to realise this doesn't solve the problem. It just means that mark your calendar for a year from now. We have a problem on March 15th, 2024, because all those folks that took money. What do we do?View on YouTube
Explanation

Evidence from 2023–2025 shows that Chamath’s time‑stamped crisis call tied to the Bank Term Funding Program (BTFP) did not materialize.

  • The facility’s structure didn’t create a single "March 2024 cliff." The Fed’s own description of the BTFP made clear that banks could take loans of up to one year any time until March 11, 2024, and could prepay without penalty. Advances were available until March 11, 2024, meaning the last loans can run off into March 2025, not all in March 2024. (stlouisfed.org) This undercuts the premise that “all those folks that took money” would hit a single hard maturity wall around March 15, 2024.

  • When BTFP stopped making new loans in March 2024, there was no renewed systemic banking crisis. On Jan. 24, 2024, the Fed announced it would let the BTFP expire on schedule on March 11, 2024, citing that it had stabilized the system and that banks would continue to have ready access to the discount window. (federalreserve.gov) On March 11, 2024, Reuters reported that as the facility ended new lending, deposits had stabilized, bank loan books were growing, and “no bank of meaningful size” had failed in 10 months, describing BTFP as having “helped turn the tide of trouble.” (reuters.com) That is the opposite of a renewed March‑2024 panic.

  • Rates were not cut massively before March 15, 2024 — yet no calendar‑driven crisis followed. The Fed kept the federal funds target range at 5.25–5.50% at its March 20, 2024 FOMC meeting, the same level it had maintained since July 2023, and merely projected gradual cuts later in 2024. (federalreserve.gov) Chamath’s conditional framing was essentially: if rates aren’t slashed, there will be a problem when the one‑year loans come due. Rates weren’t slashed, but a discrete March‑2024 banking crisis tied to BTFP maturities did not occur.

  • There were localized bank stresses, but not the systemic "problem" he forecast or one clearly linked to BTFP roll‑off. New York Community Bancorp experienced serious losses and governance issues in early 2024, but coverage emphasized that broader regional‑bank indices were only modestly affected and analysts did not see its problems as systemic. (ft.com) The first FDIC‑insured bank failure of 2024, Republic First Bank in Philadelphia, came later on April 26, 2024, was small (~$6 billion in assets), and was handled routinely via sale to Fulton Bank; it highlighted ongoing rate‑ and CRE‑related pressures on some regionals, not a sudden March‑15 BTFP maturity shock. (reuters.com)

  • Ex‑post Fed research describes BTFP as successfully preserving liquidity, not merely “kicking the can one year.” A 2024 Federal Reserve staff paper finds that BTFP borrowing played an outsized role in funding outflows at vulnerable banks and helped them build cash buffers and preserve liquidity during and after the 2023 turmoil. (federalreserve.gov) That record does not show a sharp, program‑driven relapse in March 2024.

Given that (1) there was no identifiable, system‑wide banking or financial crisis around March 15, 2024 associated with BTFP loans coming due, and (2) interest rates were not massively cut yet the feared event did not occur, Chamath’s prediction as stated is best classified as wrong.