quote:

Originally posted by Balzé Halzé:

quote:

Originally posted by cyberiad:

quote:

Originally posted by spunk639:
Building Back Better, great job Joe.

The people who ran the bank took a big gamble with bonds and the interest rate and lost. Nothing to do with Joe.

Oh horseshit. It had everything to do with him and his shitty economic policies which lead to record inflation and in turn a quick raising of interest rates to combat it.

You are right, Joe created soaring inflation by declaring war on our domestic oil industry, among other things. But these are the dumbest dang bankers in history. Chairman Powell of the Fed has been saying he was going to massively raise rates to fight inflation for over a year. Clueless Janet Yellen finally figured out that inflation was not temporary over a year ago. But these diverse woke SVB bankers didn't reduce their duration exposure, maybe because their Harvard Business professors had told them that Treasury securities were risk free. I knew rates were going up and longer-term bonds would crash, why didn't the woke SVB Bank?

It's rather remarkable that a tweet posted 14 hours ago has nearly 10 million views. And I knew that twitter was allowing longer Tweets since Musk took over, but I had no idea that they'd gone long-form.

Perhaps it's because I don't really understand much of what is happening here, but I confess that I am taking a not small degree of pleasure in seeing this happen. It's my understanding that this particular bank- like far too many corporations these days- was more concerned about a bunch of phony woke horse shit than protecting their depositors money. It's icing on the cake to hear "Harry and Meghan" are going to lose their 'fuck you' money.

I would hate to learn that this bank collapse directly or indirectly affects any forum members or their family, but as far as I'm concerned, a wakeup call such as this can be to the great benefit of the average American. Again, perhaps I am merely showing my ignorance, but I want to see what happens during the coming week.

https://twitter.com/BillAckman...%7Ctwcon%5Es1_&ref_u

Cramer inverse ETF explained

New York Post

quote:

I would hate to learn that this bank collapse directly or indirectly affects any forum members or their family, but as far as I'm concerned, a wakeup call such as this can be to the great benefit of the average American. Again, perhaps I am merely showing my ignorance, but I want to see what happens during the coming week.

Yeah, I can't blame you for your feelings, even if the ripples might impact where I work. It's going to be interesting to see what happens in the next few weeks, but you are right about a wakeup call.

Let us recall the words of Barack Hussein Obama:

Speaking to Politico about Obama's concerns, one aide recalled him saying: “Don’t underestimate Joe’s ability to f**k things up.”

https://www.thesun.co.uk/news/...e-ability-things-up/

I don't know what will happen in the near future but I am confident that the administration will continue to take the exact wrong actions. I suspect that Silicon Valley and it's technology mavens will remember the Biden presidency well. I just hope they learn their lesson.

In the start-up world, SVB was the engine that held and transacted Venture Capital (VC) funding and lines of credit. In order to smooth out funding rounds and lumpy revenue normal for a startup, SVB offered lines of credit. \

Here's the catch, the LoC would only be established if the startup moved ALL their funds to SVB including corp credit cards. If a CEO or CFO moved funds out of SVB to remain liquid; they'd incur a 1% penalty on the amount drawn. So, moving $10M out cost them $100K. SVB did this to account for all assets when establishing and maintaining the LoC.

Now the rub...if you moved ALL your assets to SVB, would you maintain other accounts? Likely not. So, when it was apparent there might be a run on SVB last week, where would you move funds to? It takes 1-3 business days to establish a new corporate account at another institution and then there was the gamble of the 1% penalty. By the time it was clear what was happening, the State of California locked down transactions at SVB and then the FDIC to capture assets fund the payouts.

A LOT of companies aren't going to make payroll tomorrow. A LOT, unless the C-level staffs at each had sufficient personal cash outside SVB to make it happen. In Commiefornia, not making payroll triggers STEEP fines on the corporations. This effectively tosses gas on the (dumpster) fire.

Buckle up everybody...this next week is going to be interesting to say the least.

Things just keep getting more interesting. I just saw on Fox that Elon Musk has said that he is open to the idea of him taking over SVB and converting it to a digital bank.

Ok. So what the hell is a "digital bank".

quote:

Originally posted by Bassamatic:
Ok. So what the hell is a "digital bank".

It’s a bank with no brick & mortar branches. For example, I use a digital bank for my rainy day fund because their money market pays more the 95% of banks’ CDs.

My sister is caught up in this and stands to lose or delay her 2 month severance package. I'm more concerned about her health insurance benefits getting cutting cut early, she's having cancer surgery tomorrow and still has a month or two of radiation treatment after. She has been working remotely in her small Texas town for a California startup, and her paychecks come out of Silicon Valley Bank. I was really happy for her finding the job as it it cut out her 2 hour round trip commute to Houston everyday.

The company leaders were going to cashout by selling their off their technology, laying off the non-tech employees and closing the company. Her last work day was Friday. She doesn't need this aggravation.

In the big picture, I don't support bailouts and don't care if SVB goes under. I also hope the deal for the sale of the company my sister was working for blows up. I'm pretty sure the deal was to close in the next two weeks and I bet it got nuked. All I care about is health insurance for my sister.

I'm sure we all remember: "Everything woke turns to shit."

quote:

Originally posted by tatortodd:
It’s a bank with no brick & mortar branches. For example, I use a digital bank for my rainy day fund because their money market pays more the 95% of banks’ CDs.

Thank you!

https://www.americanthinker.co...gulators_on_svb.html

Where were the regulators on SVB?
The Federal Reserve and FDIC get call reports every quarter to show each bank's financial conditions. Those are public reports that the "experts" on Wall Street can also see.

The report for SVB, or, Silicon Valley Bank, for Sept. 30, 2022 showed that if SVB had to recognize the losses on its portfolio, it had negative equity. The reports also show how many uninsured deposits they have, which appear to be over 90% of their total deposits. These are not core deposits.

Essentially, when investment rates were near zero, SVB took in massive amounts of volatile deposits and invested in longer-term bonds. As inflation and yields started rising, the market value of the investments were tanking.

So why didn't the FDIC, and the Federal Reserve, start putting severe restrictions on SVB to protect the customers and the taxpayers since that is their main job?

Were they more focused on climate change and diversity than financial stability?

Heres what the bank looked like to market participants:
SVB’s Balance-Sheet Time Bomb Was ‘Sitting in Plain Sight,’ Short Seller Says

So-called banking expert Sen. Elizabeth Warren, and other supporters of big government as the solution to everything, should be asked why the bureaucrats didn't spot that elephant in the room.

How many other banks have the same liquidity issues that SVB had? A huge number clearly have mark-to-market problems?

Lessons for Depositors:

Do not keep deposits above the insured limits at any bank.

If you want to put excess deposits in a bank, ask them for a repurchase agreement where they essentially put up a security as collateral for the excess money.

Lessons for Investors:

Don't trust so-called experts, especially people like Jim Cramer of CNBC, who recommended FTX, and SVB in February of this year. If he, or any analyst had looked at the balance sheet, they should have seen the problem.

quote:

Israel National News- Finance Ministry establishes special team to face SVB collapse consequences

Interesting the global reach of this.

https://www.israelnationalnews.com/news/368574

quote:

Originally posted by parabellum:
I wouldn't want to be that Jim guy right now. I don't know the particulars of this matter, but to me, this is an indication that financial analysts fall into three broad categories- outright crooks, those who are making educated guesses, and those who are just plain guessing.

Cramer is a joke. Local financial talk show guy has basically said if you don't want to lose money, watch Cramer and don't do anything he recommends. He's wrong FAR more than right in his picks.

A "stablecoin" scam is directly connected to this fiasco. Some scam coin exchange called US Coin. They claimed dollar for dollar backing in SVB and it was only around .40¢. Hopefully there will be prison time for them for the scam.

Now they are plummeting in value just like any scam fake go poof money should.

Look at the stuff being discussed in this thread and in all the online articles about this collapse. How is the common man supposed to comprehend all of this? All I see is a system which has been created to be so confoundingly complex that most people cannot understand it, and this is done in order to steal and do nothing but steal.

Corruptissima re publica plurimae leges : "The more numerous the laws, the more corrupt the state." - Tacitus

I didn't realize there were that many start up companies, I wonder who shorted the bank stocks, stuff like that would uncover some of the theft. I would be tracking down who is profiting from this.

Treasury Sec. Janet Yellen says no federal bailout for SVB.

https://www.breitbart.com/news...silicon-valley-bank/

quote:

Originally posted by tatortodd:

quote:

Originally posted by Bassamatic:
Ok. So what the hell is a "digital bank".

It’s a bank with no brick & mortar branches. For example, I use a digital bank for my rainy day fund because their money market pays more the 95% of banks’ CDs.

Yep. My rainy day fund is in a digital bank paying nearly 4.5% interest on their savings accounts. The brick-and-mortar bank that has my checking account still only offers 0.01% interest on savings accounts.

A number of brick-and-mortar banks have even spun off subsidiary digital-only banks, which allows them to offer stuff like higher rates due to the lower overhead costs.

lots of info here:

https://hotair.com/tree-huggin...bank-failure-n536385

snip:

Gregory Becker, CEO

Up to the bank’s collapse Friday, he was on the board of directors for the San Francisco Fed

The chief executive officer of failed Silicon Valley Bank, Greg Becker, is no longer on the board of directors at the Federal Reserve Bank of San Francisco.

Becker’s departure was effective on Friday, a spokesperson for the Federal Reserve said. Earlier on Friday, Silicon Valley Bank was closed by regulators.

The spokesperson declined to say how Becker exited the San Francisco Fed board. Becker served as a Class A director at the San Francisco Fed, one of three finance executives representing member banks in the San Francisco Fed district.

It also turns out that in 2015, he’d lobbied Congress to loosen up oversight of his little bank after it reached a certain threshold that normally triggered increased scrutiny. He wanted the limit raised from $50B to $250B before they had to comply. His argument was basically that they knew what they were doing, so why not leave well enough alone?

Becker told Congress about ‘SVB’s deep understanding of the markets it serves, our strong risk management practices.’

He argued that his bank would soon reach $50 billion in assets, which under the law would trigger ‘enhanced prudential standards,’ including more stringent regulations, stress tests, and capital requirements for his and other similarly sized banks.

…’Given the low risk profile of our activities and business model, such a result would stifle our ability to provide credit to our clients without any meaningful corresponding reduction in risk.’

The lobbying paid off in 2019.

The Federal Reserve proposed regulations implementing the deregulatory law – despite warnings from financial watchdogs that its regulations on Category IV institutions — as SVB was later classified due to its size and other risk factors — were far too weak.

‘The proposal to significantly weaken enhanced prudential standards for Category IV firms could be disastrous,’ Better Markets, a nonprofit advocating for stricter financial regulations, wrote in a comment on the Federal Reserve’s proposal.

He also kept the bank’s assets below the $250B threshold, so they never had to comply with the more stringent oversight regulations.