It's 2023 and hysteria travels at the speed of light;

boomers in charge will be caught flat footed.

(2) Arsonist.
FED created $5 trillion out of thin air so Congress could inject this money into the economy. There weren’t 5 trillion dollars to borrow during COVID, and certainly not at the low rates imposed by FED. Inflation was off to the races thanks to dilution.

— Thomas Massie (@RepThomasMassie) March 12, 2023

He's got it

(4) Trauma Doctor.
Will the FED play a role in bailing out SVB depositors and other banks? Possibly by lowering rates, buying their holdings at above value, or creating more money for bailouts. None of these are free. But the FED becomes Santa Claus again and inflation rages on.

— Thomas Massie (@RepThomasMassie) March 12, 2023

SVB may have lost money for 97% of its clients, but the good news is they did it with minimal climate impact.

So good job on that.

Stat Monitor Repairman said:

---

SVB may have lost money for 97% of its clients, but the good news is they did it with minimal climate impact.

So good job on that.

---

Their customers eat it up.

DallasAg 94 said:

---

Scud Runner said:

---

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.

---

I haven't seen this posted, yet.

https://www.foxbusiness.com/economy/silicon-valley-bank-exec-was-lehman-brothers-cfo-prior-to-2008-collapse

Quote:

---

Silicon Valley Bank (SVB) executive, Jospeph Gentile, was a former executive of the Lehman Brothers' Global Investment Bank prior to the bank's public collapse in 2008.

---

https://www.svbsecurities.com/team/joseph-gentile/

Quote:

---

Prior to joining the firm in 2007, Mr. Gentile served as the CFO for Lehman Brothers' Global Investment Bank where he directed the accounting and financial needs within the Fixed Income division.

---

Quote:

---

He started his career at Arthur Andersen.

---

His time at Arthur Anderson was likely prior to Enron, but, being connected to companies like Enron, Lehman's, and now SVB can't be good.

---

Seems to be quite adept at failing upwards.

Never understood handing the keys to someone who had run the car off the road a time or two, even if it was not there fault.

Stat Monitor Repairman said:

---

SVB may have lost money for 97% of its clients, but the good news is they did it with minimal climate impact.

So good job on that.

---

Good news but the offset is that of those 97% I'm sure that BIPOCS and gays were disproportionately affected.

Cancels out.

Someone was saying today that the president of the bank liquidated all his shares last week

Regulators close New York's Signature Bank, citing systemic risk https://t.co/92UzGwyThf

— CNBC (@CNBC) March 12, 2023

That's three banks in one weekend correct?

No one going to learn anything

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm

Customers will have full access to all accounts on Monday.

Quote:

---

Federal regulators rolled out emergency measures Sunday night to stem potential spillovers from Friday's swift collapse of Silicon Valley Bank, including measures to backstop all depositors.
…

"Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."

The Fed said it would make additional funding available to banks to ensure they have "the ability to meet the needs of all depositors" through a new "Bank Term Funding Program," which will offer loans of up to one year to banks that pledge U.S. Treasury securities, mortgage-backed securities and other collateral.

---

https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98

techno-ag said:

---

Customers will have full access to all accounts on Monday.

Quote:

---

Federal regulators rolled out emergency measures Sunday night to stem potential spillovers from Friday's swift collapse of Silicon Valley Bank, including measures to backstop all depositors.
…

"Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."

The Fed said it would make additional funding available to banks to ensure they have "the ability to meet the needs of all depositors" through a new "Bank Term Funding Program," which will offer loans of up to one year to banks that pledge U.S. Treasury securities, mortgage-backed securities and other collateral.

---

https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98

---

As the above poster said, we never learn a GD thing. Someone is going to have to explain to me how the taxpayers are not involved in this.

fka ftc said:

---

DallasAg 94 said:

---

Scud Runner said:

---

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.

---

I haven't seen this posted, yet.

https://www.foxbusiness.com/economy/silicon-valley-bank-exec-was-lehman-brothers-cfo-prior-to-2008-collapse

Quote:

---

Silicon Valley Bank (SVB) executive, Jospeph Gentile, was a former executive of the Lehman Brothers' Global Investment Bank prior to the bank's public collapse in 2008.

---

https://www.svbsecurities.com/team/joseph-gentile/

Quote:

---

Prior to joining the firm in 2007, Mr. Gentile served as the CFO for Lehman Brothers' Global Investment Bank where he directed the accounting and financial needs within the Fixed Income division.

---

Quote:

---

He started his career at Arthur Andersen.

---

His time at Arthur Anderson was likely prior to Enron, but, being connected to companies like Enron, Lehman's, and now SVB can't be good.

---

Seems to be quite adept at failing upwards.

Never understood handing the keys to someone who had run the car off the road a time or two, even if it was not there fault.

---

You'd think maybe he would have learned a lot being in the midst of it, and have good insights to prevent it in the future. That's typically why employers pay more for experience, because of lessons learned. But from his title, it's not clear he was responsible for the banks asset allocations.

Bocephus said:

---

techno-ag said:

---

Customers will have full access to all accounts on Monday.

Quote:

---

Federal regulators rolled out emergency measures Sunday night to stem potential spillovers from Friday's swift collapse of Silicon Valley Bank, including measures to backstop all depositors.
…

"Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."

The Fed said it would make additional funding available to banks to ensure they have "the ability to meet the needs of all depositors" through a new "Bank Term Funding Program," which will offer loans of up to one year to banks that pledge U.S. Treasury securities, mortgage-backed securities and other collateral.

---

https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98

---

As the above poster said, we never learn a GD thing. Someone is going to have to explain to me how the taxpayers are not involved in this.

---

They sold the assets to another bank? That covers the amount of the deposits?

techno-ag said:

---

Customers will have full access to all accounts on Monday.

Quote:

---

Federal regulators rolled out emergency measures Sunday night to stem potential spillovers from Friday's swift collapse of Silicon Valley Bank, including measures to backstop all depositors.
…

"Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."

The Fed said it would make additional funding available to banks to ensure they have "the ability to meet the needs of all depositors" through a new "Bank Term Funding Program," which will offer loans of up to one year to banks that pledge U.S. Treasury securities, mortgage-backed securities and other collateral.

---

https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98

---

The pigs are lying.

Bocephus said:

---

techno-ag said:

---

Customers will have full access to all accounts on Monday.

Quote:

---

Federal regulators rolled out emergency measures Sunday night to stem potential spillovers from Friday's swift collapse of Silicon Valley Bank, including measures to backstop all depositors.
…

"Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."

The Fed said it would make additional funding available to banks to ensure they have "the ability to meet the needs of all depositors" through a new "Bank Term Funding Program," which will offer loans of up to one year to banks that pledge U.S. Treasury securities, mortgage-backed securities and other collateral.

---

https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98

---

As the above poster said, we never learn a GD thing. Someone is going to have to explain to me how the taxpayers are not involved in this.

---

The press release sounds like the Treasury is going to recoup some of the compensation that the bank leadership paid itself and its shareholders then make up the difference with a "special assessment" of other FDIC member banks.

If I read that correctly, the Treasury is preventing a bank run next week, but taking funds from other banks that are already struggling with the increased fed rate.

So... kicking the can down the road.

bmks270 said:

---

They sold the assets to another bank? That covers the amount of the deposits?

---

I think this is the key paragraph:

Quote:

---

The Fed said it would make additional funding available to banks to ensure they have "the ability to meet the needs of all depositors" through a new "Bank Term Funding Program," which will offer loans of up to one year to banks that pledge U.S. Treasury securities, mortgage-backed securities and other collateral.

---

Silicon Valley made a big mistake with the tenor of rehear investment portfolio. But, they were well collateralized…just not set up for rising rates. The Fed "bailout" is allowing bank's liquidity against their securities portfolios without having to sell bonds at a loss to provide liquidity. This will help quite a bit and won't actually cost the tax payer. The Banks will repay these loans at a standard fed borrowing rate.

What this won't fix is the broader problem that caused SVB to need to sell their bonds. Quantitative tightening is removing liquidity from the market (that should never have been there). We will see more and more of this as Banks try to adjust to a new deposit equilibrium.

jt2hunt said:

---

Someone was saying today that the president of the bank liquidated all his shares last week

---

Yes, that is what I read somewhere else. He sold a couple of million bucks worth of stock.

Also, supposedly the bank paid senior management their bonuses just a couple of days ago.

They saw it coming and took care of themselves.

One of the things they did was loan to high tech startups with the proviso that all their money stayed at SVB.

Quote:

---

It was around that time that Mr. Badhwar decided it would be prudent to secure a credit linean insurance policy that could help keep his company afloat for another year if needed. SVB was willing to lend to Endor, so long as the company moved all of its money to the bank, he said.
…

Founders across Silicon Valley are scrambling to figure out how they'll pay employees this week. Jonathan Bensamoun's smart dog collar company, Fi, had been banking with SVB since its founding five years ago. That relationship deepened when Fi took on a $10 million credit line. In return, Fi had to keep all of its operating accounts at SVB.

---

Here is the press release for the Bank Term Funding Program

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm

The additional funding will be made available through the creation of a new Bank Term Funding Program (BTFP), offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. These assets will be valued at par. The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution's need to quickly sell those securities in times of stress.

So yellen lied?

yellen lied.

banks died.



also works:

Yellen tried.

Banks still died.

PCC_80 said:

---

jt2hunt said:

---

Someone was saying today that the president of the bank liquidated all his shares last week

---

Yes, that is what I read somewhere else. He sold a couple of million bucks worth of stock.

Also, supposedly the bank paid senior management their bonuses just a couple of days ago.

They saw it coming and took care of themselves.

---

Yeah, even though the sales were out in a few months ago and reported, the timing is odd. Just before their bad financial statement release? They probably knew it was going to be bad for month so they set themselves up nicely before the bomb dropped.

plain_o_llama said:

---

Here is the press release for the Bank Term Funding Program

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm

The additional funding will be made available through the creation of a new Bank Term Funding Program (BTFP), offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. These assets will be valued at par. The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution's need to quickly sell those securities in times of stress.

---

I'm sure there will be no consequences of incentivizing more risk taking in the financial sector.

cgh1999 said:

---

Silicon Valley made a big mistake with the tenor of rehear investment portfolio. But, they were well collateralized…just not set up for rising rates. The Fed "bailout" is allowing bank's liquidity against their securities portfolios without having to sell bonds at a loss to provide liquidity. This will help quite a bit and won't actually cost the tax payer. The Banks will repay these loans at a standard fed borrowing rate.

What this won't fix is the broader problem that caused SVB to need to sell their bonds. Quantitative tightening is removing liquidity from the market (that should never have been there). We will see more and more of this as Banks try to adjust to a new deposit equilibrium.

---

What are they going to pay back the loans with?

Sounds like they're just slowing the bleeding, not stopping it. Does this just give them more time to slowly lower the interest rates?

bmks270 said:

---

cgh1999 said:

---

Silicon Valley made a big mistake with the tenor of rehear investment portfolio. But, they were well collateralized…just not set up for rising rates. The Fed "bailout" is allowing bank's liquidity against their securities portfolios without having to sell bonds at a loss to provide liquidity. This will help quite a bit and won't actually cost the tax payer. The Banks will repay these loans at a standard fed borrowing rate.

What this won't fix is the broader problem that caused SVB to need to sell their bonds. Quantitative tightening is removing liquidity from the market (that should never have been there). We will see more and more of this as Banks try to adjust to a new deposit equilibrium.

---

What are they going to pay back the loans with?

Sounds like they're just slowing the bleeding, not stopping it. Does this just give them more time to slowly lower the interest rates?

---

I'm assuming the securities that are pledged as collateral

Public co executives generally don't get to sell shares outside of preplanned sales. The sales made by the SVB CEO were disclosed back in January when he put a 10b-5 trading plan in place. It's unlikely that he sold it all as that would have created an issue when the plan was disclosed.

Is it conceivable that they planned the sale seeing the writing on the wall?

That's a reach.

bmks270 said:

---

cgh1999 said:

---

Silicon Valley made a big mistake with the tenor of rehear investment portfolio. But, they were well collateralized…just not set up for rising rates. The Fed "bailout" is allowing bank's liquidity against their securities portfolios without having to sell bonds at a loss to provide liquidity. This will help quite a bit and won't actually cost the tax payer. The Banks will repay these loans at a standard fed borrowing rate.

What this won't fix is the broader problem that caused SVB to need to sell their bonds. Quantitative tightening is removing liquidity from the market (that should never have been there). We will see more and more of this as Banks try to adjust to a new deposit equilibrium.

---

What are they going to pay back the loans with?

Sounds like they're just slowing the bleeding, not stopping it. Does this just give them more time to slowly lower the interest rates?

---

Banks will be able to borrow at fed funds rate (4.75%) against all of their bonds at par, even if the bonds aren't worth as much. This will allow them to continue lending at a higher rate.

As I mentioned earlier, liquidity amongst all banks was shrinking. Lots of banks were in a position of needing to sell bonds at a loss to bolster liquidity. Now they don't have to sell.

I've talked to bankers at "safe" banks, mega banks, community, regional, etc. We are ALL looking for deposits. Loan standards are tightening for two reasons- potential credit risk and liquidity concerns.

While I don't love this decision, I can assure you it was needed. Bank capital is significantly higher than the last financial crisis. Credit standards have improved. No one could have foreseen the Fed removing liquidity and raising rates faster and farther than ever. You can't underwrite that risk.