Stat Monitor Repairman said:

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This is the same story as tether

https://medium.com/yardcouch-com/this-is-bitcoins-biggest-secret-the-great-tether-ponzi-scheme-d72ce569f2ba


It went from 1:1 to 90% to 30%. Now it is at something like 8%.


Wish I could find the article that explained it. They explained that Tether's market cap was orders of mag greater than anything else and if it ever failed, bad things

Fightin_Aggie said:

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tremble said:

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cone said:

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the pressure on Jay Powell must be completely crushing

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I think Powell has come to the realization that he must become the Batman for the markets. I don't think he cares about his short-term reputation, nor should he. He's only one man, but he can take steps (rising rates) to combat the financial insanity that resulted in "tech" companies lighting money on fire to try and push scale.

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Powell is an arrogant *****, he is no Batman

He is a guy who will listen to no one, make a wrong decision that may eventually get him where he wants to be after destroying trillions of dollars of value and never once consider that he could have been wrong


That there might have been a different way that didn't require destroying millions of peoples lives

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Your idiot king demanded that Powell keep rates at zero or go negative.

What happened this week at Silicon Valley Bank is deeply troubling.

Workers across California depend on the bank for their paychecks. And this bank fuels the start up economy.

The FDIC must provide clarity quickly, and the bank’s management and finances must be investigated.

— Adam Schiff (@RepAdamSchiff) March 11, 2023

Phase III bear markets always involve credit events. This has been an obvious scenario in the making following the crypto pyramid. That SBV is first too implode is just so much sweeter. Not a contagion event. But oh so sweet.

Nanomachines son said:

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DallasAg 94 said:

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Imagine what it would do to the California economy if all that money was lost.

The State budget would tank with all those loses written off.

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real bad day for startups called like Puppr that make apps to teach dogs yoga pic.twitter.com/hOs873yYT1

— alex zawacki (@AChillGhost) March 11, 2023

The startups in California are royally ****ed.

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Founders, funds, and everyone close to this have been really open a cooperative and transparent with where they stand. I can assure you funds and investors know which companies are impacted and how severely.

Rumors I'm hearing are pretty hopeful this will blow over quickly, at least there will be options for liquidity and cash available to make payrolls. Banks and venture funds will lend to start ups while the FDIC sorts it out. Some funds have already indicated they will front payroll for their portfolio companies that are impacted, and some funds are moving to lend to their portfolio companies (and non portfolio companies) with very good terms so that the companies they're invested in don't fold. They don't really want to make money from the loan, they just want their portfolio investments to survive. Demanding high interest rates doesn't help, it's not really in their interest to make money from the loan compared to seeing the companies they've backed succeed.

Companies that have been performing well won't be left for dead by the VCs. The under performs I could see being abandoned though.

There is a real chance that some impacted start ups are forced to raise more capital and sell more equity to investors that are taking advantage of this situation.

Maybe not every company knows yet if they can make payroll, but I expect options to materialize over the weekend and be available to companies that need it.

The most likely outcome is that next week emergency payroll options materialize for these companies and within a few weeks depositors get access to their money through the liquidation of SVB assets and government bailouts.

Great read. This was a bank run and I think all that is required to cover deposits is some time to liquidate SVBs assets. In the mean time founders, funds, banks, and the government will be doing everything in their power working together to make sure employees get paid on time.

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And a lot of SVB's assets are just government bonds, which are very easy to value and which will have retained most of their value. So it's very possible that even uninsured deposits will be made whole. Matt Levine thinks that the government will lean on SVB's buyer(s) to make depositors whole, as a way of preventing panic and contagion
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The other big risk for startups and the reason they're currently panicking is the possibility that they won't be able to make payroll next week. But although this is undeniably scary, I doubt it's a huge danger. First of all, lots of companies are small enough where they can get by for a week or two on $250,000. Second, the FDIC has promised to pay SVB's depositors an "advance dividend" next week, which will also help make payroll. To do this, they'll either A) find a buyer for all of SVB's assets very soon, or B) sell off some of SVB's more marketable bonds in order to send depositors enough cash to keep making payroll til they can complete the broader sale. The FDIC has a strong incentive not to let startups vaporize over the next few weeks because they can't pay their employees. It's going to be a nail-biting week or two for startups, but my advice is not to panic.

As for the employees, I doubt they will quit en masse, even in the worst-case scenario where they have to wait a week to get paid. Such are the risks of startup life.

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Friendly reminder. Bank assets are the loans they have given out which are more than likely secured, but not always. That being said, no one is going to pay market prices for fire sale assets when they are high PD and LGD given the risky nature of the borrowers. It's not a rosy picture and plenty of distressed asset management groups could come in, but not good.

My statement on the Silicon Valley Bank Closure. pic.twitter.com/AcYKfqBsWq

— Rep. Eric Swalwell (@RepSwalwell) March 11, 2023

austinaggie2012 said:

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Proud to be on @Forbes' annual ranking of America's Best Banks for the 5th straight year and to have also been named to the publication's inaugural Financial All-Stars list.

👉 https://t.co/rEmfOSTT4f pic.twitter.com/NFWlPJUbh5

— SVB (@SVB_Financial) March 6, 2023

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Ha, life comes at you fast.

6% inflation new normal guy checking in

I don't even know what a derivative is. What would make the derivative market crash in the future? I've read that it's in the trillions of dollars in size.

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.

I believe this stuff is why there are not more billionaires in the world. People who inherit wealth or win it in lottery of life (become a superstar, win ghetto lottery, get elected to Congress) tend to not be very smart and be able to plentifully associate themselves with equally mentally deficient folks.

If you are smart and have smart friends, your wealth will almost certainly continue to grow.

lobopride said:

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I don't even know what a derivative is. What would make the derivative market crash in the future? I've read that it's in the trillions of dollars in size.

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Simply, a derivative is an asset whose value is a function of a different asset. Options are a type of derivative whose value is a function of asset price, volatility, time, and interest rates. Swaps are another prevalent type derivative. Credit default swaps are one that are usually mentioned, but there are many other types. The way to think about it is "I have exposure to something, and I want no exposure or exposure to something else instead". In this case you can find someone who wants the exposure and is willing to "swap" with you.

fka ftc said:

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I believe this stuff is why there are not more billionaires in the world. People who inherit wealth or win it in lottery of life (become a superstar, win ghetto lottery, get elected to Congress) tend to not be very smart and be able to plentifully associate themselves with equally mentally deficient folks.

If you are smart and have smart friends, your wealth will almost certainly continue to grow.

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"The Millionaire Next Door" explained this very well. Essentially it started out as a book by a couple academics wanting to understand wealth, who had it, and how they got it. What they found was that starting with wealth is often not a reliable indicator because if you don't know how to make more and you don't have frugal spending habits most will go through it. Lots of other revelations in that book as well but fundamentally they found that at least in the US a significantly large percentage of people move from the high end to the low end of the spectrum and vice versa in terms of income and wealth.

There is a lot of wisdom in saying the most fortunate people are those who grow up with little means but excellent parents. You can't teach a wealthy person what it was like to grow up poor or with little means and the drive and desire to both succeed and appreciate that success and you can't replace excellent parenting. You can certainly be successful or have a happy life without either but the point is those are two great advantages in life.

FWIW, I have tried to raise my boys utilizing many of the principles from "Millionaire" as well as "Rich Dad, Poor Dad". It's tragic that neither book is taught and emphasized in schools and if anything the opposite is emphasized.

Hearing from some insiders:
-big banks actively working on buying svb business
-fdic considering insurance / liquidity covering up to 95pct of uninsured depositors to acquirer
-Monday 250k on track
-50pct of uninsured paid out next wk

Cant confirm myself but seemed worth sharing

— Bob Elliott (@BobEUnlimited) March 11, 2023

I heard a similar rumor late yesterday from the startup/VC community saying that 50% of funds will be available next week to depositors. Seems the rumor is spreading to Twitter. Not sure of the origin so I wouldn't take it as gospel, probably just wishful thinking.

Too big to fail. Oprah, Harry, celebs, etc. Gov't will bail these libs out.

Nanomachines son said:

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DallasAg 94 said:

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Imagine what it would do to the California economy if all that money was lost.

The State budget would tank with all those loses written off.

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real bad day for startups called like Puppr that make apps to teach dogs yoga pic.twitter.com/hOs873yYT1

— alex zawacki (@AChillGhost) March 11, 2023

The startups in California are royally ****ed.

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Good thing they are unarmed. Just think what might happen when "no money" turns into "no food".

Useful idiots.

I mean, we can all make fun of a yoga app for pups, it's less humorous when a life sciences company researching promising cancer treatments can't make payroll through the bad decisions of their bank, and not their own bad business plan.

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 admitted to stock manipulation when he ran a hedge fund. Wonder if he bought a bunch of puts? The guy admitted to being a crook, who the hell would take advise from this corrupt person.

SWCBonfire said:

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This says SJIM

https://www.thestreet.com/etffocus/blog/inverse-cramer-etf-is-live

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based on his past history he may be working with these reverse cramer etfs.

jh0400 said:

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lobopride said:

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I don't even know what a derivative is. What would make the derivative market crash in the future? I've read that it's in the trillions of dollars in size.

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Simply, a derivative is an asset whose value is a function of a different asset. Options are a type of derivative whose value is a function of asset price, volatility, time, and interest rates. Swaps are another prevalent type derivative. Credit default swaps are one that are usually mentioned, but there are many other types. The way to think about it is "I have exposure to something, and I want no exposure or exposure to something else instead". In this case you can find someone who wants the exposure and is willing to "swap" with you.

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As a practical example to this, suppose that you have a mortgage with a variable interest-rate that is tied to treasury bonds. Suppose that you were concerned that due to high inflation, interest rates could go to 25% and you would be absolutely screwed. You might therefore be willing to pay someone who is willing to take on the risk that interest rates will go up a premium so that they take on your interest-rate risk and you get to have a fixed rate and don't have to worry about going bust.

I'm shocked. Shocked I tell you.

Who the hell was in charge of risk management at SVB and what the hell were they focused on???

Oh pic.twitter.com/xdkzjqRPmc

— Comfortably Smug (@ComfortablySmug) March 11, 2023

That says UK…? Is it related to the American operation? I read they were operated separately…? Is that right or wrong?

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}

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.

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.

So many will not sacrifice their youth to ensure retirement.