SVB failure

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:UK authorities are scrambling.

https://www.ft.com/content/258d0732-d37b-49d6-8de8-b230a6568965

Likely behind a paywall for most. Some snippets:


UK chancellor Jeremy Hunt was on Saturday locked in talks over how to stop the collapse of Silicon Valley Bank from dealing a heavy blow to Britain’s tech sector.

More than 200 UK-based tech company executives have urged Downing Street to step in, warning that many companies faced an “existential threat” because they banked with the UK arm of SVB.

One London-based venture capitalist said: “There is growing confidence that the UK government will step in with liquidity measures on Monday.”

The Bank of England moved to put the UK arm of SVB into insolvency late on Friday following the shutdown earlier in the day of the bank’s US entity, but said it had “a limited presence in the UK and no critical functions supporting the financial system”.

On Saturday around 210 start-up founders and leaders signed an open letter to Hunt, warning that “the majority of us as tech founders are running numbers to see if we are potentially technically insolvent”.

This is why I’m laughing at all the “this is not a big deal” / “it’s just some small bank in California” takes. This collapse will have an impact worldwide for months, potentially even years to come.

Yes. The people who think this is “just California” seem ignorant.

It will have an impact on tech companies who should have been smarter and in most cases serve no important societal purpose. In the US we have resolution procedures to unwind failed banks and fairly distribute assets. There is no guarantee for uninsured deposits. I assume UK has a similar structure. There’s zero reason to treat the tech companies any differently from what the law already prescribes. Tough luck.

Bad take. It’s going to hit nearly everyone’s retirement accounts, for a start.

Can someone explain to me why this is a rational argument for the continuation of allowing these institutions to get in these precarious situations to begin with and then we use taxpayer money or government money to essentially bail them out or stop the bleeding and then they know that they can do these risky things again over and over and over again I mean it's a pattern of behavior at this point.
And it doesn't seem like most Americans really care that much about it as long as they're not losing from their retirement correct like it's not a they are seen it taken from them directly.

This isn’t a “bailout” that’s happening with SVB. A “bailout” means that the public shareholders and debt investors would be compensated by the government. That’s not happening with SVB.

The government needs to step in and make whole all depositors. Why? Because it will cause people - like my Boomer parents - to pull the excess $100K out of their current bank account to try to deposit it somewhere else. That would start a wide scale run on banks of all sizes. The government won’t be able to fix that situation and it’s basically financial Armageddon.

Making depositors whole isn’t a bailout.

Maybe but making a bunch of wealthy tech companies and VC depositors whole by giving them $20B from Federal coffers because they did not perform due diligence corporate treasury work sure looks REALLY shady.

The only people who will run to move money will be those who have assets in cash accounts about FDIC limit — and guess what, they are moving their money no matter WHAT happens — remember last time they bailed out Bear Sterns, and then the next bank fail (Lehman) so precedent is weak.

Are you saying your boomers parents have more $500k in a single bank? Otherwise they won’t care, because all FDIC insured accounts will be fine.

A run on the banks by over $250k corp accounts is happening Monday no matter what happens. No one wants to risk that their bank will be the Lehman.

And it should happen; as corporations they should be managing this risk themselves, such as purchasing short term T-bills etc or have brokered cash accounts.

DP. It wouldn’t all be from federal coffers. There are probably buyers for SVB — they have a lot of assets — the question is the losses and how to handle them.

There are a LOT of ordinary people with accounts over $250,000, many of them Boomers who are risk adverse. If they see early Monday morning that depositors are safe (probably through some combination of federal funds and a private buyer), they may not spook the same way. But if communication is unclear, if the depositors are a total loss, then by the end of the week we could be in a very, very different world.

A boomer couple has a limit of $500k, right?

Honestly, if they are risk adverse and have a bunch of cash tied up in one bank, they should move their money.

I just doubt there are that many in cash for that amount.

You get $250K each for checking and savings accounts. And you get it per person in the case of a joint account. So a boomer couple with joint checking and savings accounts at one bank would get $1m in FDIC insurance for their personal banking. Business accounts get separate deposit insurance.

I don’t think this is completely correct. It is true that a couple can have $1 mil in FDIC insured deposits at any bank. It doesn’t matter if it is a checking or savings account or CD. The way to do it is to have 250 in individual accounts of each spouse and 500 in joint accounts

A joint account (checking, savings, CD, etc) can get up to $500K in FDIC insurance - $250 per person.

So if you have a joint checking and a joint savings account, that’s $1m in insured funds rights there.

https://www.fdic.gov/resources/deposit-insurance/brochures/deposits-at-a-glance/#:~:text=The%20standard%20insurance%20amount%20is,in%20different%20account%20ownership%20categories.

“FDIC Deposit Insurance Coverage Limits by Account Ownership Category

Joint Accounts (Owned by Two or More Persons) - $250,000 per account owner”

You misunderstand. Please don’t confuse the rest. It doesn’t matter what kind of deposit accounts you have, it is the ownership status that matters. If you have 250 in individual savings and 100 in individual checking under your name, you have 100 in uninsured deposits

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:UK authorities are scrambling.

https://www.ft.com/content/258d0732-d37b-49d6-8de8-b230a6568965

Likely behind a paywall for most. Some snippets:


UK chancellor Jeremy Hunt was on Saturday locked in talks over how to stop the collapse of Silicon Valley Bank from dealing a heavy blow to Britain’s tech sector.

More than 200 UK-based tech company executives have urged Downing Street to step in, warning that many companies faced an “existential threat” because they banked with the UK arm of SVB.

One London-based venture capitalist said: “There is growing confidence that the UK government will step in with liquidity measures on Monday.”

The Bank of England moved to put the UK arm of SVB into insolvency late on Friday following the shutdown earlier in the day of the bank’s US entity, but said it had “a limited presence in the UK and no critical functions supporting the financial system”.

On Saturday around 210 start-up founders and leaders signed an open letter to Hunt, warning that “the majority of us as tech founders are running numbers to see if we are potentially technically insolvent”.

This is why I’m laughing at all the “this is not a big deal” / “it’s just some small bank in California” takes. This collapse will have an impact worldwide for months, potentially even years to come.

Yes. The people who think this is “just California” seem ignorant.

It will have an impact on tech companies who should have been smarter and in most cases serve no important societal purpose. In the US we have resolution procedures to unwind failed banks and fairly distribute assets. There is no guarantee for uninsured deposits. I assume UK has a similar structure. There’s zero reason to treat the tech companies any differently from what the law already prescribes. Tough luck.

Bad take. It’s going to hit nearly everyone’s retirement accounts, for a start.

Can someone explain to me why this is a rational argument for the continuation of allowing these institutions to get in these precarious situations to begin with and then we use taxpayer money or government money to essentially bail them out or stop the bleeding and then they know that they can do these risky things again over and over and over again I mean it's a pattern of behavior at this point.
And it doesn't seem like most Americans really care that much about it as long as they're not losing from their retirement correct like it's not a they are seen it taken from them directly.

This isn’t a “bailout” that’s happening with SVB. A “bailout” means that the public shareholders and debt investors would be compensated by the government. That’s not happening with SVB.

The government needs to step in and make whole all depositors. Why? Because it will cause people - like my Boomer parents - to pull the excess $100K out of their current bank account to try to deposit it somewhere else. That would start a wide scale run on banks of all sizes. The government won’t be able to fix that situation and it’s basically financial Armageddon.

Making depositors whole isn’t a bailout.

Maybe but making a bunch of wealthy tech companies and VC depositors whole by giving them $20B from Federal coffers because they did not perform due diligence corporate treasury work sure looks REALLY shady.

The only people who will run to move money will be those who have assets in cash accounts about FDIC limit — and guess what, they are moving their money no matter WHAT happens — remember last time they bailed out Bear Sterns, and then the next bank fail (Lehman) so precedent is weak.

Are you saying your boomers parents have more $500k in a single bank? Otherwise they won’t care, because all FDIC insured accounts will be fine.

A run on the banks by over $250k corp accounts is happening Monday no matter what happens. No one wants to risk that their bank will be the Lehman.

And it should happen; as corporations they should be managing this risk themselves, such as purchasing short term T-bills etc or have brokered cash accounts.

DP. It wouldn’t all be from federal coffers. There are probably buyers for SVB — they have a lot of assets — the question is the losses and how to handle them.

There are a LOT of ordinary people with accounts over $250,000, many of them Boomers who are risk adverse. If they see early Monday morning that depositors are safe (probably through some combination of federal funds and a private buyer), they may not spook the same way. But if communication is unclear, if the depositors are a total loss, then by the end of the week we could be in a very, very different world.

This is stupid. If you are smart enough to accumulate over $250k in cash you should be smart enough to understand what FDIC insurance means already.

Well yes, this is what the short sellers are arguing on Twitter. They are salivating at the thought of cascading bank runs this week as equity values plunge, while Everyday Americans hold the bag.

Frankly, I find this mentality of wanting to destroy the banking system a lot more disturbing than the “moral hazard” of bailing in depositors.

Hopefully the Fed and FDIC shut down this nonsense tomorrow and drive a stake through the heart of the short sellers.

Right so banks get to do whatever they want then cry “the banking system will be destroyed if you don’t save us!” then wait a decent amount of time before they start lobbying against financial reform again.

Tell me again about the moral hazard of forgiving student loans?

I’m not that PP but I am in favor of forgiving student loans. I also think the baying to have the largely small businesses that were SVBs customer base destroyed and then cascading a 1929-style catastrophic banking failure through the entire country to be profoundly stupid.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:UK authorities are scrambling.

https://www.ft.com/content/258d0732-d37b-49d6-8de8-b230a6568965

Likely behind a paywall for most. Some snippets:


UK chancellor Jeremy Hunt was on Saturday locked in talks over how to stop the collapse of Silicon Valley Bank from dealing a heavy blow to Britain’s tech sector.

More than 200 UK-based tech company executives have urged Downing Street to step in, warning that many companies faced an “existential threat” because they banked with the UK arm of SVB.

One London-based venture capitalist said: “There is growing confidence that the UK government will step in with liquidity measures on Monday.”

The Bank of England moved to put the UK arm of SVB into insolvency late on Friday following the shutdown earlier in the day of the bank’s US entity, but said it had “a limited presence in the UK and no critical functions supporting the financial system”.

On Saturday around 210 start-up founders and leaders signed an open letter to Hunt, warning that “the majority of us as tech founders are running numbers to see if we are potentially technically insolvent”.

This is why I’m laughing at all the “this is not a big deal” / “it’s just some small bank in California” takes. This collapse will have an impact worldwide for months, potentially even years to come.

Yes. The people who think this is “just California” seem ignorant.

It will have an impact on tech companies who should have been smarter and in most cases serve no important societal purpose. In the US we have resolution procedures to unwind failed banks and fairly distribute assets. There is no guarantee for uninsured deposits. I assume UK has a similar structure. There’s zero reason to treat the tech companies any differently from what the law already prescribes. Tough luck.

Bad take. It’s going to hit nearly everyone’s retirement accounts, for a start.

Can someone explain to me why this is a rational argument for the continuation of allowing these institutions to get in these precarious situations to begin with and then we use taxpayer money or government money to essentially bail them out or stop the bleeding and then they know that they can do these risky things again over and over and over again I mean it's a pattern of behavior at this point.
And it doesn't seem like most Americans really care that much about it as long as they're not losing from their retirement correct like it's not a they are seen it taken from them directly.

This isn’t a “bailout” that’s happening with SVB. A “bailout” means that the public shareholders and debt investors would be compensated by the government. That’s not happening with SVB.

The government needs to step in and make whole all depositors. Why? Because it will cause people - like my Boomer parents - to pull the excess $100K out of their current bank account to try to deposit it somewhere else. That would start a wide scale run on banks of all sizes. The government won’t be able to fix that situation and it’s basically financial Armageddon.

Making depositors whole isn’t a bailout.

Maybe but making a bunch of wealthy tech companies and VC depositors whole by giving them $20B from Federal coffers because they did not perform due diligence corporate treasury work sure looks REALLY shady.

The only people who will run to move money will be those who have assets in cash accounts about FDIC limit — and guess what, they are moving their money no matter WHAT happens — remember last time they bailed out Bear Sterns, and then the next bank fail (Lehman) so precedent is weak.

Are you saying your boomers parents have more $500k in a single bank? Otherwise they won’t care, because all FDIC insured accounts will be fine.

A run on the banks by over $250k corp accounts is happening Monday no matter what happens. No one wants to risk that their bank will be the Lehman.

And it should happen; as corporations they should be managing this risk themselves, such as purchasing short term T-bills etc or have brokered cash accounts.

DP. It wouldn’t all be from federal coffers. There are probably buyers for SVB — they have a lot of assets — the question is the losses and how to handle them.

There are a LOT of ordinary people with accounts over $250,000, many of them Boomers who are risk adverse. If they see early Monday morning that depositors are safe (probably through some combination of federal funds and a private buyer), they may not spook the same way. But if communication is unclear, if the depositors are a total loss, then by the end of the week we could be in a very, very different world.

This is stupid. If you are smart enough to accumulate over $250k in cash you should be smart enough to understand what FDIC insurance means already.

Well yes, this is what the short sellers are arguing on Twitter. They are salivating at the thought of cascading bank runs this week as equity values plunge, while Everyday Americans hold the bag.

Frankly, I find this mentality of wanting to destroy the banking system a lot more disturbing than the “moral hazard” of bailing in depositors.

Hopefully the Fed and FDIC shut down this nonsense tomorrow and drive a stake through the heart of the short sellers.

Right so banks get to do whatever they want then cry “the banking system will be destroyed if you don’t save us!” then wait a decent amount of time before they start lobbying against financial reform again.

Tell me again about the moral hazard of forgiving student loans?

I’m not that PP but I am in favor of forgiving student loans. I also think the baying to have the largely small businesses that were SVBs customer base destroyed and then cascading a 1929-style catastrophic banking failure through the entire country to be profoundly stupid.

OK then you'll agree that the profound stupidity originated with the exemption of "small banks" from reasonable regulation. Nobody is "baying" to have the small businesses suffered. We ARE baying to have those responsible held accountable. I hope the execs get every bit of their pay and bonus clawed back.

[Anonymous]

Good video on the situation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:UK authorities are scrambling.

https://www.ft.com/content/258d0732-d37b-49d6-8de8-b230a6568965

Likely behind a paywall for most. Some snippets:


UK chancellor Jeremy Hunt was on Saturday locked in talks over how to stop the collapse of Silicon Valley Bank from dealing a heavy blow to Britain’s tech sector.

More than 200 UK-based tech company executives have urged Downing Street to step in, warning that many companies faced an “existential threat” because they banked with the UK arm of SVB.

One London-based venture capitalist said: “There is growing confidence that the UK government will step in with liquidity measures on Monday.”

The Bank of England moved to put the UK arm of SVB into insolvency late on Friday following the shutdown earlier in the day of the bank’s US entity, but said it had “a limited presence in the UK and no critical functions supporting the financial system”.

On Saturday around 210 start-up founders and leaders signed an open letter to Hunt, warning that “the majority of us as tech founders are running numbers to see if we are potentially technically insolvent”.

This is why I’m laughing at all the “this is not a big deal” / “it’s just some small bank in California” takes. This collapse will have an impact worldwide for months, potentially even years to come.

Yes. The people who think this is “just California” seem ignorant.

It will have an impact on tech companies who should have been smarter and in most cases serve no important societal purpose. In the US we have resolution procedures to unwind failed banks and fairly distribute assets. There is no guarantee for uninsured deposits. I assume UK has a similar structure. There’s zero reason to treat the tech companies any differently from what the law already prescribes. Tough luck.

Bad take. It’s going to hit nearly everyone’s retirement accounts, for a start.

Can someone explain to me why this is a rational argument for the continuation of allowing these institutions to get in these precarious situations to begin with and then we use taxpayer money or government money to essentially bail them out or stop the bleeding and then they know that they can do these risky things again over and over and over again I mean it's a pattern of behavior at this point.
And it doesn't seem like most Americans really care that much about it as long as they're not losing from their retirement correct like it's not a they are seen it taken from them directly.

This isn’t a “bailout” that’s happening with SVB. A “bailout” means that the public shareholders and debt investors would be compensated by the government. That’s not happening with SVB.

The government needs to step in and make whole all depositors. Why? Because it will cause people - like my Boomer parents - to pull the excess $100K out of their current bank account to try to deposit it somewhere else. That would start a wide scale run on banks of all sizes. The government won’t be able to fix that situation and it’s basically financial Armageddon.

Making depositors whole isn’t a bailout.

Maybe but making a bunch of wealthy tech companies and VC depositors whole by giving them $20B from Federal coffers because they did not perform due diligence corporate treasury work sure looks REALLY shady.

The only people who will run to move money will be those who have assets in cash accounts about FDIC limit — and guess what, they are moving their money no matter WHAT happens — remember last time they bailed out Bear Sterns, and then the next bank fail (Lehman) so precedent is weak.

Are you saying your boomers parents have more $500k in a single bank? Otherwise they won’t care, because all FDIC insured accounts will be fine.

A run on the banks by over $250k corp accounts is happening Monday no matter what happens. No one wants to risk that their bank will be the Lehman.

And it should happen; as corporations they should be managing this risk themselves, such as purchasing short term T-bills etc or have brokered cash accounts.

DP. It wouldn’t all be from federal coffers. There are probably buyers for SVB — they have a lot of assets — the question is the losses and how to handle them.

There are a LOT of ordinary people with accounts over $250,000, many of them Boomers who are risk adverse. If they see early Monday morning that depositors are safe (probably through some combination of federal funds and a private buyer), they may not spook the same way. But if communication is unclear, if the depositors are a total loss, then by the end of the week we could be in a very, very different world.

This is stupid. If you are smart enough to accumulate over $250k in cash you should be smart enough to understand what FDIC insurance means already.

Well yes, this is what the short sellers are arguing on Twitter. They are salivating at the thought of cascading bank runs this week as equity values plunge, while Everyday Americans hold the bag.

Frankly, I find this mentality of wanting to destroy the banking system a lot more disturbing than the “moral hazard” of bailing in depositors.

Hopefully the Fed and FDIC shut down this nonsense tomorrow and drive a stake through the heart of the short sellers.

Right so banks get to do whatever they want then cry “the banking system will be destroyed if you don’t save us!” then wait a decent amount of time before they start lobbying against financial reform again.

Tell me again about the moral hazard of forgiving student loans?

I’m not that PP but I am in favor of forgiving student loans. I also think the baying to have the largely small businesses that were SVBs customer base destroyed and then cascading a 1929-style catastrophic banking failure through the entire country to be profoundly stupid.

OK then you'll agree that the profound stupidity originated with the exemption of "small banks" from reasonable regulation. Nobody is "baying" to have the small businesses suffered. We ARE baying to have those responsible held accountable. I hope the execs get every bit of their pay and bonus clawed back.

Clawbacks won't mean much in terms of the amount. But I am all for it.

[Anonymous]

No one is advocating for bailing out shareholders or SVB executives. Depositors, who deposited their cash in good faith, need access to their operating accounts tomorrow to meet payroll and pay their trade accounts. If they can’t access their cash deposits, Americans lose faith in the banking system, and there is a risk of contagion. How would everyone on here feel if your company’s operating accounts suddenly vanished and they can’t make your next paycheck? Most Americans rely on their next paycheck to eat, pay rent and keep the heat on.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:UK authorities are scrambling.

https://www.ft.com/content/258d0732-d37b-49d6-8de8-b230a6568965

Likely behind a paywall for most. Some snippets:


UK chancellor Jeremy Hunt was on Saturday locked in talks over how to stop the collapse of Silicon Valley Bank from dealing a heavy blow to Britain’s tech sector.

More than 200 UK-based tech company executives have urged Downing Street to step in, warning that many companies faced an “existential threat” because they banked with the UK arm of SVB.

One London-based venture capitalist said: “There is growing confidence that the UK government will step in with liquidity measures on Monday.”

The Bank of England moved to put the UK arm of SVB into insolvency late on Friday following the shutdown earlier in the day of the bank’s US entity, but said it had “a limited presence in the UK and no critical functions supporting the financial system”.

On Saturday around 210 start-up founders and leaders signed an open letter to Hunt, warning that “the majority of us as tech founders are running numbers to see if we are potentially technically insolvent”.

This is why I’m laughing at all the “this is not a big deal” / “it’s just some small bank in California” takes. This collapse will have an impact worldwide for months, potentially even years to come.

Yes. The people who think this is “just California” seem ignorant.

It will have an impact on tech companies who should have been smarter and in most cases serve no important societal purpose. In the US we have resolution procedures to unwind failed banks and fairly distribute assets. There is no guarantee for uninsured deposits. I assume UK has a similar structure. There’s zero reason to treat the tech companies any differently from what the law already prescribes. Tough luck.

Bad take. It’s going to hit nearly everyone’s retirement accounts, for a start.

Can someone explain to me why this is a rational argument for the continuation of allowing these institutions to get in these precarious situations to begin with and then we use taxpayer money or government money to essentially bail them out or stop the bleeding and then they know that they can do these risky things again over and over and over again I mean it's a pattern of behavior at this point.
And it doesn't seem like most Americans really care that much about it as long as they're not losing from their retirement correct like it's not a they are seen it taken from them directly.

This isn’t a “bailout” that’s happening with SVB. A “bailout” means that the public shareholders and debt investors would be compensated by the government. That’s not happening with SVB.

The government needs to step in and make whole all depositors. Why? Because it will cause people - like my Boomer parents - to pull the excess $100K out of their current bank account to try to deposit it somewhere else. That would start a wide scale run on banks of all sizes. The government won’t be able to fix that situation and it’s basically financial Armageddon.

Making depositors whole isn’t a bailout.

Maybe but making a bunch of wealthy tech companies and VC depositors whole by giving them $20B from Federal coffers because they did not perform due diligence corporate treasury work sure looks REALLY shady.

The only people who will run to move money will be those who have assets in cash accounts about FDIC limit — and guess what, they are moving their money no matter WHAT happens — remember last time they bailed out Bear Sterns, and then the next bank fail (Lehman) so precedent is weak.

Are you saying your boomers parents have more $500k in a single bank? Otherwise they won’t care, because all FDIC insured accounts will be fine.

A run on the banks by over $250k corp accounts is happening Monday no matter what happens. No one wants to risk that their bank will be the Lehman.

And it should happen; as corporations they should be managing this risk themselves, such as purchasing short term T-bills etc or have brokered cash accounts.

DP. It wouldn’t all be from federal coffers. There are probably buyers for SVB — they have a lot of assets — the question is the losses and how to handle them.

There are a LOT of ordinary people with accounts over $250,000, many of them Boomers who are risk adverse. If they see early Monday morning that depositors are safe (probably through some combination of federal funds and a private buyer), they may not spook the same way. But if communication is unclear, if the depositors are a total loss, then by the end of the week we could be in a very, very different world.

This is stupid. If you are smart enough to accumulate over $250k in cash you should be smart enough to understand what FDIC insurance means already.

Well yes, this is what the short sellers are arguing on Twitter. They are salivating at the thought of cascading bank runs this week as equity values plunge, while Everyday Americans hold the bag.

Frankly, I find this mentality of wanting to destroy the banking system a lot more disturbing than the “moral hazard” of bailing in depositors.

Hopefully the Fed and FDIC shut down this nonsense tomorrow and drive a stake through the heart of the short sellers.

Right so banks get to do whatever they want then cry “the banking system will be destroyed if you don’t save us!” then wait a decent amount of time before they start lobbying against financial reform again.

Tell me again about the moral hazard of forgiving student loans?

I’m not that PP but I am in favor of forgiving student loans. I also think the baying to have the largely small businesses that were SVBs customer base destroyed and then cascading a 1929-style catastrophic banking failure through the entire country to be profoundly stupid.

OK then you'll agree that the profound stupidity originated with the exemption of "small banks" from reasonable regulation. Nobody is "baying" to have the small businesses suffered. We ARE baying to have those responsible held accountable. I hope the execs get every bit of their pay and bonus clawed back.

Yes. I agree it was profoundly stupid to exempt small banks. But that doesn’t matter now.

And let’s be entirely clear: by baying for no bail-in for depositors (which is precisely what you are doing) you are clamoring for 1929-style small business and bank catastrophic failure. Your goal is systemic failure.

[Anonymous]

I don’t understand how people can support student loan forgiveness but not depositor protection. And vice versa.

[Anonymous]

Anonymous wrote:I don’t understand how people can support student loan forgiveness but not depositor protection. And vice versa.

Because normal depositors (under $250k) are already protected by insurance. Uninsured depositors over $250k already have a process to get priority access to assets. Totally different from students who are paying for something that should be free or as close to it as possible.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:UK authorities are scrambling.

https://www.ft.com/content/258d0732-d37b-49d6-8de8-b230a6568965

Likely behind a paywall for most. Some snippets:


UK chancellor Jeremy Hunt was on Saturday locked in talks over how to stop the collapse of Silicon Valley Bank from dealing a heavy blow to Britain’s tech sector.

More than 200 UK-based tech company executives have urged Downing Street to step in, warning that many companies faced an “existential threat” because they banked with the UK arm of SVB.

One London-based venture capitalist said: “There is growing confidence that the UK government will step in with liquidity measures on Monday.”

The Bank of England moved to put the UK arm of SVB into insolvency late on Friday following the shutdown earlier in the day of the bank’s US entity, but said it had “a limited presence in the UK and no critical functions supporting the financial system”.

On Saturday around 210 start-up founders and leaders signed an open letter to Hunt, warning that “the majority of us as tech founders are running numbers to see if we are potentially technically insolvent”.

This is why I’m laughing at all the “this is not a big deal” / “it’s just some small bank in California” takes. This collapse will have an impact worldwide for months, potentially even years to come.

Yes. The people who think this is “just California” seem ignorant.

It will have an impact on tech companies who should have been smarter and in most cases serve no important societal purpose. In the US we have resolution procedures to unwind failed banks and fairly distribute assets. There is no guarantee for uninsured deposits. I assume UK has a similar structure. There’s zero reason to treat the tech companies any differently from what the law already prescribes. Tough luck.

Bad take. It’s going to hit nearly everyone’s retirement accounts, for a start.

Can someone explain to me why this is a rational argument for the continuation of allowing these institutions to get in these precarious situations to begin with and then we use taxpayer money or government money to essentially bail them out or stop the bleeding and then they know that they can do these risky things again over and over and over again I mean it's a pattern of behavior at this point.
And it doesn't seem like most Americans really care that much about it as long as they're not losing from their retirement correct like it's not a they are seen it taken from them directly.

This isn’t a “bailout” that’s happening with SVB. A “bailout” means that the public shareholders and debt investors would be compensated by the government. That’s not happening with SVB.

The government needs to step in and make whole all depositors. Why? Because it will cause people - like my Boomer parents - to pull the excess $100K out of their current bank account to try to deposit it somewhere else. That would start a wide scale run on banks of all sizes. The government won’t be able to fix that situation and it’s basically financial Armageddon.

Making depositors whole isn’t a bailout.

Maybe but making a bunch of wealthy tech companies and VC depositors whole by giving them $20B from Federal coffers because they did not perform due diligence corporate treasury work sure looks REALLY shady.

The only people who will run to move money will be those who have assets in cash accounts about FDIC limit — and guess what, they are moving their money no matter WHAT happens — remember last time they bailed out Bear Sterns, and then the next bank fail (Lehman) so precedent is weak.

Are you saying your boomers parents have more $500k in a single bank? Otherwise they won’t care, because all FDIC insured accounts will be fine.

A run on the banks by over $250k corp accounts is happening Monday no matter what happens. No one wants to risk that their bank will be the Lehman.

And it should happen; as corporations they should be managing this risk themselves, such as purchasing short term T-bills etc or have brokered cash accounts.

DP. It wouldn’t all be from federal coffers. There are probably buyers for SVB — they have a lot of assets — the question is the losses and how to handle them.

There are a LOT of ordinary people with accounts over $250,000, many of them Boomers who are risk adverse. If they see early Monday morning that depositors are safe (probably through some combination of federal funds and a private buyer), they may not spook the same way. But if communication is unclear, if the depositors are a total loss, then by the end of the week we could be in a very, very different world.

This is stupid. If you are smart enough to accumulate over $250k in cash you should be smart enough to understand what FDIC insurance means already.

Well yes, this is what the short sellers are arguing on Twitter. They are salivating at the thought of cascading bank runs this week as equity values plunge, while Everyday Americans hold the bag.

Frankly, I find this mentality of wanting to destroy the banking system a lot more disturbing than the “moral hazard” of bailing in depositors.

Hopefully the Fed and FDIC shut down this nonsense tomorrow and drive a stake through the heart of the short sellers.

Right so banks get to do whatever they want then cry “the banking system will be destroyed if you don’t save us!” then wait a decent amount of time before they start lobbying against financial reform again.

Tell me again about the moral hazard of forgiving student loans?

I’m not that PP but I am in favor of forgiving student loans. I also think the baying to have the largely small businesses that were SVBs customer base destroyed and then cascading a 1929-style catastrophic banking failure through the entire country to be profoundly stupid.

OK then you'll agree that the profound stupidity originated with the exemption of "small banks" from reasonable regulation. Nobody is "baying" to have the small businesses suffered. We ARE baying to have those responsible held accountable. I hope the execs get every bit of their pay and bonus clawed back.

Yes. I agree it was profoundly stupid to exempt small banks. But that doesn’t matter now.

And let’s be entirely clear: by baying for no bail-in for depositors (which is precisely what you are doing) you are clamoring for 1929-style small business and bank catastrophic failure. Your goal is systemic failure. [/quote

I'm "baying" for everything to unwind as it's supposed to. You're the one creating the panic by shouting about "systemic failure." So you should stop.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don’t understand how people can support student loan forgiveness but not depositor protection. And vice versa.

Because normal depositors (under $250k) are already protected by insurance. Uninsured depositors over $250k already have a process to get priority access to assets. Totally different from students who are paying for something that should be free or as close to it as possible.

Getting a law degree should be free or MBA? Graduate students own half of student loan debt. For undergrads, there are tons of options already to get college education cheaply.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Anyone notice how the NYTimes has majorly subdued its coverage today? They probably got a call from Yellen.

WaPo, WSJ, The Trib and LA Times, too? They all have one article on the front pages of their apps. It's because no new news has happened. What else is there to say at this point?

Yeah. It's a Sunday. Not much is taking place on this over the weekend (at least publicly)

[Anonymous]

Anonymous wrote:No one is advocating for bailing out shareholders or SVB executives. Depositors, who deposited their cash in good faith, need access to their operating accounts tomorrow to meet payroll and pay their trade accounts. If they can’t access their cash deposits, Americans lose faith in the banking system, and there is a risk of contagion. How would everyone on here feel if your company’s operating accounts suddenly vanished and they can’t make your next paycheck? Most Americans rely on their next paycheck to eat, pay rent and keep the heat on.

SVB account holders will have access to $250k starting tomorrow. FDIC insurance works.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No one is advocating for bailing out shareholders or SVB executives. Depositors, who deposited their cash in good faith, need access to their operating accounts tomorrow to meet payroll and pay their trade accounts. If they can’t access their cash deposits, Americans lose faith in the banking system, and there is a risk of contagion. How would everyone on here feel if your company’s operating accounts suddenly vanished and they can’t make your next paycheck? Most Americans rely on their next paycheck to eat, pay rent and keep the heat on.

SVB account holders will have access to $250k starting tomorrow. FDIC insurance works.

Lol. SVB is not a consumer bank. $250k for a business? That won’t get many through even their next payroll. They need access to their operating accounts.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No one is advocating for bailing out shareholders or SVB executives. Depositors, who deposited their cash in good faith, need access to their operating accounts tomorrow to meet payroll and pay their trade accounts. If they can’t access their cash deposits, Americans lose faith in the banking system, and there is a risk of contagion. How would everyone on here feel if your company’s operating accounts suddenly vanished and they can’t make your next paycheck? Most Americans rely on their next paycheck to eat, pay rent and keep the heat on.

SVB account holders will have access to $250k starting tomorrow. FDIC insurance works.

Lol. SVB is not a consumer bank. $250k for a business? That won’t get many through even their next payroll. They need access to their operating accounts.

Right. That 250k will barely cover a few employees paychecks.