Joseph Gentile is the Chief Administrative Officer? Doomed from the beginning. Try going with an Ira Rosenberg next time. Any -berg or -itz, Levy/Goldmann combo.

aggielostinETX said:

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This is not the beginning of 2009 again.

But you are about to see how corrupt are California legislators.

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And not a damn thing will be done about it.

bmks270 said:

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richardag said:

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will25u said:

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I’m working with my CA colleagues to address the Silicon Valley Bank crisis. We must make sure all deposits exceeding the FDIC $250k limit are honored. Banking is about confidence. If depositors lose confidence on the safety of their deposits over 250k then we are in trouble.

— Rep. Eric Swalwell (@RepSwalwell) March 10, 2023

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Federal Bailout using the American Tax payers as collateral (re: more correctly we are the hostages of corrupt POS in the Federal Government}

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The "bailout" would be to the bank customers who can't access their money. These are businesses that have to pay employees and pay bills. Not the bank owners.

If the funds can't be freed up to the businesses then there will be huge turmoil and many out of work. A big loss of new innovation and cutting edge technology as well.

Something like over 60,000 businesses used this bank.

It's been reported that the banks assets exceed their deposit liabilities, so if those assets get sold off, the depositors should be made whole without needing any government money. The FDIC is facilitating the asset transfer/liquidation so depositors can get their funds.

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We shall see, thanks for the response.

Brian and Jaime are flipping a coin for who has to take it on.

Dies Irae said:

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outofstateaggie said:

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Htownag11 said:

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outofstateaggie said:

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Saw this yesterday. People were making comparisons to Enron. No idea if those companions were valid or not. Lots of money being moved for sure.

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Different than Enron, but I think SVB is just as toast. Enron was deliberately fraudulent.

SVB seems to have made some bad/aggressive loans, has a huge portfolio of treasuries/bonds/MBS on their balance sheet at historically low interest rates that are worth less today because market interest rates have risen, and is being forced to liquidate those impaired assets because of growing deposit redemptions.

Because they were intended to be held to maturity, SVB wasn't required to "mark to market" those impaired assets, until now, that is, when they are being liquidated.

The big banks have the same issue with large holdings of debt securities that are impaired but aren't marked as such because they are classified as HTM.

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This just popped up on my Instagram feed. They're listening.

https://www.instagram.com/reel/Cpi-VjkAo7a/?igshid=YmMyMTA2M2Y=

Is this accurate or relevant to this situation?

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Absolutely it is, money used to be not quite free but extremely cheap to get; to make things very simple; if you wanted to borrow $1,000,000 at 2.5% interest; you had to pay $25,000 of interest per year; $2k/mo not bad. Now fast forward to current times, and you have to pay 7% or so; and the amount of interest you have to pay jumps up to $5,800/mo.

That's the issue a lot of these companies have with their bonds. The bonds they're issuing to repay the previous bonds are costing them 3x as much interest, and they're now buried under debt servicing.

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Yup, the whole game is setup on eventually interest rates decreasing over time as to keep reissuing bonds. Eventually this game ends. The periodic function of rising and falling interest rates gets more and more frequent. Going to be interesting when that periodic function is no longer feasible. What then?

Nanomachines son said:

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One month ago, Jim Cramer urged investors to buy Silicon Valley Bank stock $SIVB, saying it was "still cheap" and has "room to run."

The stock's value has since dropped by 66% following concerns that the bank is on the brink of collapsing. pic.twitter.com/5jgjqTGxld

— Watcher.Guru (@WatcherGuru) March 10, 2023

This guy is so consistently wrong that you can make lots of money betting the opposite of what he says.

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That's actually a thing.

I've always liked him, but as an entertainer, not really a financial advisor.

He's on CNBC basically all day every day spitting out opinions on equities as fast as coffee, cocaine, and the English language will allow.

So he's going to get a lot of them wrong and a lot of them right, Nostradamus used the same trick. So, particularly in a bearish market he's going to catch a little heat. Pounding the sell button on every call during Fast Money wouldn't make for very good television.

ac04 said:

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the whole thing is fake. no banks actually have the money that the numbers on the screen indicate

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Well, that's a horrifying thought. If the FDIC is running a ponzi scheme, we're all ****ed.

UTExan said:

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The most difficult part of getting people to grow their wealth is to train them into self-discipline: that they don't "need" a yearly family vacation to Mexico or Hawaii or they don't "need" to eat out 5 times a week when they can pack a lunch is a difficult concept. My wife and I came from cash-strapped backgrounds and determined we would be savers and investors, not victims of "needing" the costly diversions offered by consumer society. Indeed, our "treat" was a weekly date at our favorite restaurant. By the time we reached retirement age, the money was there to do what we wished: cruises, traveling to Mexico twice a year, European vacations, trips to the Middle East, giving generously to our favorite charities, etc with the money being replenished by investment income. And we don't feel we sacrificed anything in the process.

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Yep. In "Millionaire" for instance one of the main principles they found was a common trait among wealthy individuals was living below your means. It was less material how much you made, only that you always lived at least slightly below those means. There are 2 methods to achieve this. One is to be a budget focused person that watches every dollar. The second is a "pay yourself first" model where you treat investing like a bill that must be paid the same as rent.

My Dad always told me, "Son, if you save 10% of your paycheck and half of every raise you will find that you never really have to worry about money down the road."

One point of slight disagreement with you though. I don't have a problem with vacations, especially family vacations. Life experiences are very important and important for strengthening a marriage and a family. It's also important to show kids especially that the world is big with lots of possibilities and that can be done with vacations. They are also not a recurring expense and are easy to ramp up or ramp down based on your situation. You don't need to stay at the Four Seasons but spending time together and experiencing the world is a big part of happiness. Finding great deals and how to get the most out of your vacations is part of the fun. If you wait too long to do so you can also miss your window, especially when talking about children. I also am less of a fan of repetitive vacations to the same place or two that is highly commercialized because there is less benefit. It's ok here and there to go to Disney or a Cruise but if that is all you have shown your kids you have done them a disservice. Kids grow up fast. I have never regretted a family vacation and if it means I have to work an extra few years before retirement or go without some luxuries I will gladly pay that price. You can't ever get that time back though no matter how much money you have.

What I think is the problem is luxuries that are more materialistic. For instance driving a BMW instead of a Toyota. Having a new car instead of a perfectly fine 5 year old car. Buying a boat or a pool that you aren't using constantly. Keeping a perfectly good smart phone for an extra couple of years instead of rushing to upgrade. Those are regular payments that just suck the life out of your ability to save. Next for me would be day to day luxuries like designer clothing or household luxuries you are more focused on how you can appear to others vs your own experiences or happiness. There will always be another "Joneses" that you can't keep up with and even if you do it isn't a path to happiness. Doesn't mean you need to be too extreme there either but those are areas I think are more valid to cut first.

TxAgswin said:

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ac04 said:

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the whole thing is fake. no banks actually have the money that the numbers on the screen indicate

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Well, that's a horrifying thought. If the FDIC is running a ponzi scheme, we're all ****ed.

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Everything is built on levels of trust in the system. That said saying FDIC is a ponzi scheme isn't accurate because it will insure your money to $250k. The problem is if you have $50 million in assets in that bank. Also the fundamentals of value in the companies are still there for the most part. Some will be exposed and go to zero. Some will lose significant value. Others will come in and benefit from the ability to buy on the cheap and invest long term.

The US is still by far the best place in the world to invest and that drives everything.

fka ftc said:

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Simplest way I can understand derivatives is that they are simply a bet of something happening in the future, same as you would book in a casino on a sports game.

If bets start coming in all for one outcome, odds of that outcome happening seem more likely and the bets pay out less. You can also trade these outstanding bets further convoluting the whole thing.

Derivative literally means the value is "derived" by x happening (sometimes by y date, sometimes at z price, sometimes both).

I am sure none of that helps anyone else, but it helps me.

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Billy Ray Valentine said it best...

What I’m hearing via my #SVBwarroom

1/ FDIC has sold ~ half of SVB's assets.

SVB's customers will have $250k unfrozen on Monday, and ~50% of the remaining balance dividended to depositers within 1-2 days of Monday (money market accounts likely to get 100%).

— Mike Moïse (@mavidormike) March 11, 2023

The best data-driven take on #svb that I've seen (thanks CW) -- TLDR: all deposit holders should be made whole...

As mentioned, we think the deposits on balance sheet are very likely to see 100% recovery. One positive aspect of the SVB balance sheet is that such a high % of… https://t.co/6l4eids7iA

— Uri Pomerantz (@uripomerantz) March 11, 2023

bmks270 said:

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The best data-driven take on #svb that I've seen (thanks CW) -- TLDR: all deposit holders should be made whole...

As mentioned, we think the deposits on balance sheet are very likely to see 100% recovery. One positive aspect of the SVB balance sheet is that such a high % of… https://t.co/6l4eids7iA

— Uri Pomerantz (@uripomerantz) March 11, 2023

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Not really sure who this guy is, but considering how much we have been lied to over the last couple of years I really have a hard time believing him. I think that he is blowing smoke while trying to put lipstick on this pig.

In the tweet he says that SVB was holding $91B in Bonds/Securities, mostly Treasuries, and $74B in Loans that they hope to sell. Considering that the Bonds/Securities/Treasuries and Loans are probably mostly at extremely low interest rates (1% - 3%) and that interest rates are now around 6% and rising I would expect them to sell at huge discounts if they sell at all.

Or the government buys them.

So what happens on Monday?

Predictions?

What's the trickle down. What don't we know about?

Page 64 and 69 on the 10-K
https://d18rn0p25nwr6d.cloudfront.net/CIK-0000719739/f36fc4d7-9459-41d7-9e3d-2c468971b386.pdf

Too many important liberals are crying thus the fed is going to be all in on trying to bail in and limit the damage. That's not hard to predict. I don't pretend to know enough to predict if they will successfully stop the bleeding though. It might be a great time to buy the bank stocks that got hammered on Friday, or not. Your welcome.

He's an "entrepreneur" from silicon valley… Hes full of bull****, & sunshine farts…


Still I'm not convinced our dog**** govt won't force middle America to eat the bill on this one just like they have so many times in the past

aggie93 said:

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TxAgswin said:

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ac04 said:

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the whole thing is fake. no banks actually have the money that the numbers on the screen indicate

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Well, that's a horrifying thought. If the FDIC is running a ponzi scheme, we're all ****ed.

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Everything is built on levels of trust in the system. That said saying FDIC is a ponzi scheme isn't accurate because it will insure your money to $250k. The problem is if you have $50 million in assets in that bank. Also the fundamentals of value in the companies are still there for the most part. Some will be exposed and go to zero. Some will lose significant value. Others will come in and benefit from the ability to buy on the cheap and invest long term.

The US is still by far the best place in the world to invest and that drives everything.

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Fair points.

I guess it's not really the FDIC running a ponzi scheme, they're just kind of "in on it", it would be banks themselves running the ponzi scheme, right? If they don't have the funds to pay their depositors and calculate their solvency based anything outside of cash and use speculative or any non-liquid asset assumptions and represent those vehicles as cash, that - by definition - is a ponzi scheme.

The FDIC claim limit indicates how much confidence the Fed has in our banks. My life insurance benefit is a bigger number than the FDIC safety net. Meaning that the calculus comparison between a private insurer and the Fed is that if they are collectively forecasting whether my bank is going to become insolvent or me dropping dead, they think the bank running out of money is more likely.

Neither scenario is great for me.

16th largest bank collapses; single moms most affected

not the work-at-home mothers!!!!!



just kidding. they need to plan and budget better.

Stat Monitor Repairman said:

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So what happens on Monday?

Predictions?

What's the trickle down. What don't we know about?

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Monday people get bridge capital lined up. By the end of the week I think SVB depositors have enough of their funds accessible to make it through to the end of the FDIC process and get the rest of their funds in a few weeks. If SVB asset sales aren't enough to make depositors whole I do think the government will fund the difference or the accounts get sold/assigned to another bank who can take meet deposit withdrawals.

From a source I trust: @SVB_Financial depositors will get ~50% on Mon/Tues and the balance based on realized value over the next 3-6 months. If this proves true, I expect there will be bank runs beginning Monday am at a large number of non-SIB banks. No company will take even a… https://t.co/2BoqtCDKJt

— Bill Ackman (@BillAckman) March 11, 2023

bmks270 said:

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From a source I trust: @SVB_Financial depositors will get ~50% on Mon/Tues and the balance based on realized value over the next 3-6 months. If this proves true, I expect there will be bank runs beginning Monday am at a large number of non-SIB banks. No company will take even a… https://t.co/2BoqtCDKJt

— Bill Ackman (@BillAckman) March 11, 2023

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i think i agree with him.

there will be some panic pulling of accounts > $250K as these idiots just realized what that limit means....

but they eventually have to put the money somewhere.

soon

Reports of lines at First Republic bank today.
It's another start up centric bank.

I guess fear is already spreading.

Nanomachines son said:

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One month ago, Jim Cramer urged investors to buy Silicon Valley Bank stock $SIVB, saying it was "still cheap" and has "room to run."

The stock's value has since dropped by 66% following concerns that the bank is on the brink of collapsing. pic.twitter.com/5jgjqTGxld

— Watcher.Guru (@WatcherGuru) March 10, 2023

This guy is so consistently wrong that you can make lots of money betting the opposite of what he says.

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he is a complete clown who pumps different stocks by interviewing their CEOs and lobbing softball questions

have not watched him for years.

but the CNBC show on at 1700 EST hosted by Melissa Lee is pretty good, it's the one financial show from mainstream media that I will watch.

cone said:

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Quote:

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I think Powell has come to the realization that he must become the Batman for the markets.

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i hope he's got the stomach for the fight

he's got the chance/opportunity to set up the US for the next 40 years

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LOL at you thinking the USA is going to be well set up 40 years from now!

How should the government treat uninsured depositors after a bank run?

It's a question Jay Powell faced as an assistant Treasury secretary in January 1991, and it's recounted in my book (which is worth reading if you're interested in how Powell operates) https://t.co/zYOlqHwoSK pic.twitter.com/zyns06prtH

— Nick Timiraos (@NickTimiraos) March 11, 2023

powell is not batman. what comes next is not going to be surprising at all.

ChiefKiefton said:

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Would this affect banks like Wells Fargo? My account went to zero this morning and it seems to be happening to a lot of people.

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WTF?

Kansas Kid said:

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The key bank to watch is Credit Suisse. SVB is too small by itself to cause a repeat of 08 but CS has some serious problems and is a too big to fail type of firm in the global economy

This is the issue with zero interest rates for 12 years and Obama and Trump both pushed for it. Trump even wanted the negative rates from the Fed that the Europeans had. It felt great if you had money invested in stocks, bonds or real estate while it lasted but it was like a drug addiction causing a bubble in all assets. Getting out of the everything bubble caused by that and the massive stimulus money is going to be painful for a lot of people.

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I definitely remember Trump yelling at the Fed Reserve to lower rates

when they were still at decades long lows..

that should be a campaign issue against his woeful judgement.

If you're a big corporate, why aren't you banking with a bank designated too big to fail? Anybody for that matter

Big banks about to get bigger

bmks270 said:

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Reports of lines at First Republic bank today.
It's another start up centric bank.

I guess fear is already spreading.

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very interesting

just like when the crypto exchanges started to fail.

"everything is fine and contained" stated Sam Bankman Fried

until 6 months later when everything was not fine.