We got a bank collapse y'all

[Mike00]

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

Not to mention the long term investments they made on the start-up side. Whoever buys - will make tons of money off this deal. Frankly the govt shouldn’t allow it to happen.

 

[MWHC22]

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.

it doesn't matter if i think depsoits over $250k should get fucked as thats not what this discusion is about. don't change the subject just to try and argue more.

here are some facts for you
- the $250k deposit limit IS NOT NEW. it has been around a long time and is literally part of managing your wealth as a rich person. for example about 10 yrs ago i had a customer who had north of $180 million in cash and investments in accounts at my company (this didn't count what he had elsewhere either) anyway he had like 79 trusts or something ridiculous set up to house all his wealth because legally each one gets the $250k protection ...a similar thing applies to investments with SIPC coverage. if our company went under he wanted to make sure he was not going to lose all his cash. all his investments were still his and could just be re-registered/transferred to another brokerage firm.

if people didn't take action to protect themselves...thats on them. its not for me to decide if they should get fucked or not...they already decided that on their own and your opinion nor mine matters much at all in that regard because if the system allows for you to prtect yourself and you don't... then their are consequences and it doesn't matter if you like it or not. they don't get fucked so much but instead just suffer for their choices. if you want to feel bad thats fine but you can't choose to white knight some people and not others because there are millions of other people who do get fucked or also suffer from their own decisions that you seemly don't care about because i don't see you arguing for them here

 

[rcm]

it doesn't matter if i think depsoits over $250k should get fucked as thats not what this discusion is about. don't change the subject just to try and argue more.

here are some facts for you
- the $250k deposit limit IS NOT NEW. it has been around a long time and is literally part of managing your wealth as a rich person. for example about 10 yrs ago i had a customer who had north of $180 million in cash and investments in accounts at my company (this didn't count what he had elsewhere either) anyway he had like 79 trusts or something ridiculous set up to house all his wealth because legally each one gets the $250k protection ...a similar thing applies to investments with SIPC coverage. if our company went under he wanted to make sure he was not going to lose all his cash. all his investments were still his and could just be re-registered/transferred to another brokerage firm.

if people didn't take action to protect themselves...thats on them. its not for me to decide if they should get fucked or not...they already decided that on their own and your opinion nor mine matters much at all in that regard because if the system allows for you to prtect yourself and you don't... then their are consequences and it doesn't matter if you like it or not. they don't get fucked so much but instead just suffer for their choices. if you want to feel bad thats fine but you can't choose to white knight some people and not others because there are millions of other people who do get fucked or also suffer from their own decisions that you seemly don't care about because i don't see you arguing for them here

Why the fuck would I argue for them in a thread about bank collapse

 

[stevezissou]

it doesn't matter if i think depsoits over $250k should get fucked as thats not what this discusion is about. don't change the subject just to try and argue more.

here are some facts for you
- the $250k deposit limit IS NOT NEW. it has been around a long time and is literally part of managing your wealth as a rich person. for example about 10 yrs ago i had a customer who had north of $180 million in cash and investments in accounts at my company (this didn't count what he had elsewhere either) anyway he had like 79 trusts or something ridiculous set up to house all his wealth because legally each one gets the $250k protection ...a similar thing applies to investments with SIPC coverage. if our company went under he wanted to make sure he was not going to lose all his cash. all his investments were still his and could just be re-registered/transferred to another brokerage firm.

if people didn't take action to protect themselves...thats on them. its not for me to decide if they should get fucked or not...they already decided that on their own and your opinion nor mine matters much at all in that regard because if the system allows for you to prtect yourself and you don't... then their are consequences and it doesn't matter if you like it or not. they don't get fucked so much but instead just suffer for their choices. if you want to feel bad thats fine but you can't choose to white knight some people and not others because there are millions of other people who do get fucked or also suffer from their own decisions that you seemly don't care about because i don't see you arguing for them here

I agree with your point but then there is the "fallout"

People don't get paid
Bills go delinquent
Counterparty risk
Credit markets dry up
More companies/banks/counterparties start failing

It is SYSTEMIC

 

[MWHC22]

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


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.

bruh... you are literally saying you don't want their to be consequences because you don't want to have them.
if i jump out of plane without a parachute i can not want to die when i hit land all i want but my wishes are not going to change my decision that was made in the past. the consequences are already locked in.

the reset is needed. how we get there is up in the air but kicking the can down the road because you don't want to hurt now isn't going to fix it. the system is broke...and it will either brake on its own in total disaster and anhialation...or we let it brake in bits now as we go along and try to fix and remediate as much as we can along the way

 

[Ariez]

it doesn't matter if i think depsoits over $250k should get fucked as thats not what this discusion is about. don't change the subject just to try and argue more.

here are some facts for you
- the $250k deposit limit IS NOT NEW. it has been around a long time and is literally part of managing your wealth as a rich person. for example about 10 yrs ago i had a customer who had north of $180 million in cash and investments in accounts at my company (this didn't count what he had elsewhere either) anyway he had like 79 trusts or something ridiculous set up to house all his wealth because legally each one gets the $250k protection ...a similar thing applies to investments with SIPC coverage. if our company went under he wanted to make sure he was not going to lose all his cash. all his investments were still his and could just be re-registered/transferred to another brokerage firm.

if people didn't take action to protect themselves...thats on them. its not for me to decide if they should get fucked or not...they already decided that on their own and your opinion nor mine matters much at all in that regard because if the system allows for you to prtect yourself and you don't... then their are consequences and it doesn't matter if you like it or not. they don't get fucked so much but instead just suffer for their choices. if you want to feel bad thats fine but you can't choose to white knight some people and not others because there are millions of other people who do get fucked or also suffer from their own decisions that you seemly don't care about because i don't see you arguing for them here

What would you do if youre a startup company that just got a $100M check from a VC to grow your company?

Open 12,000 accounts and then have them all integrate into one service so they can make payroll?

 

[MWHC22]

Why the fuck would I argue for them in a thread about bank collapse

because "them" are getting fucked from bank collapses all the time. before you were born...today...and tomorrow too. you just don't care enough because they don't have their own thread

 

[gimpshiznit]

it doesn't matter if i think depsoits over $250k should get fucked as thats not what this discusion is about. don't change the subject just to try and argue more.

here are some facts for you
- the $250k deposit limit IS NOT NEW. it has been around a long time and is literally part of managing your wealth as a rich person. for example about 10 yrs ago i had a customer who had north of $180 million in cash and investments in accounts at my company (this didn't count what he had elsewhere either) anyway he had like 79 trusts or something ridiculous set up to house all his wealth because legally each one gets the $250k protection ...a similar thing applies to investments with SIPC coverage. if our company went under he wanted to make sure he was not going to lose all his cash. all his investments were still his and could just be re-registered/transferred to another brokerage firm.

if people didn't take action to protect themselves...thats on them. its not for me to decide if they should get fucked or not...they already decided that on their own and your opinion nor mine matters much at all in that regard because if the system allows for you to prtect yourself and you don't... then their are consequences and it doesn't matter if you like it or not. they don't get fucked so much but instead just suffer for their choices. if you want to feel bad thats fine but you can't choose to white knight some people and not others because there are millions of other people who do get fucked or also suffer from their own decisions that you seemly don't care about because i don't see you arguing for them here

i think you have a fundamental misunderstanding of a bank v a brokerage

 

[rcm]

@MWHC22 what part of the industry are you in?

 

[gimpshiznit]

if i had 180mm and i spent my time setting up 100 trusts in 100 different institutions so i could stay under the $250k insurance cap....oof talk about misplaced understanding of risk

 

[MWHC22]

What would you do if youre a startup company that just got a $100M check from a VC to grow your company?

Open 12,000 accounts and then have them all integrate into one service so they can make payroll?

i wouldn't do that because thats not how its done. are you just trying to make stuff up to continue the argument? i literally just said i knew a guy who did it with 79 or so accounts and you talk about 12,000 accounts. start ups don't sit on $100m in cash anyway unless they are also not doing their due dilligence. no one needs $100m to cover payroll

one of my last jobs made about $250m a year in revenue. we only had about $3m cash at any given time. we had funds at multiple banks in multiple accounts and entities blah blah blah blah.
anyway you can either beleive people fucked up here and stop arguing about it to defend them... or go spend a few years learning the industry and come back and let us know you understand now. i nor anyone else is going to give a class in how to run a business that deals with hundreds of millions or billions of dollars inside of some posts on OT to explain it to you so you will stop arguing.

 

[rcm]

i wouldn't do that because thats not how its done. are you just trying to make stuff up to continue the argument? i literally just said i knew a guy who did it with 79 or so accounts and you talk about 12,000 accounts. start ups don't sit on $100m in cash anyway unless they are also not doing their due dilligence. no one needs $100m to cover payroll

one of my last jobs made about $250m a year in revenue. we only had about $3m cash at any given time. we had funds at multiple banks in multiple accounts and entities blah blah blah blah.
anyway you can either beleive people fucked up here and stop arguing about it to defend them... or go spend a few years learning the industry and come back and let us know you understand now. i nor anyone else is going to give a class in how to run a business that deals with hundreds of millions or billions of dollars inside of some posts on OT to explain it to you so you will stop arguing.

lmao this guy

 

[gimpshiznit]

i wouldn't do that because thats not how its done. are you just trying to make stuff up to continue the argument? i literally just said i knew a guy who did it with 79 or so accounts and you talk about 12,000 accounts. start ups don't sit on $100m in cash anyway unless they are also not doing their due dilligence. no one needs $100m to cover payroll

one of my last jobs made about $250m a year in revenue. we only had about $3m cash at any given time. we had funds at multiple banks in multiple accounts and entities blah blah blah blah.
anyway you can either beleive people fucked up here and stop arguing about it to defend them... or go spend a few years learning the industry and come back and let us know you understand now. i nor anyone else is going to give a class in how to run a business that deals with hundreds of millions or billions of dollars inside of some posts on OT to explain it to you so you will stop arguing.

from what ive read recently...there might have been 3 ppl at SVB that knew shit was fucked up a cpl days ahead of the blowup. I am not sure we can expect depositors to have greater due diligence ability than the internal risk department at a bank that literally has up-to-the minute details on their securities portfolio and AFS/HTM breakdown

 

[gimpshiznit]

while early in the thread i was skeptical of the moral hazard going forward....Im of the opinion right now that a full guarantee of deposits was and is the right move.

 

[MWHC22]

if i had 180mm and i spent my time setting up 100 trusts in 100 different institutions so i could stay under the $250k insurance cap....oof talk about misplaced understanding of risk

1 - you wouldn't do that if you had that kind of cash... you pay people to do it while you drink margaritas on the beach.
2 - you also don't sit on that kind of cash...sitting on cash itself is a risk as it loses value over time due to inflation and other factors
3 - see number 1 and 2 its how rich people... like REALLY RICH people manage their funds. you might not like it and want to poke fun but they have that kind fo wealth and we don't so it doesn't really matter if you like it or not.

but to bring this back to reality... are you tell me if you wanted to sit on $750k in cash it would be too difficult for you to have it in more than one bank or to have your wife hold $250k of it and then you can split it in half 2 other ways to be covered?

 

[gimpshiznit]

1 - you wouldn't do that if you had that kind of cash... you pay people to do it while you drink margaritas on the beach.
2 - you also don't sit on that kind of cash...sitting on cash itself is a risk as it loses value over time due to inflation and other factors
3 - see number 1 and 2 its how rich people... like REALLY RICH people manage their funds. you might not like it and want to poke fun but they have that kind fo wealth and we don't so it doesn't really matter if you like it or not.

but to bring this back to reality... are you tell me if you wanted to sit on $750k in cash it would be too difficult for you to have it in more than one bank or to have your wife hold $250k of it and then you can split it in half 2 other ways to be covered?

i assume you already know this due to your experience with high net worth folks....but many of the mid to large banks actually have several underlying institutions (Schwab for example has 3) and they're able to journal your cash over all their underlying institutions, each of which gets the $250k coverage. So you and your spouse could sit on $1mm at Schwab and be fully insured.

again, im sure you already knew this

 

[MWHC22]

from what ive read recently...there might have been 3 ppl at SVB that knew shit was fucked up a cpl days ahead of the blowup. I am not sure we can expect depositors to have greater due diligence ability than the internal risk department at a bank that literally has up-to-the minute details on their securities portfolio and AFS/HTM breakdown

waaay more than that... this was a noted risk a long time ago. months and years even. their risk officer spelled it out for them and they didn't listen... risk officer left...they hadn't had a risk officer for the last 9 months

 

[Ariez]

i wouldn't do that because thats not how its done. are you just trying to make stuff up to continue the argument? i literally just said i knew a guy who did it with 79 or so accounts and you talk about 12,000 accounts. start ups don't sit on $100m in cash anyway unless they are also not doing their due dilligence. no one needs $100m to cover payroll

one of my last jobs made about $250m a year in revenue. we only had about $3m cash at any given time. we had funds at multiple banks in multiple accounts and entities blah blah blah blah.
anyway you can either beleive people fucked up here and stop arguing about it to defend them... or go spend a few years learning the industry and come back and let us know you understand now. i nor anyone else is going to give a class in how to run a business that deals with hundreds of millions or billions of dollars inside of some posts on OT to explain it to you so you will stop arguing.

You need to realize that sometimes unlucky shit just happens. You have the benefit to sit back and criticize every nuances when that shit does not happen to you. Its called risk management, not risk minimization.

 

[gimpshiznit]

waaay more than that... this was a noted risk a long time ago. months and years even. their risk officer spelled it out for them and they didn't listen... risk officer left...they hadn't had a risk officer for the last 9 months

idk about years. this all started when their deposits doubled and they bot a bunch of long assets at low yields hoping they'd not be forced to liquidate at higher rates in large batches to cover redemptions

 

[MWHC22]

i assume you already know this due to your experience with high net worth folks....but many of the mid to large banks actually have several underlying institutions (Schwab for example has 3) and they're able to journal your cash over all their underlying institutions, each of which gets the $250k coverage. So you and your spouse could sit on $1mm at Schwab and be fully insured.

again, im sure you already knew this

yes most institutions do that. but if you are over the limit with that firm... then you have to start playing the game if you want full coverage. lets say i had $500k was a single guy and only wanted one firm and they didn't offer any subsidiaries to expand the coverage.
i could get $250k FDIC coverage in a bank account...and then another $250k SIPC coverage in a brokerage account. you play the game or you are at risk...thats just how it is.

 

[gimpshiznit]

yes most institutions do that. but if you are over the limit with that firm... then you have to start playing the game if you want full coverage. lets say i had $500k was a single guy and only wanted one firm and they didn't offer any subsidiaries to expand the coverage.
i could get $250k FDIC coverage in a bank account...and then another $250k SIPC coverage in a brokerage account. you play the game or you are at risk...thats just how it is.

im not even sure what your point is with all this. ill see myself out

 

[MWHC22]

You need to realize that sometimes unlucky shit just happens. You have the benefit to sit back and criticize every nuances when that shit does not happen to you. Its called risk management, not risk minimization.

this wasn't luck... they didn't minimize risk or manage the risk...they just went in and rode it out until it blew up. they were told it was coming over a year ago at minimum within their internal ranks. you can't defend this...they just fucked up and no one wants to admit it because it makes the regulators look bad that they didn't get involved earlier

no one wants people to lose money because of something someone else did...it sucks... unfortunately risks exist and being blind to it is going to bite some people and not others

 

[10dementianal]

goddamn rabbit holes

 

[MWHC22]

im not even sure what your point is with all this. ill see myself out

the point is if people put all their cash in SVB without playing the coverage game...their choices exposed them to not have FDIC covrage for their entire deposit. they could have mitigated or eliminated the risk but didn't. the bailout is the result of the government saying we will cover it anyway even though no one involved put in the work to protect themselves

 

[Ariez]

this wasn't luck... they didn't minimize risk or manage the risk...they just went in and rode it out until it blew up. they were told it was coming over a year ago at minimum within their internal ranks. you can't defend this...they just fucked up and no one wants to admit it because it makes the regulators look bad that they didn't get involved earlier

no one wants people to lose money because of something someone else did...it sucks... unfortunately risks exist and being blind to it is going to bite some people and not others

If further information comes out that they were malicious then I will change my mind. Right now I dont think there is anything they did that every other banks are not doing. (Other than what @stevezissou provided signing the exclusivity clause).