We got a bank collapse y'all

[garbagemanlb]

Not to get all pol, but my dad is blaming this on "wokeness", where is he getting this shit from? He's geriatric af and wouldn't come up with that dumb shit on his own.

Also it's weird hearing my dad talk about "wokeness", kinda like when geezers try to use young people slang.

There really should be an upper age limit for social media

 

[Ariez]

How is the Fed gonna make everyone whole without government, taxpayer, money?

After 2008 the fed made banks put money into a pool (that's worth 100 billion right now) and they're going to use that.

Also SVB remaining assets after everything is auctioned off and sold. They still have billions in bonds that can be sold for off for 90% of it's worth.

At the end of the day, I'm pretty sure SVB assets is worth 80 to 85% of depositors IOUs if not more.

 

[NULL_bits]

Daily Show aired segments of Fox News blaming it on SVB hiring too many non white men, so it was going to fail eventually.



The fucking garbage Fox News viewers gets fed

Good god that's so fucking cringy (FOX not the TDS segment). It's absolutely horrifying that this is the most watched cable "news" network.

 

[Ariez]

Good god that's so fucking cringy (FOX not the TDS segment). It's absolutely horrifying that this is the most watched cable "news" network.

Get woke, go broke IIRC.

 

[Burmonster]

KPMG most likely isnt wrong in their reports...

I’m sure it’s accurate. I’m just annoyed at the price.

 

[Ariez]

I’m sure it’s accurate. I’m just annoyed at the price.

I was referring to their analysis of SVB

 

[Jeebus]

Moody's cuts outlook on U.S. banking system to negative, citing 'rapidly deteriorating operating environment'

www.cnbc.com

 

[Jon91SE]

Moody's cuts outlook on U.S. banking system to negative, citing 'rapidly deteriorating operating environment'

www.cnbc.com

Lmao


Someone sounds like they are short

 

[Snake Pliskin]

After 2008 the fed made banks put money into a pool (that's worth 100 billion right now) and they're going to use that.

Also SVB remaining assets after everything is auctioned off and sold. They still have billions in bonds that can be sold for off for 90% of it's worth.

At the end of the day, I'm pretty sure SVB assets is worth 80 to 85% of depositors IOUs if not more.

I'm ignorant of much of this so I have a couple more questions please.

The bank has 211 billion in assets, and 175 billion in deposits. So that math suggests all the depositors are covered correct? But that depends on whether or not the depositors demand their money in full? Which is unlikely. If the depositors know they will be covered they are unlikely to pull their funds since it appears the bank will be absorbed by other banks. Other banks are right now negotiating how much they are going to pay SVB for their bond assets? Hypothetically a bank like Chase could buy SVBs bonds for 90 cents on the dollar as you suggested, but Chase would not be liable to make whole SVBs depositors? And finally, for now, do those banks that contributed to the 100 billion dollar money pool get reimbursed in any way, or do they just accept that they contributed to the system. A cost of doing business so to say.

Thank you.

 

[stevezissou]

I'm ignorant of much of this so I have a couple more questions please.

The bank has 211 billion in assets, and 175 billion in deposits. So that math suggests all the depositors are covered correct? But that depends on whether or not the depositors demand their money in full? Which is unlikely. If the depositors know they will be covered they are unlikely to pull their funds since it appears the bank will be absorbed by other banks. Other banks are right now negotiating how much they are going to pay SVB for their bond assets? Hypothetically a bank like Chase could buy SVBs bonds for 90 cents on the dollar as you suggested, but Chase would not be liable to make whole SVBs depositors? And finally, for now, do those banks that contributed to the 100 billion dollar money pool get reimbursed in any way, or do they just accept that they contributed to the system. A cost of doing business so to say.

Thank you.

Big assumption is how much of a "built in loss" or "built in gain" is in those 211 billion in assets or how liquid they are.

That is where the rub is.

Historical cost versus mark to market etc

 

[Remy Bressant]

Aged perfectly.

If people didnt panic due to a fucking tweet and created a bank run of SVB, it will still be operational today.

A tweet
One of the biggest players in that world saying get your money out is a little more than a tweet

 

[Mike00]

I'm not sure any bank can survive a true "bank run" if you understand how our fractional banking system works.

And yet some people want to let it happen even with the big banks like Citi or JPMC. My eyeballs want to explode everybody somebody says let them all burn down. The entire financial system and therefore our economy given how we operate today would be at risk.

 

[stevezissou]

And yet some people want to let it happen even with the big banks like Citi or JPMC. My eyeballs want to explode everybody somebody says let them all burn down. The entire financial system and therefore our economy given how we operate today would be at risk.

SYSTEMIC

 

[MWHC22]

It’s not like they were day-trading. They put their assets into traditionally safe bonds. If you buy a coupon with a 2% yield, and the fed keeps cranking up rates where traders can buy bonds with a 6% yield, you’ve crushed the portfolio of those holding the 2% coupons. It’s an unintended consequence of aggressively raising rates. It tanked the stock, stoked fear, and then everyone panicked and took their money out.

just admit you barely have basic level understanding of investing strategy and stop now before you dig yourself a hole. every post you make is basically "SVB was doing what they were supposed to" despite several OT'ers posting factual evidence to the contrary that proves SVB was basically dumb shits and didn't act like most banks would and should with their investments

cliffs - SVB dug themselves a hole being stupid and putting all their eggs in one basket
you can post whatever you want to defend them but you will be wrong because you can't defend inaction and lack of risk management by a bank who is supposed to literally be professional at it and instead they acted like a robinhood investor from wallstreet bets.

El fin

 

[Hisma]

And yet some people want to let it happen even with the big banks like Citi or JPMC. My eyeballs want to explode everybody somebody says let them all burn down. The entire financial system and therefore our economy given how we operate today would be at risk.

People equate banks failing to rich people getting fucked. When in reality if our financial system collapses, we all fucked.
Lots of better ways to stick it to rich people than having our bedrock institutions fail.

 

[MWHC22]

And yet some people want to let it happen even with the big banks like Citi or JPMC. My eyeballs want to explode everybody somebody says let them all burn down. The entire financial system and therefore our economy given how we operate today would be at risk.

so you are saying they shouldn't have to be responsible for their actions and suffer the consequences but they can reap all the benefits?
how do you pick and choose who gets bailed out and given handouts instead of letting them collapse and fail? if you lose your job and can't pay your mortgage do you get bailed out too or should we just let your life burn?

 

[MWHC22]

People equate banks failing to rich people getting fucked. When in reality if our financial system collapses, we all fucked.
Lots of better ways to stick it to rich people than having our bedrock institutions fail.

you do realize that rich people are the banks right? bailing out banks because the system was designed to be "you need us or else" makes it a safe space to be rich.
the "better way" you speak of would be to retool the whole system to eliminate the "you need us" part of it.

 

[Ariez]

I'm ignorant of much of this so I have a couple more questions please.

The bank has 211 billion in assets, and 175 billion in deposits. So that math suggests all the depositors are covered correct?

Thank you.

Yes the 'current' math works out that way. A billion dollar 5 year tbill at 2% is worth less than a billion dollars at this moment even though on the books its worth more.

When hedge funds steps in and offer 60 cents on the dollar, you should know theyre worth at least 85% on the dollar

 

[rcm]

so you are saying they shouldn't have to be responsible for their actions and suffer the consequences but they can reap all the benefits?
how do you pick and choose who gets bailed out and given handouts instead of letting them collapse and fail? if you lose your job and can't pay your mortgage do you get bailed out too or should we just let your life burn?

You think all depositors over $250k should get fucked any time a bank fails?

The bank going under/execs losing their jobs while depositors get saved is the only realistic solution. Which is what happened here.

 

[Hisma]

you do realize that rich people are the banks right? bailing out banks because the system was designed to be "you need us or else" makes it a safe space to be rich.
the "better way" you speak of would be to retool the whole system to eliminate the "you need us" part of it.

I've said before tho. My attitude is fuck the actual bank and shareholders etc. Depositors (us normies) shouldn't need to stress about their money they deposited into their local bank disappearing overnight. Yes fix the laws so that it's much harder for that to happen. I realize you can't completely eliminate risk. But the shit SVB was doing should have people in jail. They literally bragged publicly about how strong they are as the execs front ran and made millions before they collapsed.

 

[NULL_bits]

And yet some people want to let it happen even with the big banks like Citi or JPMC. My eyeballs want to explode everybody somebody says let them all burn down. The entire financial system and therefore our economy given how we operate today would be at risk.

I guess the alternative is to keep bailing them out because they can't seem to stop fucking up. It's basically like giving a crackhead money because they super-promise not to buy crack next time, after awhile you realize you're just kicking the can and the inevitable will happen again. They can't help themselves.

 

[MWHC22]

I'm ignorant of much of this so I have a couple more questions please.

The bank has 211 billion in assets, and 175 billion in deposits. So that math suggests all the depositors are covered correct? But that depends on whether or not the depositors demand their money in full? Which is unlikely. If the depositors know they will be covered they are unlikely to pull their funds since it appears the bank will be absorbed by other banks. Other banks are right now negotiating how much they are going to pay SVB for their bond assets? Hypothetically a bank like Chase could buy SVBs bonds for 90 cents on the dollar as you suggested, but Chase would not be liable to make whole SVBs depositors? And finally, for now, do those banks that contributed to the 100 billion dollar money pool get reimbursed in any way, or do they just accept that they contributed to the system. A cost of doing business so to say.

Thank you.

its more complicated than that but...
SVB's assets need to be sold off to be useable to cover the deposits. aka if its customers need to move or use their cash... SVB doesn't have enough to give it to them as is. the FDIC and special coverage announced this weekend will basically make sure the customers get their money and they will try to recoup as much as they can by selling off SVB assets. ie big daddy will pay off your loans but sell all your shit and take what he can to get back his money. buyers of those assets are not affiliated with SVB necessarily depending on how the transition and break up of the bank goes through and what the buyers are purchasing. buying SVB's investments at a discount is not much different that you buying them at a discount other than most if not all will be institutional trades outside of the normal trading channels you and i have with our personal accounts.

the fund and fees the banks pay is part of doing business for them... they pass those costs on to customers in various ways and forms. the announcement this weekend advised of new special fee but who knows what the news was actually referring to as it may be a reference to the fund that it already in existance or it may be a new fee

 

[Ariez]

just admit you barely have basic level understanding of investing strategy and stop now before you dig yourself a hole. every post you make is basically "SVB was doing what they were supposed to" despite several OT'ers posting factual evidence to the contrary that proves SVB was basically dumb shits and didn't act like most banks would and should with their investments

cliffs - SVB dug themselves a hole being stupid and putting all their eggs in one basket
you can post whatever you want to defend them but you will be wrong because you can't defend inaction and lack of risk management by a bank who is supposed to literally be professional at it and instead they acted like a robinhood investor from wallstreet bets.

El fin

We still dont know what they did or didnt do. I doubt they "put all their eggs in one basket". No bank is this stupid at risk management, and from everything I read on SVB it was trusted well run bank. They had a lot in treasury bonds, which are locked up for 5 years, or they can sell at a loss (a bigger loss since interest rates keeps climbing). They were trying to raise funds to not sell at a loss and wanted to keep to maturity, this spooked big shot VCs with a huge twitter following, and then caused everyone to want their money back. It was a self fulling prophecy.

As far as we know at this moment (not much), SVB did what every single financial instution is doing and expected to be doing. If this happened to JPM, they would also be in the same situation. The only benefit JPM has is that they have a 'better' reputation and may not have caused such a contagion of panic.

 

[Mike00]

People equate banks failing to rich people getting fucked. When in reality if our financial system collapses, we all fucked.
Lots of better ways to stick it to rich people than having our bedrock institutions fail.

Yep people don’t understand how their lives revolve around liqduidity. Especially home ownership.

so you are saying they shouldn't have to be responsible for their actions and suffer the consequences but they can reap all the benefits?
how do you pick and choose who gets bailed out and given handouts instead of letting them collapse and fail? if you lose your job and can't pay your mortgage do you get bailed out too or should we just let your life burn?

No Hisma and I are trying to point out that the country runs on credit and liquidity. If you let one of the big banks fail i.e the ones with trillions in money not only do all banks fail but you hit every sector and crash the globe. Call it whatever will but you being talking about a total economic reset. So yes I have a problem saying let the big banks fail. I have problem that we let a jerk off like Thiel crash a bank, even a tiny one which SVB is, and then the PE/VC teams now want to buy them. You can’t play with the US economy that way - it’s the kind of reason why SEC exists over stocks.

Consequences depends on so many variables. BUt I’d love to have lifetime bans from working in the industyr, and possibly criminal charges depending on the degree. But no I’m not cool with destroying the entire country as we know it. Any of the big 4 crashing it would do it. BTW they would take the globe.

Housing prices for example - no more 30 year products, no more low interest. We’d probably go to 75% value overnight of the current median. How many trillions wiped out? Everybody would be hit. You aren’t talking recession level events here.

 

[stevezissou]

We still dont know what they did or didnt do. I doubt they "put all their eggs in one basket". No bank is this stupid at risk management, and from everything I read on SVB it was trusted well run bank. They had a lot in treasury bonds, which are locked up for 5 years, or they can sell at a loss (a bigger loss since interest rates keeps climbing). They were trying to raise funds to not sell at a loss and wanted to keep to maturity, this spooked big shot VCs with a huge twitter following, and then caused everyone to want their money back. It was a self fulling prophecy.

As far as we know at this moment (not much), SVB did what every single financial instution is doing and expected to be doing. If this happened to JPM, they would also be in the same situation. The only benefit JPM has is that they have a 'better' reputation and may not have caused such a contagion of panic.

Big difference something like 80 or 90% of SVB depositors had balances over the FDIC $250K coverage limit

AND

If you took out debt from them then they made the customers sign "exclusive banking agreements" where these companies couldn't use any other banks.

Talk about a HUGE problem which going forward those "exclusive banking agreements" should be banned at all FDIC institutions.

So companies were double exposed.

1. Over FDIC insured limits
2. No secondary bank for diversification of risk