SVB Bank Run: Fed Calling Emergency Meeting

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:First Republic stock is down 75% in a day and has been halted.

Western Alliance's down 84%, while PacWest Bancorp and Zions Bank Corporation has declined more than 40%. Regional banks are getting hammered over concerns of a contagion.

This ain't over.

It’s not contagion. It’s the very rationale realization that these equities were grossly overvalued last week in light of these banks’ large unrealized losses. They won’t go bust, but they will only eek out meager profits as they wait for their UST and MBS portfolios to run off.

Lol. Losing 85% in total market cap overnight is way more than just a correction due to being overvalued. It is literally speculation that First Republic and Western Alliance are now in trouble too. If they go kaput, it means contagion because that will be 4 banks going under.

Shorts are doubling and tripling down to try to spook depositors. These banks have much stickier retail deposits than SVB. The average uninsured SVB account held $4.3M….that’s insane. Anyways, the Fed’s liquidity backstop makes the deposit run pretty moot at this point (at least for the next year).

You can drive the equity price of First Republic down to $1 and it will still be able to operate as a boring bank and remain well capitalized. Bank capital is based on the “paid in” amount, not the market value.

+1

So much of this is right wing billionaires trying to take down the US economy and prop up crypto.

Crypto up nearly 20% in the last 36 hours. You can see the play happening in real time.

Which both hilarious and ironic when you consider what happened to SVB account holders and what happened to FTX/Celsius/Voyager account holders

Signature Bank had $16.5B in crypto deposits and those depositors are being made whole; it’s not a good set of incentives. Crypto is a bit of a religion right now, so we are seeing some mistaken “flight to safety” to BTC and ETH by the libertarian tech bros who fled SVB.

Signature also has an issue with unrealized losses, but much of it stems from the crypto fallout. It’s not the same fact pattern as SVB.

My prediction is that Fed/OCC/FDIC will purge crypto deposits from the insured banking system. It has to happen.

[Anonymous]

Problem averted unless you are a bond holder or investor in the bank itself, in which case, so what?

Your retirement and mine are owners of these bonds. Keep thinking all is well when it isnt.

[Anonymous]

It's disgusting that we are giving yet another bailout to rich people who constantly tell us there are winners and losers in capitalism.

[Anonymous]

Anonymous wrote:

Problem averted unless you are a bond holder or investor in the bank itself, in which case, so what?

Your retirement and mine are owners of these bonds. Keep thinking all is well when it isnt.

You're pension is overweighted on SVB bonds?

[Anonymous]

Anonymous wrote:It's disgusting that we are giving yet another bailout to rich people who constantly tell us there are winners and losers in capitalism.

All animals are equal, but some animals are more equal than others.

[Anonymous]

Anonymous wrote:

Problem averted unless you are a bond holder or investor in the bank itself, in which case, so what?

Your retirement and mine are owners of these bonds. Keep thinking all is well when it isnt.

Bond funds typically have hundreds if not thousands of holdings. One company defaulting on their debt is literally less than a blip. Diversifying risk and accepting that some percentage of holdings will default each year is literally why bond funds exist.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:First Republic stock is down 75% in a day and has been halted.

Western Alliance's down 84%, while PacWest Bancorp and Zions Bank Corporation has declined more than 40%. Regional banks are getting hammered over concerns of a contagion.

This ain't over.

It’s not contagion. It’s the very rationale realization that these equities were grossly overvalued last week in light of these banks’ large unrealized losses. They won’t go bust, but they will only eek out meager profits as they wait for their UST and MBS portfolios to run off.

Lol. Losing 85% in total market cap overnight is way more than just a correction due to being overvalued. It is literally speculation that First Republic and Western Alliance are now in trouble too. If they go kaput, it means contagion because that will be 4 banks going under.

Shorts are doubling and tripling down to try to spook depositors. These banks have much stickier retail deposits than SVB. The average uninsured SVB account held $4.3M….that’s insane. Anyways, the Fed’s liquidity backstop makes the deposit run pretty moot at this point (at least for the next year).

You can drive the equity price of First Republic down to $1 and it will still be able to operate as a boring bank and remain well capitalized. Bank capital is based on the “paid in” amount, not the market value.

+1

So much of this is right wing billionaires trying to take down the US economy and prop up crypto.

Crypto up nearly 20% in the last 36 hours. You can see the play happening in real time.

Which both hilarious and ironic when you consider what happened to SVB account holders and what happened to FTX/Celsius/Voyager account holders

Signature Bank had $16.5B in crypto deposits and those depositors are being made whole; it’s not a good set of incentives. Crypto is a bit of a religion right now, so we are seeing some mistaken “flight to safety” to BTC and ETH by the libertarian tech bros who fled SVB.

Signature also has an issue with unrealized losses, but much of it stems from the crypto fallout. It’s not the same fact pattern as SVB.

My prediction is that Fed/OCC/FDIC will purge crypto deposits from the insured banking system. It has to happen.

100% agree

[Anonymous]

Anonymous wrote:First Republic stock is down 75% in a day and has been halted.

Western Alliance's down 84%, while PacWest Bancorp and Zions Bank Corporation has declined more than 40%. Regional banks are getting hammered over concerns of a contagion.

This ain't over.

Stock price =/= liquidity of said bank

[Anonymous]

[Anonymous]

Anonymous wrote:

How about the CEO who sold millions in SVB stock prior to the melt down?

[Anonymous]

LOL.

[Anonymous]

No one wants SVB bonds (government) when they are pricier than other bonds due to more government interference.

[Anonymous]

Anonymous wrote:

Problem averted unless you are a bond holder or investor in the bank itself, in which case, so what?

Your retirement and mine are owners of these bonds. Keep thinking all is well when it isnt.

I highly doubt there are many retirement funds invested in a crypto based bank that fronts VC money for start ups.

If MY retirement funds invested in it, I would find new funds.

[Anonymous]

The taxpayers will ultimately backstop these bad bonds owned by banks without proper hedging protocol

[Anonymous]

Anonymous wrote:The taxpayers will ultimately backstop these bad bonds owned by banks without proper hedging protocol

Uh, only if the fed turns around and tries to sell the bond on the open market. If they just hold it to duration (which they almost certainly will), then they haven't lost anything.