SVB Bank Run: Fed Calling Emergency Meeting

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So there are all of these libertarians etc calling on the Fed/FDIC to basically take over and secure the bank.

Keep in mind, this i only happening because Trump totally gutted regulations that would have prevented this from happening. So we are going to get a massive bailout for Silicon Valley Bank and yet people complain about a few thousand dollars in bailouts for student loans.

For one, the FDIC already took over the bank around 24 hours ago

Two, this is not caused by Trump gutting regulations. The cause was interest rate risk- recall people deposit money at banks and they turn around and lend money, in this case in the form of MBS and treasuries. The fed kept interest rates too low for too long and then they hiked rates precipitously, which caused huge losses for the bank on those securities that were purchased when interest rates were much lower

Disagree. Trump gutted Dodd-Frank that would have protected against this.

Dodd-Frank redefined the DEPOSITOR as an unsecured creditor by lawful authority. Bank deposits therefore become the property of the bank and your deposits represent a liability to the bank. Got it? As an unsecured creditor, you stand second-in-line for those funds and the bank's primary creditors get first dibs. Remember the haircuts people in Cyprus and Argentina took?

I swear, you'll throw out any term because you don't want to take the time to understand things.

You're like a parakeet yelling Trump GOP Trump GOP.

The U.S.practices depositor preference.

Yes. But only for *insured* deposits.

[Anonymous]

Anonymous wrote:15 banks collapsed under Trump and no one batted an eye. This is the first one under Biden, and it was totally orchestrated by Peter Thiel, who is basically an enemy of the US.

Few care if small community banks go under as spillovers are very limited.

The combined assets of the banks you speak of were less than $20 billion. SBV has over $200 billion in assets.

[Anonymous]

Anonymous wrote:15 banks collapsed under Trump and no one batted an eye. This is the first one under Biden, and it was totally orchestrated by Peter Thiel, who is basically an enemy of the US.

Except this is the 2nd largest bank collapse in US history.

[Anonymous]

Anonymous wrote:I'm going to ask a question I already know the answer to: Why are banks investing money that was put on deposit into checking accounts? Shouldn't that only be done with money in savings and CDs?

I don't think you understand fractional reserve banking 101 and the way banking works.

[Anonymous]

Anonymous wrote:

Anonymous wrote:15 banks collapsed under Trump and no one batted an eye. This is the first one under Biden, and it was totally orchestrated by Peter Thiel, who is basically an enemy of the US.

Few care if small community banks go under as spillovers are very limited.

The combined assets of the banks you speak of were less than $20 billion. SBV has over $200 billion in assets.

I think I saw that 97% of their depositors had over $250,000 which is why those accounts were not FDIC insured.

So I'm supposed to feel bad for people who are much much much wealthier than the average American? Nah.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:15 banks collapsed under Trump and no one batted an eye. This is the first one under Biden, and it was totally orchestrated by Peter Thiel, who is basically an enemy of the US.

Few care if small community banks go under as spillovers are very limited.

The combined assets of the banks you speak of were less than $20 billion. SBV has over $200 billion in assets.

I think I saw that 97% of their depositors had over $250,000 which is why those accounts were not FDIC insured.

So I'm supposed to feel bad for people who are much much much wealthier than the average American? Nah.

A large fraction of those accounts are businesses you clown. How do you not understand this?

For example, Patriot Software who handles payroll for millions businesses all over the country used SVB for its accounts. Businesses all over the country could be dramatically affected.

https://www.cantonrep.com/story/business/2023/03/10/silicon-valley-bank-closure-upends-jackson-townships-patriot-software/69995257007/

Patriot Software began fielding complaints around 9 a.m. Friday from customers whose employees hadn't been paid through direct deposit. At that time, Patriot said its bank "has experienced a processing delay," which meant customers may experience a delay with direct deposit. At 11 a.m., Patriot said in a message to a customer that it still expected the issue to be resolved by the end of the day.

You think you're sticking it to wealthy Wall Street types, but in reality the risks are very real for many businesses and common workers who simply won't get paid. But do prattle on.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:15 banks collapsed under Trump and no one batted an eye. This is the first one under Biden, and it was totally orchestrated by Peter Thiel, who is basically an enemy of the US.

Few care if small community banks go under as spillovers are very limited.

The combined assets of the banks you speak of were less than $20 billion. SBV has over $200 billion in assets.

I think I saw that 97% of their depositors had over $250,000 which is why those accounts were not FDIC insured.

So I'm supposed to feel bad for people who are much much much wealthier than the average American? Nah.

The majority of those were businesses and the money there was to meet payroll, which they cannot do now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So there are all of these libertarians etc calling on the Fed/FDIC to basically take over and secure the bank.

Keep in mind, this i only happening because Trump totally gutted regulations that would have prevented this from happening. So we are going to get a massive bailout for Silicon Valley Bank and yet people complain about a few thousand dollars in bailouts for student loans.

For one, the FDIC already took over the bank around 24 hours ago

Two, this is not caused by Trump gutting regulations. The cause was interest rate risk- recall people deposit money at banks and they turn around and lend money, in this case in the form of MBS and treasuries. The fed kept interest rates too low for too long and then they hiked rates precipitously, which caused huge losses for the bank on those securities that were purchased when interest rates were much lower

Disagree. Trump gutted Dodd-Frank that would have protected against this.

Dodd-Frank redefined the DEPOSITOR as an unsecured creditor by lawful authority. Bank deposits therefore become the property of the bank and your deposits represent a liability to the bank. Got it? As an unsecured creditor, you stand second-in-line for those funds and the bank's primary creditors get first dibs. Remember the haircuts people in Cyprus and Argentina took?

I swear, you'll throw out any term because you don't want to take the time to understand things.

You're like a parakeet yelling Trump GOP Trump GOP.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:15 banks collapsed under Trump and no one batted an eye. This is the first one under Biden, and it was totally orchestrated by Peter Thiel, who is basically an enemy of the US.

Few care if small community banks go under as spillovers are very limited.

The combined assets of the banks you speak of were less than $20 billion. SBV has over $200 billion in assets.

I think I saw that 97% of their depositors had over $250,000 which is why those accounts were not FDIC insured.

So I'm supposed to feel bad for people who are much much much wealthier than the average American? Nah.

The majority of those were businesses and the money there was to meet payroll, which they cannot do now.

Some of those businesses.... Pinterest, Roku, Etsy.... and many more.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:15 banks collapsed under Trump and no one batted an eye. This is the first one under Biden, and it was totally orchestrated by Peter Thiel, who is basically an enemy of the US.

Few care if small community banks go under as spillovers are very limited.

The combined assets of the banks you speak of were less than $20 billion. SBV has over $200 billion in assets.

I think I saw that 97% of their depositors had over $250,000 which is why those accounts were not FDIC insured.

So I'm supposed to feel bad for people who are much much much wealthier than the average American? Nah.

They were mostly small businesses. Not individuals. Do you even understand the basics here?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:15 banks collapsed under Trump and no one batted an eye. This is the first one under Biden, and it was totally orchestrated by Peter Thiel, who is basically an enemy of the US.

Few care if small community banks go under as spillovers are very limited.

The combined assets of the banks you speak of were less than $20 billion. SBV has over $200 billion in assets.

I think I saw that 97% of their depositors had over $250,000 which is why those accounts were not FDIC insured.

So I'm supposed to feel bad for people who are much much much wealthier than the average American? Nah.

They were mostly small businesses. Not individuals. Do you even understand the basics here?

The basics are that SVB is not a traditional bank, it is basically a glorified VC that gave below market rates to start up companies and lobbied the feds to reduce the regulatory oversight, and now got caught with their pants down. the small businesses in question took shortcuts, rather than leaving their reserves in a more protected environment.

[Anonymous]

As it is, the auction on SVIB assets is already underway and should be wrapped up by later tonight. It will drag the broader markets down a little but this is not a system failure. It was a failure on the part of SVB leadership.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:15 banks collapsed under Trump and no one batted an eye. This is the first one under Biden, and it was totally orchestrated by Peter Thiel, who is basically an enemy of the US.

Few care if small community banks go under as spillovers are very limited.

The combined assets of the banks you speak of were less than $20 billion. SBV has over $200 billion in assets.

I think I saw that 97% of their depositors had over $250,000 which is why those accounts were not FDIC insured.

So I'm supposed to feel bad for people who are much much much wealthier than the average American? Nah.

They were mostly small businesses. Not individuals. Do you even understand the basics here?

The basics are that SVB is not a traditional bank, it is basically a glorified VC that gave below market rates to start up companies and lobbied the feds to reduce the regulatory oversight, and now got caught with their pants down. the small businesses in question took shortcuts, rather than leaving their reserves in a more protected environment.

This crisis has nothing to do with SVB’s loans. Credit quality was not an issue here.

Lots of tertiary effects to this crisis that are just coming to light. For example, some of SVB’s customers are fintech B2B payment processing and payroll services firms. Those firms’ clients - small and mid sized businesses that have no accounts with SVB - are now not getting their payroll processed. These companies did not even realize that they were connected to SVB.

These are the 2nd and 3rd order effects that SVB’s collapse will imperil. It’s hitting companies that had no direct relationship with SVB. This will cascade outward.

[Anonymous]

After reading this thread, I am even more confused about what is going on with this bank and why it should matter to the average bank account holder.

[Anonymous]