Unforgiven Posted March 12, 2023 Share Posted March 12, 2023 (edited) The beginning of the next great depression, or another govt bailout. This is serious business. https://www.cnbc.com/2023/03/10/silicon-valley-bank-collapse-how-it-happened.html Interesting read on what the people who ran the bank were fixated on, no surprise. https://12ft.io/proxy?q=https%3A%2F%2Fwww.zerohedge.com%2Fnews%2F2023-03-10%2Flulz-svb-website Edited March 12, 2023 by Unforgiven 1 1 Link to comment Share on other sites More sharing options...
B-Man Posted March 12, 2023 Share Posted March 12, 2023 Shocked Not Shocked: Failed Silicon Valley Bank Victim of Its Own Woke Green Energy Priorities https://redstate.com/bobhoge/2023/03/12/shocked-not-shocked-failed-silicon-valley-bank-victim-of-its-own-woke-green-energy-priorities-n715294 . 1 2 1 1 Link to comment Share on other sites More sharing options...
LeviF Posted March 12, 2023 Share Posted March 12, 2023 Just your friendly reminder that everything - the “experts,” credentialers, the fourth estate, etc. - it’s all BS all the way down. You can safely ignore them. 1 Link to comment Share on other sites More sharing options...
B-Man Posted March 12, 2023 Share Posted March 12, 2023 WHY SILICON VALLEY BANK FAILED By John Hinderaker Economist John Phelan offers this succinct explanation of how government policies contributed to the collapse of SVB: On Friday regulators shuttered Silicon Valley Bank (SVB) and seized its deposits in the largest U.S. banking failure since the 2008 financial crisis and the second-largest ever. We shouldn’t be surprised. Neither should we relax. To recap: Between June 2006 and December 2008, the Federal Reserve’s target for the federal funds rate was cut from 5.25% to 0.00-0.25% as the economy crumbled and it stayed there until December 2015. By the end of 2019 it was still only at 1.50-1.75%. Then, in 2020, the Federal government borrowed vast sums of money in the name of fighting COVID-19. To keep the cost of all this borrowing down, the Federal Reserve printed a load of money and used it to buy Treasuries, effectively capping the government’s borrowing costs. This infusion of new money led to inflation, with the year over year change in the Consumer Price Index rising from 0.2% in May 2020 to 8.9% in June 2022. To fight this, the Federal Reserve is now stamping hard on the monetary brakes: the target range for the federal funds rate has been raised from 0.00-0.25% on March 16, 2022, to 4.50-4.75% now. As monetary loosening pushed Treasury yields down in 2020, so tightening has pushed those yields up in 2022. The Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity, Quoted on an Investment Basis, has risen from less than 1.00% through 2020 to over 4.00% more recently. These gyrations have roiled markets and led to the collapse of SVB. A financial institution, like SVB, essentially raises funds either wholesale (from capital markets) or retail (from depositors) at a rate of X% and makes loans that generate a return greater than that. When it seeks to raise funds, it is in competition with, among others, the Federal government. The government cannot go bankrupt – it can always get the Federal Reserve to print the money needed to cover its liabilities – so the rate at which the government borrows is a benchmark: If the government will pay you 4.00% to borrow with no risk of default (nominal, at least), you won’t lend to anyone at a rate below that. So, as Treasury yields – the price government has to pay to access capital – have risen as a result of the Federal Reserve’s monetary tightening, financial institutions find that the price they have to pay to access capital is rising also. This is the squeeze that caught SVB. Catering to fintech companies which, like the rest of the tech sector, have been taking a battering recently – look at all those job losses – SVB found that its depositors were withdrawing their capital More at the link: https://www.powerlineblog.com/archives/2023/03/why-silicon-valley-bank-failed.php . Link to comment Share on other sites More sharing options...
Mynamemike Posted March 12, 2023 Share Posted March 12, 2023 (edited) Lol https://www.svbsecurities.com/team/joseph-gentile/ Edited March 12, 2023 by Mynamemike Link to comment Share on other sites More sharing options...
Gene Frenkle Posted March 12, 2023 Share Posted March 12, 2023 It's all about to come crashing down. No bailout for SVB, says Yellen. Monday will be a bloodbath. 1 Link to comment Share on other sites More sharing options...
Gene Frenkle Posted March 12, 2023 Share Posted March 12, 2023 @B-Man SVB failed because they made risky long-term bets at 0% interest rates and weren't prepared for the Fed to raise rates so quickly to combat inflation. Guess what...they're not the only one. This is Wall Street getting addicted to free money and thinking it would never end. Their risk is all interconnected too. This has been brewing since 2008. I say eff em this time. Bail nobody out and let them fail like they should. The days of privatized gains and socialized losses need to end now. 2 Link to comment Share on other sites More sharing options...
ChiGoose Posted March 12, 2023 Share Posted March 12, 2023 5 minutes ago, Gene Frenkle said: @B-Man SVB failed because they made risky long-term bets at 0% interest rates and weren't prepared for the Fed to raise rates so quickly to combat inflation. Guess what...they're not the only one. This is Wall Street getting addicted to free money and thinking it would never end. Their risk is all interconnected too. This has been brewing since 2008. I say eff em this time. Bail nobody out and let them fail like they should. The days of privatized gains and socialized losses need to end now. You don’t understand. Something bad happened, so it has to be the fault of liberals somehow. 1 Link to comment Share on other sites More sharing options...
B-Man Posted March 12, 2023 Share Posted March 12, 2023 1 Link to comment Share on other sites More sharing options...
aristocrat Posted March 12, 2023 Share Posted March 12, 2023 If you think the fed is gonna let them fail you’re crazy Link to comment Share on other sites More sharing options...
Gene Frenkle Posted March 12, 2023 Share Posted March 12, 2023 3 minutes ago, aristocrat said: If you think the fed is gonna let them fail you’re crazy F em all Link to comment Share on other sites More sharing options...
Joe Ferguson forever Posted March 12, 2023 Share Posted March 12, 2023 52 minutes ago, Gene Frenkle said: @B-Man SVB failed because they made risky long-term bets at 0% interest rates and weren't prepared for the Fed to raise rates so quickly to combat inflation. Guess what...they're not the only one. This is Wall Street getting addicted to free money and thinking it would never end. Their risk is all interconnected too. This has been brewing since 2008. I say eff em this time. Bail nobody out and let them fail like they should. The days of privatized gains and socialized losses need to end now. https://thehill.com/homenews/sunday-talk-shows/3896422-porter-on-silicon-valley-bank-collapse-you-cant-bet-on-interest-rates-staying-low-forever/ 1 Link to comment Share on other sites More sharing options...
Unforgiven Posted March 12, 2023 Author Share Posted March 12, 2023 1 hour ago, ChiGoose said: You don’t understand. Something bad happened, so it has to be the fault of liberals somehow. more projection, how about an original thought ...all you nazis go knee jerk with trump being the epicenter of everything. it was a libtard run company in any case. lol@you 1 1 1 Link to comment Share on other sites More sharing options...
Unforgiven Posted March 12, 2023 Author Share Posted March 12, 2023 1 Link to comment Share on other sites More sharing options...
Gene Frenkle Posted March 12, 2023 Share Posted March 12, 2023 49 minutes ago, Unforgiven said: more projection, how about an original thought ...all you nazis go knee jerk with trump being the epicenter of everything. it was a libtard run company in any case. lol@you Did he not repeal the regulations that would have prevented this after SVB lobbied for it? How is that fact knee-jerk? Link to comment Share on other sites More sharing options...
BillStime Posted March 12, 2023 Share Posted March 12, 2023 Funny - the cult didn’t say a word about the 15 banks that failed under Conald Trump. 1 Link to comment Share on other sites More sharing options...
Joe Ferguson forever Posted March 12, 2023 Share Posted March 12, 2023 nice review from a stanford economist https://www.cnn.com/2023/03/11/opinions/svb-tech-industry-government-intervention-duffie/index.html Link to comment Share on other sites More sharing options...
BillStime Posted March 12, 2023 Share Posted March 12, 2023 Just now, redtail hawk said: nice review from a stanford economist https://www.cnn.com/2023/03/11/opinions/svb-tech-industry-government-intervention-duffie/index.html Don’t bother - Stanford is too DEI for the cult. Link to comment Share on other sites More sharing options...
SoCal Deek Posted March 12, 2023 Share Posted March 12, 2023 Isn’t blaming Trump for this bank failure akin to blaming Obama for the depleted national stockpile of ventilators? Shouldn’t Joe, Chuck or Namcy have fixed this already? Or is that too logical for everyone? 1 Link to comment Share on other sites More sharing options...
Joe Ferguson forever Posted March 12, 2023 Share Posted March 12, 2023 1 minute ago, BillStime said: Don’t bother - Stanford is too DEI for the cult. I've given up on edumacating them. I thought some actual smart people would like more info on the outlook for the economy from a perspective of knowledge Link to comment Share on other sites More sharing options...
SoCal Deek Posted March 12, 2023 Share Posted March 12, 2023 2 minutes ago, redtail hawk said: I've given up on edumacating them. I thought some actual smart people would like more info on the outlook for the economy from a perspective of knowledge Hey! Who you calling smart? 😉 Mostly what you’ll find on here are Hatfields and McCoys. Link to comment Share on other sites More sharing options...
Precision Posted March 12, 2023 Share Posted March 12, 2023 SVB is just the start, there will be other bank failures soon. It's all just the early inning of the looming recession. Don't tell me about the unemployment rate or jobs, they are lagging indicators. 1 Link to comment Share on other sites More sharing options...
BillStime Posted March 12, 2023 Share Posted March 12, 2023 8 minutes ago, Precision said: SVB is just the start, there will be other bank failures soon. It's all just the early inning of the looming recession. Don't tell me about the unemployment rate or jobs, they are lagging indicators. Cool story DR Link to comment Share on other sites More sharing options...
dpberr Posted March 12, 2023 Share Posted March 12, 2023 I feel .gov was just as surprised as everyone else. That's not an encouraging sign. Link to comment Share on other sites More sharing options...
ChiGoose Posted March 12, 2023 Share Posted March 12, 2023 Joint Statement by the Department of the Treasury, Federal Reserve, and FDIC “WASHINGTON, DC -- The following statement was released by Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg: Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth. After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer. We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer. Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law. Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors. The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.” 1 1 Link to comment Share on other sites More sharing options...
Joe Ferguson forever Posted March 12, 2023 Share Posted March 12, 2023 (edited) 12 minutes ago, ChiGoose said: Joint Statement by the Department of the Treasury, Federal Reserve, and FDIC “WASHINGTON, DC -- The following statement was released by Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg: Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth. After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer. We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer. Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law. Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors. The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.” Seems very decisive and very likely to stop the bleeding. And rapid. Not sure what NC finds funny? Kinda like he wanted a collapse. Guess it would make trying to start a revolution easier Edited March 12, 2023 by redtail hawk Link to comment Share on other sites More sharing options...
ChiGoose Posted March 12, 2023 Share Posted March 12, 2023 2 minutes ago, redtail hawk said: Seems very decisive and very likely to stop the bleeding. And rapid. Not sure what NC finds funny? Kinda like he wanted a collapse. Guess it would make trying to start a revolution easier I’m not sure if it will stop the bleeding, but it’s a necessary move if that’s your goal. Link to comment Share on other sites More sharing options...
BillsFanNC Posted March 12, 2023 Share Posted March 12, 2023 Link to comment Share on other sites More sharing options...
Gene Frenkle Posted March 12, 2023 Share Posted March 12, 2023 And there goes bank number 2. Who's next? Link to comment Share on other sites More sharing options...
ChiGoose Posted March 12, 2023 Share Posted March 12, 2023 Just a quick reminder that the FDIC does not receive taxpayer money. It is funded through premiums assessed on member institutions. 2 Link to comment Share on other sites More sharing options...
Gene Frenkle Posted March 13, 2023 Share Posted March 13, 2023 12 minutes ago, ChiGoose said: Just a quick reminder that the FDIC does not receive taxpayer money. It is funded through premiums assessed on member institutions. And only guarantees deposits up to $250K per account. With both SVB and Signature Bank, that covers less than 10% of all deposits. Link to comment Share on other sites More sharing options...
ChiGoose Posted March 13, 2023 Share Posted March 13, 2023 1 minute ago, Gene Frenkle said: And only guarantees deposits up to $250K per account. With both SVB and Signature Bank, that covers less than 10% of all deposits. That is correct, though their statement seems to say that they will cover all deposits for those two banks, not just covered deposits. Link to comment Share on other sites More sharing options...
Precision Posted March 13, 2023 Share Posted March 13, 2023 Not sure how I feel about the FDIC protecting all depositors. Certainly, those under $250K in assets must be insured and I have a hard time seeing viable companies having to close down because they are unable to make payroll. I'm feeling that individuals with more than $250K of assets in a single institution should be responsible for their poor choices. Moving money around in separate institutions/investments to ensure that they are in amounts that are insurable is a PITA. That is part and parcel of having/managing that much money. If individuals are unable to manage that, they need to have a financial advisor take care of it for them. Link to comment Share on other sites More sharing options...
Gene Frenkle Posted March 13, 2023 Share Posted March 13, 2023 2 minutes ago, ChiGoose said: That is correct, though their statement seems to say that they will cover all deposits for those two banks, not just covered deposits. I don't think FDIC has enough to cover it, even with its borrowing ability. Like not even close. I'm sure the taxpayers won't be stuck with the bill again. /s 3 minutes ago, Precision said: Not sure how I feel about the FDIC protecting all depositors. Certainly, those under $250K in assets must be insured and I have a hard time seeing viable companies having to close down because they are unable to make payroll. I'm feeling that individuals with more than $250K of assets in a single institution should be responsible for their poor choices. Moving money around in separate institutions/investments to ensure that they are in amounts that are insurable is a PITA. That is part and parcel of having/managing that much money. If individuals are unable to manage that, they need to have a financial advisor take care of it for them. A lot of them will be business accounts. SVB was big into financing startups. Link to comment Share on other sites More sharing options...
BillsFanNC Posted March 13, 2023 Share Posted March 13, 2023 Link to comment Share on other sites More sharing options...
Precision Posted March 13, 2023 Share Posted March 13, 2023 5 minutes ago, Gene Frenkle said: I don't think FDIC has enough to cover it, even with its borrowing ability. Like not even close. I'm sure the taxpayers won't be stuck with the bill again. /s A lot of them will be business accounts. SVB was big into financing startups. Agreed, many are businesses. I don't have a problem with insuring businesses as it would be impossible for any company to operate with assets spread across different institutions. There will be individuals though that are over the $250K threshold and I don't have as much sympathy for them. Link to comment Share on other sites More sharing options...
Gene Frenkle Posted March 13, 2023 Share Posted March 13, 2023 1 minute ago, Precision said: Agreed, many are businesses. I don't have a problem with insuring businesses as it would be impossible for any company to operate with assets spread across different institutions. There will be individuals though that are over the $250K threshold and I don't have as much sympathy for them. I mean, they weren't very smart with their money, I guess. Still, Forbes just named SVB the best bank in the country for 2023, so how does one safely navigate this mess? This is 100% on our overleveraged banking system and they deserve to fail and likely see prison time for some of it. People/companies banking with them are mostly just collateral damage. Link to comment Share on other sites More sharing options...
Joe Ferguson forever Posted March 13, 2023 Share Posted March 13, 2023 You'd think once inflation started ramping up and the fed signaled prolonged and repeated rate increases they'd have adjusted their strategy. Greedy bastards fell in love with cheap credit and screwed their customers. They should pay with their homes and boats and porsches but they won't. 1 Link to comment Share on other sites More sharing options...
Wacka Posted March 13, 2023 Share Posted March 13, 2023 Stanford was mentioned above. My opinion of Stanford University was a ruined when I worked there in the 90s. I was a post-doc here for 95-97. The graduate school isgreta but undergrad, Bleeh. It has been changed, but back then, you could fail a classed take it over and over and only the highest marks showed on your GPA. You could drop a class in the last week of the semester and it wouldn't show on your transcript. Link to comment Share on other sites More sharing options...
Joe Ferguson forever Posted March 13, 2023 Share Posted March 13, 2023 5 minutes ago, Wacka said: Stanford was mentioned above. My opinion of Stanford University was a ruined when I worked there in the 90s. I was a post-doc here for 95-97. The graduate school isgreta but undergrad, Bleeh. It has been changed, but back then, you could fail a classed take it over and over and only the highest marks showed on your GPA. You could drop a class in the last week of the semester and it wouldn't show on your transcript. In economics? Link to comment Share on other sites More sharing options...
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