We got a bank collapse y'all

[Dylith]

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.

This is what @stevezissou believes is one of the main causes as well.

 

[Menger]

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.

It’s not that they ‘didn’t want’ to sell at a loss - they couldn’t. Since the paper losses in their HTM assets were so large, they could not sell a single item in that basket and thus mark to market the HTM assets, or they were instantly insolvent. Without a bank run, they wouldn’t have needed to sell any of that HTM portfolio and selling some of their liquid, marketable AFS assets were plenty to meet depositor demands. But then those depositor demands exceeded their AFS liquidity. Poof, gone.

 

[MWHC22]

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).

it likely is NOT malicious at all... they were just ignorant and negligent and it blew up on them ...however the SVB powers that be can still be hit with the regulator's hammer to some extent even if it wasn't malicious because they will be expected to be in the know and act in good faith. any evidence at all such as them not having a risk officer after their previous one left because they wouldn't listen him...paints them into a dark corner without much help

 

[Mike00]

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

The reset of all wealth in this country and the globe? Sounds like a killer plan. It’s worked out so well for countries in Africa and Latin America who have been through a massive currency reset…..

 

[rcm]

it likely is NOT malicious at all... they were just ignorant and negligent and it blew up on them ...however the SVB powers that be can still be hit with the regulator's hammer to some extent even if it wasn't malicious because they will be expected to be in the know and act in good faith. any evidence at all such as them not having a risk officer after their previous one left because they wouldn't listen him...paints them into a dark corner without much help

Has this stuff about them "not listening" to their previous risk officer been reported? Or are you making that up?

 

[Ron]

The reset of all wealth in this country and the globe? Sounds like a killer plan. It’s worked out so well for countries in Africa and Latin America who have been through a massive currency reset…..

Curious you cite references that have heavy influence from colonizers…

 

[Burmonster]

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.

I think the innate frustration stims from the fact that banks and the speculative operations that they partake in have become a "bedrock" institution.

 

[Dylith]

I think the innate frustration stims from the fact that banks and the speculative operations that they partake in have become a "bedrock" institution.

Also wealthy or at least highly paid people extracting economic rents from financial markets which are then associated (however rightly or wrongly) with general banking practices.

 

[Jon91SE]

I think the innate frustration stims from the fact that banks and the speculative operations that they partake in have become a "bedrock" institution.

I make @rcm ’s bedrock…… ayyyyyy

 

[kenmei]

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

if you name 5 beneficiaries you can have $1,250,000 coverage per institution

 

[Burmonster]

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

The bolded is not an unusual requirement FYI. Not justifying it but you are going to check a lot of systemic processes to remove this.

 

[Burmonster]

I am currently sitting in a hotel in Glendale after being in meetings all day yesterday and will have meetings later today to discuss with several PE firms funding that was tied up with SVB. Might be able to buy up debt at a discount rate with a equity stake on the backend. As long as the banking system at large doesn't collapse this should work well. If it collapses look for me to recreate this picture.

 

[Hisma]

I think the innate frustration stims from the fact that banks and the speculative operations that they partake in have become a "bedrock" institution.

Don't disagree bro. Welcome to late stage capitalism.

 

[Burmonster]

Don't disagree bro. Welcome to late stage capitalism.

I have taken the "If you can't beat 'em, join 'em approach"

 

[Menger]

I have taken the "If you can't beat 'em, join 'em approach"

Since it cost a lot to win
and even more to lose
you and me bound to spend some time
wondering what to choose

Robert Hunter, the gawd

 

[stevezissou]

The bolded is not an unusual requirement FYI. Not justifying it but you are going to check a lot of systemic processes to remove this.

Some changes are definitely in order wouldn't you say?

 

[Remy Bressant]

this is such a bad take

Won’t somebody think of the consultants!

 

[Simple]

Won’t somebody think of the consultants!

 

[JacksonWhite]

Did something happen? Why are banks gains moderating?

 

[Burmonster]

Some changes are definitely in order wouldn't you say?

Likely. I am just not sure how (or if) unwinding something like this would be possible. I'll leave it up to the folks work directly in that area to figure it out.

 

[Ron]

Because the stock market is fickle and is not based on logic

 

[DizzyEdge]

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.

Bail out the victims (depositors), don't bail out the business/shareholders

 

[stevezissou]

back stop the victims (depositors), don't bail out the business/shareholders

fixed

 

[TCMS]

This is what @stevezissou believes is one of the main causes as well.

Well I had someone try to tell me that the issue is easy to solve, simply put people in power that are not worried about the color of peoples' skin, making people feel comfortable and remove the wokeness. It's amazing!

 

[Dylith]

Well I had someone try to tell me that the issue is easy to solve, simply put people in power that are not worried about the color of peoples' skin, making people feel comfortable and remove the wokeness. It's amazing!

How did we not see it before!