SVB Bank.

[Unforgiven]

4 hours ago, B-Man said:

 

 

 

 

Everything woke turns to *****.

[ChiGoose]

41 minutes ago, Unforgiven said:

Everything woke turns to *****.

(Citation needed) 

[BillsFanNC]

Shocked?

 

Nobody.

 

 

[ChiGoose]

If anyone is interested in what actually happened with SVB, I’d recommend this episode of The Indicator.

 

The main points:

- SVB’s deposits shot up in 2020 during a boom in tech companies, which make up most of its customers.

 

- SVB put the deposits into treasury bonds which are generally safe bets. 

 
- However, SVB had three vulnerabilities:

     1. The bonds had long maturities, so they cashed out way into the future. When interest rates went up, the value of the bonds went down. More than half of SVB’s investments were in these bonds (compared to 25% average of most banks). SVB also did not hedge to balance against the risks of interest rates going up 

     2. SVB’s business was concentrated in the tech sector, which is very sensitive to interest rates. With turmoil in the tech sector, they were getting fewer new deposits to offset the risk of devaluing bonds. 

     3. SVB had a disproportionate amount of large deposits. Only 10% of its deposits were covered by FDIC’s insurance compared to an average of 50% for other banks. This drove customer panic. 

- Moody’s recently told SVB that it might downgrade its credit due to the risk of its bond value decreasing. 
 

- SVB planned to avoid a downgrade by selling its bonds at a loss and then bringing in new investors. They sold the bonds but had trouble getting new investments. 
 

- People could then see the trouble SVB was in and it’s depositors panicked and pulled $42 billion (20%) of the deposits.

So you have a bank that managed its risk poorly and collapsed due to the unique nature of its business combined with bad management. 
 

Or you can be an idiot and claim this was wokeism or whatever. 

Edited March 15, 2023 by ChiGoose
Edited for clarity. (Thanks, Orlando Tim)

[BillsFanNC]

Reality doesn't stop them from doubling down on what their masters tell them to think and say.

 

See covid.

 

See Russia hoax.

 

See J6.

 

See a man can become a woman

 

And on and on the commies march.

 

 

[ChiGoose]

Financial reporters: SVB’s collapse was due to poor risk management in the face of raising rates. 
 

The dumbest people in the world: SVB had DEI, therefore, it’s failure was due to DEI even though literally every bank does DEI and they didn’t have these problems. 
 

Correlation isn’t causation, people. 

[Orlando Tim]

1 hour ago, ChiGoose said:

Financial reporters: SVB’s collapse was due to poor risk management in the face of raising rates. 
 

The dumbest people in the world: SVB had DEI, therefore, it’s failure was due to DEI even though literally every bank does DEI and they didn’t have these problems. 
 

Correlation isn’t causation, people. 

Your last two posts seem to contradict each other some.  Long term bonds are not safe for a bank, especially unless rates are expected to fall. To state they were considered safe is incorrect, they locked in the long term rate for a short term boost. I don't care if it was DEI or lack of a risk management director, the cost for the bailout needs to be substantial for the people who made this decision. If you allow them to keep their millions while bailing them out we are not even pretending that merit matters so long as you paid the politicians.

[ChiGoose]

22 minutes ago, Orlando Tim said:

Your last two posts seem to contradict each other some.  Long term bonds are not safe for a bank, especially unless rates are expected to fall. To state they were considered safe is incorrect, they locked in the long term rate for a short term boost. I don't care if it was DEI or lack of a risk management director, the cost for the bailout needs to be substantial for the people who made this decision. If you allow them to keep their millions while bailing them out we are not even pretending that merit matters so long as you paid the politicians.

You are 100% absolutely correct. I meant to state that government bonds are generally safe but SVB’s investment strategy was not. Appreciate the catch. Not always easy to type all that out on mobile. 
 

And yeah, the DEI stuff is completely irrelevant. It has absolutely nothing to do with this but I guess there’s a lot of gullible people out there. 

[Gene Frenkle]

3 hours ago, ChiGoose said:

If anyone is interested in what actually happened with SVB, I’d recommend this episode of The Indicator.

 

The main points:

- SVB’s deposits shot up in 2020 during a boom in tech companies, which make up most of its customers.

 

- SVB put the deposits into treasury bonds which are generally safe bets. 

 
- However, SVB had three vulnerabilities:

     1. The bonds had long maturities, so they cashed out way into the future. When interest rates went up, the value of the bonds went down. More than half of SVB’s investments were in these bonds (compared to 25% average of most banks). SVB also did not hedge to balance against the risks of interest rates going up 

     2. SVB’s business was concentrated in the tech sector, which is very sensitive to interest rates. With turmoil in the tech sector, they were getting fewer new deposits to offset the risk of devaluing bonds. 

     3. SVB had a disproportionate amount of large deposits. Only 10% of its deposits were covered by FDIC’s insurance compared to an average of 50% for other banks. This drove customer panic. 

- Moody’s recently told SVB that it might downgrade its credit due to the risk of its bond value decreasing. 
 

- SVB planned to avoid a downgrade by selling its bonds at a loss and then bringing in new investors. They sold the bonds but had trouble getting new investments. 
 

- People could then see the trouble SVB was in and it’s depositors panicked and pulled $42 billion (20%) of the deposits.

So you have a bank that managed its risk poorly and collapsed due to the unique nature of its business combined with bad management. 
 

Or you can be an idiot and claim this was wokeism or whatever. 

 

This is an excellent summary.

[Buffarukus]

6 hours ago, ChiGoose said:

If anyone is interested in what actually happened with SVB, I’d recommend this episode of The Indicator.

 

The main points:

- SVB’s deposits shot up in 2020 during a boom in tech companies, which make up most of its customers.

 

i wouldnt discount the ppp giveaways as excess money deposited. 

6 hours ago, ChiGoose said:

- SVB put the deposits into treasury bonds which are generally safe bets. 

 

dont leave out the gov was asking for large investments in bonds to take out liquity and help tamp inflation.

 

6 hours ago, ChiGoose said:

 

- However, SVB had three vulnerabilities:

     1. The bonds had long maturities, so they cashed out way into the future. When interest rates went up, the value of the bonds went down. More than half of SVB’s investments were in these bonds (compared to 25% average of most banks). SVB also did not hedge to balance against the risks of interest rates going up 

 

you talk about long maturities but i think it was very simple to predict rate hikes as the fed had very little tools left with 0% interest for so long and inflation going out of control. SELL. they were fools.

6 hours ago, ChiGoose said:

     2. SVB’s business was concentrated in the tech sector, which is very sensitive to interest rates. With turmoil in the tech sector, they were getting fewer new deposits to offset the risk of devaluing bonds. 

 

cant predict their own major sector? this looks more as if we can be risky because our failure is not a risk. poppa gov will pick up the tab from working slobs.

6 hours ago, ChiGoose said:

     3. SVB had a disproportionate amount of large deposits. Only 10% of its deposits were covered by FDIC’s insurance compared to an average of 50% for other banks. This drove customer panic. 

 

read above.

6 hours ago, ChiGoose said:

- Moody’s recently told SVB that it might downgrade its credit due to the risk of its bond value decreasing. 
 

- SVB planned to avoid a downgrade by selling its bonds at a loss and then bringing in new investors. They sold the bonds but had trouble getting new investments. 
 

- People could then see the trouble SVB was in and it’s depositors panicked and pulled $42 billion (20%) of the deposits.

So you have a bank that managed its risk poorly and collapsed due to the unique nature of its business combined with bad management. 
 

Or you can be an idiot and claim this was wokeism or whatever. 

 

 

so overall this was caused by inflation and its reaction by the fed. what caused this situation? point blank at first BOTH but overall dems ridiculous covid crap.

 

banks playing risky knowing the gov will swing in while spitting in the face of customers. hiring higher up from the last bank issue. handing golden parachutes to there guys as the building implodes and gently landing in the lap of the fed who will pay their bills for them. same as usual.

 

what should be pointed out with the wokeness is how the bank got top notch esg rating. how freely they gave to woke issues tens of millions and how at the end of the day all of that equated to the same old bank slime that happily took their cut and didnt give a crap about real people...the ones who invested and the taxpayers that will ultimately pay for their poor managment that made off with millions. just a reminder what all this caring and equity these corporation really think. 

 

but they should pay their fair share!! 😅😅😅😅 funny. hey banks roll them dice baby. risk is no object. we got your back and everyone making the decisions can take there bag on the way out. 

 

maybe this sort of thing will make you understand...whether hes a liar or not...why some are attracted to someone says this system is crooked and we need to drain the swamp, while dems run to a lifelong career politician that built the house of cards. 

 

Edited March 15, 2023 by Buffarukus

[ChiGoose]

54 minutes ago, Buffarukus said:

 

i wouldnt discount the ppp giveaways as excess money deposited. 

 

dont leave out the gov was asking for large investments in bonds to take out liquity and help tamp inflation.

 

 

you talk about long maturities but i think it was very simple to predict rate hikes as the fed had very little tools left with 0% interest for so long and inflation going out of control. SELL. they were fools.

 

cant predict their own major sector? this looks more as if we can be risky because our failure is not a risk. poppa gov will pick up the tab from working slobs.

 

read above.

 

 

so overall this was caused by inflation and its reaction by the fed. what caused this situation? point blank at first BOTH but overall dems ridiculous covid crap.

 

banks playing risky knowing the gov will swing in while spitting in the face of customers. hiring higher up from the last bank issue. handing golden parachutes to there guys as the building implodes and gently landing in the lap of the fed who will pay their bills for them. same as usual.

 

what should be pointed out with the wokeness is how the bank got top notch esg rating. how freely they gave to woke issues tens of millions and how at the end of the day all of that equated to the same old bank slime that happily took their cut and didnt give a crap about real people...the ones who invested and the taxpayers that will ultimately pay for their poor managment that made off with millions. just a reminder what all this caring and equity these corporation really think. 

 

but they should pay their fair share!! 😅😅😅😅 funny. hey banks roll them dice baby. risk is no object. we got your back and everyone making the decisions can take there bag on the way out. 

 

maybe this sort of thing will make you understand...whether hes a liar or not...why some are attracted to someone says this system is crooked and we need to drain the swamp, while dems run to a lifelong career politician that built the house of cards. 

You were so close! So close to getting it and being right! But then you couldn’t help yourself but to veer off a cliff into being wrong. I can’t blame you, seems most of PPP is doing the same thing.

 

Inflation played a part in this only because the risk management at SVP somehow could not see the obvious: the Fed would continue raising rates through the end of 2022 and into 2023. This was staggeringly obvious to everyone except (apparently) the risk managers at SVB. 
 

Basically every other bank is managing their risk portfolio to account for the inflation and the expected rate increases. If this was solely and only inflation’s fault, all of them would be failing too. But they’re not because this isn’t a story of inflation wrecking the banking industry, or wokeness, or ESG. It’s a story of a poorly run bank that was uniquely situated to fail.

 

Banks with good risk management didn’t have this problems. DEI or not. ESG or not. The large bank I used to work for that has a ton of DEI stuff is doing great. Because this has nothing to do with that. 
 

If your theory was correct, that this was because of inflation, it would already be systemic and far more than two banks would have failed already. Isolate your variables before going off on a limb so you don’t come out looking like a fool. 

 

But hey, if you really want to be wrong, I guess I can’t stop you. 

[Buffarukus]

26 minutes ago, ChiGoose said:

You were so close! So close to getting it and being right! But then you couldn’t help yourself but to veer off a cliff into being wrong. I can’t blame you, seems most of PPP is doing the same thing.

 

Inflation played a part in this only because the risk management at SVP somehow could not see the obvious: the Fed would continue raising rates through the end of 2022 and into 2023. This was staggeringly obvious to everyone except (apparently) the risk managers at SVB. 
 

Basically every other bank is managing their risk portfolio to account for the inflation and the expected rate increases. If this was solely and only inflation’s fault, all of them would be failing too. But they’re not because this isn’t a story of inflation wrecking the banking industry, or wokeness, or ESG. It’s a story of a poorly run bank that was uniquely situated to fail.

 

Banks with good risk management didn’t have this problems. DEI or not. ESG or not. The large bank I used to work for that has a ton of DEI stuff is doing great. Because this has nothing to do with that. 
 

If your theory was correct, that this was because of inflation, it would already be systemic and far more than two banks would have failed already. Isolate your variables before going off on a limb so you don’t come out looking like a fool. 

 

But hey, if you really want to be wrong, I guess I can’t stop you. 

 

was i so close? interest hikes wasn't due to covid? covid reaction of shutting down the economy didn't dramatically effect inflation? handing out tons of money with everyone sitting at home not making the things they want is a crazy conspiracy of why inflation and all that followed happened or you arent looking at the run on the banks and how stopping trading the last 2 days and gov intervention is effecting this veeeeery isolated incident of one bank making some whoopsies. you like hand waving those. lets let the ONE bank fail..opps i mean two..whats that three? anyways. and trade as normal and see where we land. off a cliff as you put it and we all fall with this SH/÷$how.

 

lets see just a bit over halfway done. covid lies to keep people locked down for YEARS. ITS STILL NOT OVER TO THEM. its ok. afganistan disaster. its ok. crushing inflation. its ok. crime rampant with no change in rhetoric or action to reverse coarse. its ok. boarder crisis. its ok. no peace talks for poss nuclear war. its ok. banking/economic collapse. its ok. rare direct questions answered by reporters walking out on them regularly. its ok. non stop climate agenda until a climate disaster destroys a us town. its ok. gov colluding with the biggest public square for citizens voices. its ok.

 

hows that for a cliff? cause you been on here excusing alot of it and this is just another example of the goose swooping into the swamp to tell everyone. its ok. not my prez. any point its not ok? any comparable examples to the evil regime before this besides the dredded jan 6 that killed noone..but scared the crap out of all the people WHO ARE BENEFITTING off these things that are crushing us?

 

Edited March 15, 2023 by Buffarukus

[ChiGoose]

14 minutes ago, Buffarukus said:

 

was i so close? interest hikes wasn't due to covid? covid reaction of shutting down the economy didn't dramatically effect inflation? handing out tons of money with everyone sitting at home not making the things they want is a crazy conspiracy of why inflation and all that followed happened or you arent looking at the run on the banks and how stopping trading the last 2 days and gov intervention is effecting this veeeeery isolated incident of one bank making some whoopsies. you like hand waving those. lets let the ONE bank fail..opps i mean two..whats that three? anyways. and trade as normal and see where we land. off a cliff as you put it and we all fall with this SH/÷$how.

 

lets see just a bit over halfway done. covid lies to keep people locked down for YEARS. ITS STILL NOT OVER TO THEM. its ok. afganistan disaster. its ok. crushing inflation. its ok. crime rampant with no change in rhetoric or action to reverse coarse. its ok. boarder crisis. its ok. no peace talks for poss nuclear war. its ok. banking/economic collapse. its ok. rare direct questions answered by reporters walking out on them regularly. its ok. non stop climate agenda until a climate disaster destroys a us town. its ok. gov colluding with the biggest public square for citizens voices. its ok.

 

hows that for a cliff? cause you been on here excusing alot of it and this is just another example of the goose swooping into the swamp to tell everyone. its ok. not my prez. any point its not ok?

 

If you have a coherent thought or question, I’d be happy to address it. But it seems like you just want to ramble about anything and everything and try to connect dots that aren’t there. 
 

SVB failed because they had unbelievably incompetent risk managers. Signature Bank failed because they were heavily invested in the the Ponzi scheme that is crypto. 

 

If your theory was correct, we’d already have dozens and dozens of bank failures. But you’re wrong, so we haven’t. 
 

Inflation is a problem and it was exacerbated by the easy money policies of the current and previous administrations as a response to COVID. They would argue it was a necessary risk to prevent a broader collapse, but your mileage may vary. That does not excuse the poor strategies of the two failed banks. 

Edited March 15, 2023 by ChiGoose

[Buffarukus]

8 minutes ago, ChiGoose said:

If you have a coherent thought or question, I’d be happy to address it. But it seems like you just want to ramble about anything and everything and try to connect dots that aren’t there. 
 

SVB failed because they had unbelievably incompetent risk managers. Signature Bank failed because they were heavily invested in the the Ponzi scheme that is crypto. 

 

If your theory was correct, we’d already have downs and dozens of bank failures. But you’re wrong, so we haven’t. 
 

Inflation is a problem and it was exacerbated by the easy money policies of the current and previous administrations as a response to COVID. They would argue it was a necessary risk to prevent a broader collapse, but your mileage may vary. That does not excuse the poor strategies of the two failed banks. 

 

 my coherent questions was edited at the end. i accept trump fell for the covid shtick at first but wanted to change strategies. he helped cause inflation as well but no where close. you talk about it as if it has no major factors. its just somthing that happens. you can do that and then just tell the tale of the bank that made bad investment and cut out the story where it all came to be to begin with but i see the whole picture. you avoid it all cause it would go against..your faith. like i said the banks are being artificially propped up..that ends your this was isolated..why isnt this effecting more. as for the rest its just ramblings.. to a biased person unwilling to look at just how far we fallen from where we were because thats blasphemy. so you stay insulated from that mirror so youll never be wrong. me and everyone else looking at this country will continue to "ramble" amongst ourselves.

Edited March 15, 2023 by Buffarukus

[ChiGoose]

1 minute ago, Buffarukus said:

 

lol. my coherent questions was edited at the end. i accept trump fell for the covid shtick at first but wanted to change strategies. he helped cause inflation as well but no where close. you talk about it as if it has no major factors. its just somthing that happens lol. you can do that and then just tell the tale of the bank that made bad investment and cut out the story where it all came to be to begin with but i see the whole picture. you avoid it all cause it would go against..your faith. like i said the banks are being artificially propped up..that ends your this was isolated..why isnt this effecting more. as for the rest its just ramblings.. to a biased person unwilling to look at just how far we fallen from where we were because thats blasphemy. so you stay insulated from that mirror so youll never be wrong. me and everyone else looking at this country will continue to "ramble" amongst ourselves.

Making a lot of assumptions there, buddy. Maybe take a beat and go touch some grass. Or read what I actually wrote instead of what you seem to wish I wrote. 

[Buffarukus]

5 minutes ago, ChiGoose said:

Making a lot of assumptions there, buddy. Maybe take a beat and go touch some grass. Or read what I actually wrote instead of what you seem to wish I wrote. 

 

assumptions? they pushed money in due to  "risk of a broader collapse"..from what exactly? lol. ok im going to go touch this grass and stare at the clouds. seems maybe you should do less of that and look into who was lying and why. you may then better understand THE BEGINNING of why we are watching...oh were up to two banks now? hmm..collapsed by some stuff that couldnt be helped as "gov is big with alot of moving parts makes mistakes". that was a quote from a previous convo on the covid lies. it may be a enlightening but will require reading alot of ramblings from folks you may not agree with and feel superior to. 

[ChiGoose]

25 minutes ago, Buffarukus said:

 

assumptions? they pushed money in due to  "risk of a broader collapse"..from what exactly? lol. ok im going to go touch this grass and stare at the clouds. seems maybe you should do less of that and look into who was lying and why. you may then better understand THE BEGINNING of why we are watching...oh were up to two banks now? hmm..collapsed by some stuff that couldnt be helped as "gov is big with alot of moving parts makes mistakes". that was a quote from a previous convo on the covid lies. it may be a enlightening but will require reading alot of ramblings from folks you may not agree with and feel superior to. 

COVID and the response to COVID changed the risk environment and increased inflation. Most financial institutions adjusted their risk portfolios to reflect this. SVB did not. 
 

You can go off on whatever rambling non-sequitur you want, but it’s just going to make you look foolish. 

[Joe Ferguson forever]

4 hours ago, ChiGoose said:

If you have a coherent thought or question, I’d be happy to address it. But it seems like you just want to ramble about anything and everything and try to connect dots that aren’t there. 
 

SVB failed because they had unbelievably incompetent risk managers. Signature Bank failed because they were heavily invested in the the Ponzi scheme that is crypto. 

 

If your theory was correct, we’d already have dozens and dozens of bank failures. But you’re wrong, so we haven’t. 
 

Inflation is a problem and it was exacerbated by the easy money policies of the current and previous administrations as a response to COVID. They would argue it was a necessary risk to prevent a broader collapse, but your mileage may vary. That does not excuse the poor strategies of the two failed banks. 

This, nicely summarized..  But the MAGQ's have no appetite for anything that interferes with their straight line and deeply flawed thinking.  The site is a microcosm of America.  Except in the real world their are less MAGA's...but I hear that trump has some nice NFT's for sale.  If it weren't for the fact that millions of $'s of these have been sold, I'd assume it was feigned ignorance.  I guess they [put their money where their mouth is.

[Irv]

Another disaster caused by Demented Biden or whoever is running the Executive Branch.  What a mess.  

[BillsFanNC]

It's always makes me wonder...

 

Was @ChiGoose a constant reflexive excuse machine for the GOP when he/she/they was/were a Republican?

[leh-nerd skin-erd]

10 hours ago, ChiGoose said:

Financial reporters: SVB’s collapse was due to poor risk management in the face of raising rates. 
 

The dumbest people in the world: SVB had DEI, therefore, it’s failure was due to DEI even though literally every bank does DEI and they didn’t have these problems. 
 

Correlation isn’t causation, people. 

The recap you mentioned above makes sense to me at face value.  I think a full forensic accounting of the demise of SVB is in order, and we’re at day 5, day 3 in banker hours.  
 

I do think the dumbest people in the world mantle probably rests more with the people who f’d up playing with $151 billion in depositor money more so than with people critical of the decision making.  You ladder that $151b in 4 or 5 CDs at your local credit union and boom, you’re done. 

[BillsFanNC]

The dumbest people in the world:

 

J6 can't have a handful of extremists who were violent and destroyed property at the same time as having the vast majority that day being peaceful trespassers or peaceful sightseers who were let in by law enforcement. 

 

SVB can't be a bank that supported woke causes at the same time as having its collapse caused by non existent risk management during rising interest rates.

[SoCal Deek]

Not sure why this is a shock to anyone. A bank is a business. This one was very poorly run and when the music stopped they were left without a chair. The question is whether there are or should be safeguards in place to keep this from happening. THAT is the real debate. 

[All_Pro_Bills]

1 hour ago, leh-nerd skin-erd said:

The recap you mentioned above makes sense to me at face value.  I think a full forensic accounting of the demise of SVB is in order, and we’re at day 5, day 3 in banker hours.  
 

I do think the dumbest people in the world mantle probably rests more with the people who f’d up playing with $151 billion in depositor money more so than with people critical of the decision making.  You ladder that $151b in 4 or 5 CDs at your local credit union and boom, you’re done. 

I believe the ultimate problem is the financial system in its current form is addicted to low to zero interest rates.  All kinds of cheap loans for things like homes, business investment, cars, and other items.  And when money is "free" lots of investments and projects that are economical at zero are not economical or justified at 5%.  When rates go up, asset prices dependent on credit financing go down.  This is a problem brought about by politics invading the world of economics and finance but it is by no means a liberal or conservative, left or right induced situation.  Its been a series of decisions by Treasury department officials and Federal Reserve officials.  Something most people fail to realize is the Fed is not a government agency.  One check of their website provides a clue, its a .org.  The Fed exists to serve the needs of its member banks.  For that it has done well enriching the financial class at the expense of almost everyone else.  The fact President Biden's Treasury head is Janet Yellen, a former Fed chairman is a clue to how this system functions.  Its a deal with the Devil where the government gets a system rigged to provide it with lots of cheap financing in exchange for surrendering control of the value of the money it sponsors.       

 

Like an addict that has their fix taken away there are going to be withdrawal symptoms, failures, defaults, bankruptcies, and painful adjustments for higher rates.  I think we're at the beginning of that process.  My expectation was the Fed will keep raising rates until they break something.  Well, something broke.  I've been slowly accumulating investments in hard assets like gold, oil, other natural resources that have tangible value and dumping high multiple stocks and investments that I'd label as discretionary.  Tech stuff mostly.  I recite one of Warren Buffet's famous quotes for this time which is "when the tide goes out we get to see who's swimming naked".  I think that's what we're going to find out soon enough in the markets. 

[SoCal Deek]

17 minutes ago, All_Pro_Bills said:

I believe the ultimate problem is the financial system in its current form is addicted to low to zero interest rates.  All kinds of cheap loans for things like homes, business investment, cars, and other items.  And when money is "free" lots of investments and projects that are economical at zero are not economical or justified at 5%.  When rates go up, asset prices dependent on credit financing go down.  This is a problem brought about by politics invading the world of economics and finance but it is by no means a liberal or conservative, left or right induced situation.  Its been a series of decisions by Treasury department officials and Federal Reserve officials.  Something most people fail to realize is the Fed is not a government agency.  One check of their website provides a clue, its a .org.  The Fed exists to serve the needs of its member banks.  For that it has done well enriching the financial class at the expense of almost everyone else.  The fact President Biden's Treasury head is Janet Yellen, a former Fed chairman is a clue to how this system functions.  Its a deal with the Devil where the government gets a system rigged to provide it with lots of cheap financing in exchange for surrendering control of the value of the money it sponsors.       

 

Like an addict that has their fix taken away there are going to be withdrawal symptoms, failures, defaults, bankruptcies, and painful adjustments for higher rates.  I think we're at the beginning of that process.  My expectation was the Fed will keep raising rates until they break something.  Well, something broke.  I've been slowly accumulating investments in hard assets like gold, oil, other natural resources that have tangible value and dumping high multiple stocks and investments that I'd label as discretionary.  Tech stuff mostly.  I recite one of Warren Buffet's famous quotes for this time which is "when the tide goes out we get to see who's swimming naked".  I think that's what we're going to find out soon enough in the markets. 

Love the Buffet quote. Hilarious…and true. I take slight exception to the ‘addicted’ take. Most in this sector have never known anything but low interest rates. The real problem here is that people who claimed to be running this bank were supposed to know what to do when and if those rates increase. 

[Tommy Callahan]

53 minutes ago, SoCal Deek said:

Not sure why this is a shock to anyone. A bank is a business. This one was very poorly run and when the music stopped they were left without a chair. The question is whether there are or should be safeguards in place to keep this from happening. THAT is the real debate. 

like another glass-Steagle?  outlawing banks from investing in stocks?  cause that one separation could help. 

 

 

 

the leach-biley is often used as the reason for the 08 meltdown.  and led to the Dodd Frank bill. that didnt do anything about separating separated investment banking from retail banking.  eff, it was written by the industry, for the industry.  if anything, we have more bubbles now.

 

I got no faith in DC actually fixing this issue.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Edited March 15, 2023 by Chris farley

[leh-nerd skin-erd]

47 minutes ago, All_Pro_Bills said:

I believe the ultimate problem is the financial system in its current form is addicted to low to zero interest rates.  All kinds of cheap loans for things like homes, business investment, cars, and other items.  And when money is "free" lots of investments and projects that are economical at zero are not economical or justified at 5%.  When rates go up, asset prices dependent on credit financing go down.  This is a problem brought about by politics invading the world of economics and finance but it is by no means a liberal or conservative, left or right induced situation.  Its been a series of decisions by Treasury department officials and Federal Reserve officials.  Something most people fail to realize is the Fed is not a government agency.  One check of their website provides a clue, its a .org.  The Fed exists to serve the needs of its member banks.  For that it has done well enriching the financial class at the expense of almost everyone else.  The fact President Biden's Treasury head is Janet Yellen, a former Fed chairman is a clue to how this system functions.  Its a deal with the Devil where the government gets a system rigged to provide it with lots of cheap financing in exchange for surrendering control of the value of the money it sponsors.       

 

Like an addict that has their fix taken away there are going to be withdrawal symptoms, failures, defaults, bankruptcies, and painful adjustments for higher rates.  I think we're at the beginning of that process.  My expectation was the Fed will keep raising rates until they break something.  Well, something broke.  I've been slowly accumulating investments in hard assets like gold, oil, other natural resources that have tangible value and dumping high multiple stocks and investments that I'd label as discretionary.  Tech stuff mostly.  I recite one of Warren Buffet's famous quotes for this time which is "when the tide goes out we get to see who's swimming naked".  I think that's what we're going to find out soon enough in the markets. 

 No need for the Buffet dirty talk but the rest makes sense.  

9 minutes ago, Chris farley said:

like another glass-Steagle?  outlawing banks from investing in stocks?  cause that one separation could help. 

 

 

 

the leach-biley is often used as the reason for the 08 meltdown.  and led to the Dodd Frank bill. that didnt do anything about separating separated investment banking from retail banking.  eff, it was written by the industry, for the industry.  if anything, we have more bubbles now.

 

I got no faith in DC actually fixing this issue.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I think if we start with the assumption that the plan is to fix anything, we might be giving Washington too much credit.  Seems again and again the big dogs get paid before the lights shut off, and political campaigns/recipients long before that.  

[SoCal Deek]

1 hour ago, Chris farley said:

like another glass-Steagle?  outlawing banks from investing in stocks?  cause that one separation could help. 

 

 

 

the leach-biley is often used as the reason for the 08 meltdown.  and led to the Dodd Frank bill. that didnt do anything about separating separated investment banking from retail banking.  eff, it was written by the industry, for the industry.  if anything, we have more bubbles now.

 

I got no faith in DC actually fixing this issue.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note that I never said the government will fix it. The poignant debate is about whether they should have in this case, or should have a role in the future. 

[B-Man]

 

 

 

A TRILLION HERE AND A TRILLION THERE…: 

 

Silicon Valley Bank and Joe Biden’s $19 Trillion Monday.

By Holman W. Jenkins, Jr.

 

One bird has flown, and that’s moral hazard, or the idea that bailouts only encourage the behavior that makes bailouts necessary. Don’t buy the claim that bank shareholders and CEOs are being taught a lesson. By guaranteeing all deposits, government actually makes banks an even more attractive source of funding for swing-for-the-fences bets by politically adroit, high-rolling bank entrepreneurs and executives.

 

This problem regulation will then try to solve by dictating which bets banks can make with customer deposits. Somehow the necessary clairvoyance is never found and bank failures keep happening. In a weekend, dispensed with has been a guardrail that served the economy well. As the title of a 1986 paper by the Chicago Federal Reserve Bank succinctly put it: “Uninsured deposits [are] a source of market discipline.”

 

 

https://www.wsj.com/articles/joe-bidens-19-trillion-monday-svb-bailout-deposit-guarantee-fdic-fed-student-loan-too-big-to-fail-7e2de130

 

 

 

Market discipline provides too few opportunities for corruption and grift.

[Irv]

1 hour ago, B-Man said:

 

 

 

A TRILLION HERE AND A TRILLION THERE…: 

 

Silicon Valley Bank and Joe Biden’s $19 Trillion Monday.

By Holman W. Jenkins, Jr.

 

One bird has flown, and that’s moral hazard, or the idea that bailouts only encourage the behavior that makes bailouts necessary. Don’t buy the claim that bank shareholders and CEOs are being taught a lesson. By guaranteeing all deposits, government actually makes banks an even more attractive source of funding for swing-for-the-fences bets by politically adroit, high-rolling bank entrepreneurs and executives.

 

This problem regulation will then try to solve by dictating which bets banks can make with customer deposits. Somehow the necessary clairvoyance is never found and bank failures keep happening. In a weekend, dispensed with has been a guardrail that served the economy well. As the title of a 1986 paper by the Chicago Federal Reserve Bank succinctly put it: “Uninsured deposits [are] a source of market discipline.”

 

 

https://www.wsj.com/articles/joe-bidens-19-trillion-monday-svb-bailout-deposit-guarantee-fdic-fed-student-loan-too-big-to-fail-7e2de130

 

 

 

Market discipline provides too few opportunities for corruption and grift.

 

Demented Biden says that no taxpayer money will be spent on the bailouts?  Who's paying then?  The Easter Bunny?  What a mess.  

 

    

Edited March 15, 2023 by Irv

[All_Pro_Bills]

Anybody watching Credit Suisse?  As it looks like they're about to go under. 

 

Also, "Auditing giant KPMG is standing by its audits of Silicon Valley Bank (SVB) and Signature Bank, which collapsed when customers rushed to withdraw their savings in panic-fueled bank runs.  The two banks failed not long after their respective annual reports were certified by KPMG,"

 

More experts looking stupid or merely high paid experts at "rubber stamping" financial books. 

Edited March 15, 2023 by All_Pro_Bills

[Tommy Callahan]

2 hours ago, SoCal Deek said:

Note that I never said the government will fix it. The poignant debate is about whether they should have in this case, or should have a role in the future. 

at this point it seems the Fixes, make the problems worse long run. 

 

probably has something to do with the fact they are just openly bought with insane money that comes mostly from one class. and in turn make sure that class is always protected.

 

doesn't seem to work out so well for the rest of us, just going by the last few times they claimed to be fixing this problem.

 

None of them would support separating investments from traditional banks. as that would blow up the current stock market bubble, and then..

 

 

 

 

 

 

 

 

 

 

Edited March 15, 2023 by Chris farley

[B-Man]

 

 

Can you say corrupt?

 

Socialism at it's finest.

 

 

 

[ALF]

3 hours ago, Irv said:

 

Demented Biden says that no taxpayer money will be spent on the bailouts?  Who's paying then?  The Easter Bunny?  What a mess.  

 

    

 

The other banks via FDIC

[Joe Ferguson forever]

8 hours ago, All_Pro_Bills said:

I recite one of Warren Buffet's famous quotes for this time which is "when the tide goes out we get to see who's swimming naked".  I think that's what we're going to find out soon enough in the markets. 

I like this one even better (when taken figuratively)

"Buy when there's blood in the streets, even if the blood is your own."

[ChiGoose]

4 hours ago, Irv said:

 

Demented Biden says that no taxpayer money will be spent on the bailouts?  Who's paying then?  The Easter Bunny?  What a mess.  

 

    

The FDIC will sell the assets of the banks and use that to cover the depositors. 
 

If the sale does not cover the costs, the FDIC has a fund that all the partner banks pay into, which can be used to make depositors whole. 
 

If all of that fails to cover the costs (which doesn’t seem to be the case if the damage can be limited to the two banks), the FDIC has a $100 billion line of credit with the treasury. If it uses that, then taxpayers actually probably make money on the deal. 
 

Failing all of that, you would likely need an act of Congress to tap taxpayer funds.

[SoCal Deek]

4 hours ago, Chris farley said:

at this point it seems the Fixes, make the problems worse long run. 

 

probably has something to do with the fact they are just openly bought with insane money that comes mostly from one class. and in turn make sure that class is always protected.

 

doesn't seem to work out so well for the rest of us, just going by the last few times they claimed to be fixing this problem.

 

None of them would support separating investments from traditional banks. as that would blow up the current stock market bubble, and then..

 

 

 

 

 

 

 

 

 

 

Is that the same administration that just proposed forgiving debts from millions of students? Are they also on that list? I submit the more overarching theme here is that nobody, regardless of class or influence, is ever held accountable for their poor financial decisions or risks. 

[Joe Ferguson forever]

From CNN biz

Lloyd Blankfein:

“Banks publish the unrealized losses that are embedded in their portfolios,” he said. “It was there to be seen… It wasn’t seen to be that dangerous given that the bank didn’t have to sell any of those securities. But they certainly did once withdrawals started to be made. And so, in hindsight, it will have appeared to have been in plain sight, and the signals will have been missed. But it became critical only when deposits were withdrawn and the banks needed to sell those out-of the-money securities in order to raise funds.” 

When Burnett asked again if the bank collapsed because it was focused on placing a black person or a gay person on its board, Blankfein responded: 

“I’m not an expert in mass psychology, but I think that’s very unlikely and I think frankly it’s a bit laughable.” 

[SoCal Deek]

1 minute ago, redtail hawk said:

From CNN biz

Lloyd Blankfein:

“Banks publish the unrealized losses that are embedded in their portfolios,” he said. “It was there to be seen… It wasn’t seen to be that dangerous given that the bank didn’t have to sell any of those securities. But they certainly did once withdrawals started to be made. And so, in hindsight, it will have appeared to have been in plain sight, and the signals will have been missed. But it became critical only when deposits were withdrawn and the banks needed to sell those out-of the-money securities in order to raise funds.” 

When Burnett asked again if the bank collapsed because it was focused on placing a black person or a gay person on its board, Blankfein responded: 

“I’m not an expert in mass psychology, but I think that’s very unlikely and I think frankly it’s a bit laughable.” 

Good ‘ol CNN. Now there’s a reliable source! 

[Joe Ferguson forever]

1 hour ago, SoCal Deek said:

Good ‘ol CNN. Now there’s a reliable source! 

Blankfein was CEO of Goldman sachs

Edited March 16, 2023 by redtail hawk