SVB Bank.

[Joe Ferguson forever]

15 hours ago, ChiGoose said:

We’re generally good at the first part and bad at the second part. So we get (as you aptly described) privatized profits and socialized losses. 

sounds eerily similar to the American healthcare industry.

[All_Pro_Bills]

21 minutes ago, redtail hawk said:

https://www.wsj.com/articles/inflation-report-arrives-as-fed-confronts-bank-failures-5f0e10ae

this is the quandary.  Consumer spending is still too high to slow inflation enough.  Make credit more expensive and it goes down.  Seems like holding rate increases for a few months and stopping deferred payment from consumers to credit companies in that time while card rates increase might be a good strategy.  on the bright side, stock futures are up again this am.

How about slowing Federal government spending?  They borrow a lot of money too.  

[Joe Ferguson forever]

4 minutes ago, All_Pro_Bills said:

How about slowing Federal government spending?  They borrow a lot of money too.  

Yes, what percentage is discretionary tho?  Cutting safety net programs in a time of high inflation might result in civil unrest.  Can't remember the economist that proposed it but some believe it's cheaper for the gov't to give away money than to pay for the consequences of unrest on the economy. I don't know but it wouldn't be pleasant - it's happened before.  French revolution comes to mind.  Cutting spending is however a needed part tho, imo.

[Tommy Callahan]

17 hours ago, ChiGoose said:

We don’t know yet. 
 

This is the start of a classic bank run panic. Depositors are concerned that their money won’t be available anymore so they are trying to withdraw it. It’s basically that famous scene from It’s A Wonderful Life. 
 

Even smaller banks who don’t have underlying issues would be at risk if their customers wrongly believe there’s an issue and begin to withdraw all of their funds. 
 

The FDIC and Treasury stepping in to guarantee all depositors at SVB and Signature Bank is meant to send a message to consumers that their money is safe no matter which bank it’s in. 
 

The question is whether or not the public will believe this. The FDIC can cover the deposits for these banks with its own funds. If people stop withdrawing funds from their banks, we’ll probably be ok after a short but bumpy ride. 
 

If people continue to withdraw their funds, it’ll put additional banks at risk to the point that we would need Congress to step in to provide a bigger backstop and fight the panic. 
 

There’s a broader conversation to have about ways to prevent this and potential punishment for the risk managers at SVB, but ensuring depositor confidence is the #1 thing you have to do if you want to have a chance at preventing a broader collapse. 
 

Thankfully, the government is not backstopping investors or management for these banks. Just depositors. 

if its that simple, if nothing is changed. rates will rise and the pressure on the banks will continue and then....

 

that's sociology what about that firm interest rate narrative that caused the bank to fail, that you stated was the only reason it failed?

 

 

 

 

[All_Pro_Bills]

14 minutes ago, redtail hawk said:

Yes, what percentage is discretionary tho?  Cutting safety net programs in a time of high inflation might result in civil unrest.  Can't remember the economist that proposed it but some believe it's cheaper for the gov't to give away money than to pay for the consequences of unrest on the economy. I don't know but it wouldn't be pleasant - it's happened before.  French revolution comes to mind.  Cutting spending is however a needed part tho, imo.

I'd simply argue the trajectory of the financial system, including government spending and consumer spending for that matter, is unsustainable and either you make conscious decisions to rein in spending and debt or you'll be forced by circumstances to do it later under less pleasant conditions.  

[Tommy Callahan]

30 minutes ago, redtail hawk said:

Yes, what percentage is discretionary tho?  Cutting safety net programs in a time of high inflation might result in civil unrest.  Can't remember the economist that proposed it but some believe it's cheaper for the gov't to give away money than to pay for the consequences of unrest on the economy. I don't know but it wouldn't be pleasant - it's happened before.  French revolution comes to mind.  Cutting spending is however a needed part tho, imo.

Welp.  We saw in the summer of rage.  government gave out money, people still burned the country. but inflation wasnt a thing then.

 

like going full circle

 

[Wacka]

PPP hippos  show up spraying feces.

[BillStime]

10 hours ago, Big Blitz said:

 

Man made Covid hysteria led to it - government (which totally cares about you) caused that.   
 

This took about 1 year after masks came off.  Can’t wait to see what’s next.  

But only white people are successful - white men that is - right?
 

I mean - your cult leader bankrupted how many of his businesses? 
 

F’n idiots 

 

 

[nedboy7]

I hope wokeness doesn’t make it snow today. 

[SoCal Deek]

21 minutes ago, nedboy7 said:

I hope wokeness doesn’t make it snow today. 

Nah…but we are expecting more rain out here on the west coast. Thanks for asking. 

[B-Man]

 

 

ANDY KESSLER: Who Killed Silicon Valley Bank?

 

Was there regulatory failure? Perhaps. SVB was regulated like a bank but looked more like a money-market fund.

 

Management screwed up interest rates, underestimated customer withdrawals, hired the wrong people, and failed to sell equity. You’re really only allowed one mistake; more proved fatal.

 

Was management hubristic, delusional or incompetent? Sometimes there’s no difference.

 

https://www.wsj.com/articles/who-killed-silicon-valley-bank-interest-rates-treasury-federal-reserve-ipo-loan-long-term-bond-capital-securities-startup-jpmorgan-bear-stearns-lehman-brothers-b9ca2347

 

 

Get woke, go broke.

[Joe Ferguson forever]

1 hour ago, nedboy7 said:

I hope wokeness doesn’t make it snow today. 

It's snowing right now in Virginia.  I blame Youngkin (altho I like him better than Desantis).  It's swampy, muggy and inhospitable in Fla today.

20 minutes ago, B-Man said:

 

 

ANDY KESSLER: Who Killed Silicon Valley Bank?

 

Was there regulatory failure? Perhaps. SVB was regulated like a bank but looked more like a money-market fund.

 

Management screwed up interest rates, underestimated customer withdrawals, hired the wrong people, and failed to sell equity. You’re really only allowed one mistake; more proved fatal.

 

Was management hubristic, delusional or incompetent? Sometimes there’s no difference.

 

https://www.wsj.com/articles/who-killed-silicon-valley-bank-interest-rates-treasury-federal-reserve-ipo-loan-long-term-bond-capital-securities-startup-jpmorgan-bear-stearns-lehman-brothers-b9ca2347

 

 

Get woke, go broke.

That's not what the piece says.

[B-Man]

6 minutes ago, redtail hawk said:

 

That's not what the piece says.

 

 

Yes it does.

 

You forgot to remove your blinders first.

 

 

[nedboy7]

1 hour ago, SoCal Deek said:

Nah…but we are expecting more rain out here on the west coast. Thanks for asking. 

 

That is good for the drought Biden created.  Like a MAGA rain!!! 

[Joe Ferguson forever]

4 minutes ago, B-Man said:

 

 

Yes it does.

 

You forgot to remove your blinders first.

 

 

please cut and paste a piece of the WSJ article that expresses your sentiment Get Woke, Go Broke.  It's catchy tho, on the level of Desanctimonious

[aristocrat]

11 minutes ago, redtail hawk said:

please cut and paste a piece of the WSJ article that expresses your sentiment Get Woke, Go Broke.  It's catchy tho, on the level of Desanctimonious

 

Did you see any nazi recruiting posters at SVB? Maybe they're responsible?

[Joe Ferguson forever]

8 minutes ago, aristocrat said:

 

Did you see any nazi recruiting posters at SVB? Maybe they're responsible?

No, but I saw this:

https://www.msn.com/en-us/news/us/swastikas-image-of-hitler-drawn-on-jewish-students-door-at-stanford/ar-AA18AhoB

[aristocrat]

1 minute ago, redtail hawk said:

No, but I saw this:

https://www.msn.com/en-us/news/us/swastikas-image-of-hitler-drawn-on-jewish-students-door-at-stanford/ar-AA18AhoB

 

strange that your nazi recruiting posters never made thenews. perhaps because you created it in your mind for some reason

[Joe Ferguson forever]

3 minutes ago, aristocrat said:

 

strange that your nazi recruiting posters never made thenews. perhaps because you created it in your mind for some reason

It was small potatoes compared to what I just posted.  I suspect that there are so many incidents, only the most disgusting make it to press.

[Joe Ferguson forever]

on a happier note:

https://finance.yahoo.com/news/stock-market-news-today-live-updates-march-14-2023-112356261.html

[B-Man]

 

 

 

 

[Joe Ferguson forever]

20 minutes ago, B-Man said:

 

 

 

 

Wow.  The propagandists are working over time.  Some big bucks went into producing that pos.  here's the only signature bank ad video I could find on youtube.  Comical in its own right but not in the way you meant

 

Edited March 14, 2023 by redtail hawk

[aristocrat]

33 minutes ago, redtail hawk said:

It was small potatoes compared to what I just posted.  I suspect that there are so many incidents, only the most disgusting make it to press.

Or in reality they report that exact amount that happen. Especially in the day and age of social media where literally everything gets reported.

[Joe Ferguson forever]

Here's some real videos.  The feather one sure appears to be a fake.  They're actually selling the fact that they're not old school. Not a bad gimmick except they were incompetent in the trenches.  Buyer beware...

https://www.ft.com/content/9f5fb420-0481-4804-9971-f1d4ad7fbb1b

[SoCal Deek]

1 hour ago, nedboy7 said:

 

That is good for the drought Biden created.  Like a MAGA rain!!! 

We’re already at almost double our annual rainfall total. Yes, we’re accustomed to actually monitoring it out here…go figure. We’ll get a bit more rain in the remaining two weeks of March and then believe it or not it literally won’t rain at all until November. The problem we have is they’ve done nothing to increase our storage capacity…even though we passed a huge initiative to spend billions doing just that almost a decade ago. Yep…you guessed it….environmentalists killed the progress on any storage reservoirs. 

[BillsFanNC]

 

[Joe Ferguson forever]

6 minutes ago, BillsFanNC said:

 

Except "everyone else" doesn't include taxpayers.  Off to the kids table with you.  Let the adults discuss this rationally.  From a New York Post article today:

“Had the [Federal Deposit Insurance Corporation], [the Treasury], and [the Federal Reserve] not intervened today, we would have had a 1930s bank run continuing first thing Monday causing enormous economic damage and hardship to millions,” Ackman tweeted.

“Our gov’t did the right thing.”

Certainly other masters of the universe disagree but Biden's actions were not crazy.

Edited March 14, 2023 by redtail hawk

[ChiGoose]

42 minutes ago, redtail hawk said:

Except "everyone else" doesn't include taxpayers.  Off to the kids table with you.  Let the adults discuss this rationally.  From a New York Post article today:

“Had the [Federal Deposit Insurance Corporation], [the Treasury], and [the Federal Reserve] not intervened today, we would have had a 1930s bank run continuing first thing Monday causing enormous economic damage and hardship to millions,” Ackman tweeted.

“Our gov’t did the right thing.”

Certainly other masters of the universe disagree but Biden's actions were not crazy.

Also, the shareholders and investors are getting nothing. Only the depositors are getting anything. 

[leh-nerd skin-erd]

14 hours ago, Gene Frenkle said:

You guys are idiots with your BS Fox News crap. This happened because of greed, plain and simple.

Greed seems to be the solution as well.  Suddenly, no concerns about pesky rich folk getting rich again, no concerns about winners and losers (beyond the bond/stock holders), no limits to how much can be backfilled into the account…just money in, grateful recipients, political donors etc. 

[BillStime]

1 hour ago, BillsFanNC said:

 

 

Same guy

 

[Joe Ferguson forever]

28 minutes ago, leh-nerd skin-erd said:

Greed seems to be the solution as well.  Suddenly, no concerns about pesky rich folk getting rich again, no concerns about winners and losers (beyond the bond/stock holders), no limits to how much can be backfilled into the account…just money in, grateful recipients, political donors etc. 

No, plenty of concern. The article from the WSJ stated Biden was ambivalent about the plan for these vey reasons. He decided the benefits outweighed the risks 

[SoCal Deek]

42 minutes ago, BillStime said:

 

Same guy

 

And you believe this photo shows what exactly? 

[leh-nerd skin-erd]

4 minutes ago, redtail hawk said:

No, plenty of concern. The article from the WSJ stated Biden was ambivalent about the plan for these vey reasons. He decided the benefits outweighed the risks 

Look Red,  I don’t know whether contagion fears are real or not, or whether or not SVB depositors should be saved. 
 

 I don’t think Biden gives a $&@$ about anything beyond what is in the best interest of his party, but would certainly be happy if it also was in the best interest of the country.  
 

What’s clear is some extraordinarily wealthy people were saved here, and that’s probably pretty good for Biden and Co.  It may also be good for the country.

 

I don’t think Biden fretted over anything, love him or hate him, he likely doesn’t have a clue on any of that nor would I expect him to.
He’s a trained monkey in this case, as would be the case with most Presidents.  
 

It’s interesting to me that there was no limit on the extent to which a depositor could be protected.  $1m? $10m?  $100m?    Any way you slice it, you end back at the same spot. 
 

 

 
 

 

[ChiGoose]

21 minutes ago, leh-nerd skin-erd said:

 

It’s interesting to me that there was no limit on the extent to which a depositor could be protected.  $1m? $10m?  $100m?    Any way you slice it, you end back at the same spot. 
 

 

 
 

 

I believe most of SVB’s depositors were small businesses. I don’t think it’s unreasonable to cover their deposits so long as we are not bailing out the investors, shareholders, or management. 

[Tommy Callahan]

2 hours ago, SoCal Deek said:

We’re already at almost double our annual rainfall total. Yes, we’re accustomed to actually monitoring it out here…go figure. We’ll get a bit more rain in the remaining two weeks of March and then believe it or not it literally won’t rain at all until November. The problem we have is they’ve done nothing to increase our storage capacity…even though we passed a huge initiative to spend billions doing just that almost a decade ago. Yep…you guessed it….environmentalists killed the progress on any storage reservoirs. 

but are silent about the Salton sea geothermal drilling cause, Lithium.

 

 

[nedboy7]

2 hours ago, SoCal Deek said:

We’re already at almost double our annual rainfall total. Yes, we’re accustomed to actually monitoring it out here…go figure. We’ll get a bit more rain in the remaining two weeks of March and then believe it or not it literally won’t rain at all until November. The problem we have is they’ve done nothing to increase our storage capacity…even though we passed a huge initiative to spend billions doing just that almost a decade ago. Yep…you guessed it….environmentalists killed the progress on any storage reservoirs. 

 

It's a complex issue that is reduced to tribal simple mindedness.  Try curbing water use a little as well.  I dont see any sensible conservation efforts out of CA.

[BillsFanNC]

Saying the quiet part out loud...

 

 

[leh-nerd skin-erd]

4 minutes ago, ChiGoose said:

I believe most of SVB’s depositors were small businesses. I don’t think it’s unreasonable to cover their deposits so long as we are not bailing out the investors, shareholders, or management. 

I don’t know what “unreasonable” means in this context?  If it saved the banking system and prevented a run, yeah, it was for the greater good.  That’s an argument made by more than a few experts in the field.     
 

Either way, it’s reasonable to question who benefited and to what extent.  As for investors and bond holders, I dunno, if we’re saving folk, why not save them all? 

[ChiGoose]

4 minutes ago, leh-nerd skin-erd said:

I don’t know what “unreasonable” means in this context?  If it saved the banking system and prevented a run, yeah, it was for the greater good.  That’s an argument made by more than a few experts in the field.     
 

Either way, it’s reasonable to question who benefited and to what extent.  As for investors and bond holders, I dunno, if we’re saving folk, why not save them all? 

I think we’re probably mostly in agreement about the depositors. They did nothing wrong here and letting them fail can really risk harm to the economy. If the damage is limited to these two banks, the cost of making them whole should be covered by the sale of assets and the FDIC’s fund (if needed).
 

My concern about investors/shareholders is that covering their losses might encourage more risky behavior in the industry. If you make an investment, you run the risk of that investment going bad, I’m not sure it should be the government’s job to cover you. 

[leh-nerd skin-erd]

12 minutes ago, ChiGoose said:

I think we’re probably mostly in agreement about the depositors. They did nothing wrong here and letting them fail can really risk harm to the economy. If the damage is limited to these two banks, the cost of making them whole should be covered by the sale of assets and the FDIC’s fund (if needed).
 

My concern about investors/shareholders is that covering their losses might encourage more risky behavior in the industry. If you make an investment, you run the risk of that investment going bad, I’m not sure it should be the government’s job to cover you. 

Maybe on depositors.  I’m not certain “they did nothing wrong here” really applies, lots of companies and businesses do nothing wrong, fail and the govt doesn’t step in.  I did some light reading here and checked out some of the companies linked to SVB…of the 10 or so I checked, CEOs ranged from $5m net worth to hundreds of millions to a couple billionaires.  I feel compassion for the $5m folk, get a little less concerned when you start talking hundo-millions +.   
 

I completely agree that as assets are sold, in a perfect world depositors should be made whole and that would be the best outcome of all here. 
 

As for bond/stockholders, I understand and that’s the traditional

logic. My only point is if they are making sh-T up on the fly to protect those without protection, it seems an odd line to draw to suggest Mark Cuban gets his $10m back and Grandpa Earl gets hosed out of his $26,000 investment he held for a few years.