SVB Bank Run: Fed Calling Emergency Meeting

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Is he going to exempt his MO depositors from their risk and bailout, too?

That's not how a country works, bro.

A week ago, it was exactly how the country worked.

That one state opted out of federal banking protection? Hasn't worked like that for a long time.

The one where the FDIC had a 250k cap

Read about the “systemic risk exception”

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Is he going to exempt his MO depositors from their risk and bailout, too?

That's not how a country works, bro.

A week ago, it was exactly how the country worked.

That one state opted out of federal banking protection? Hasn't worked like that for a long time.

The one where the FDIC had a 250k cap

Read about the “systemic risk exception”

OK, what about Signature bank? If every potential bank failure now systematic?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

He’s such a dumb piece of sh#t.

He’s a POS but not a dumb one. The fact that he’s too smart to actually believe this stuff makes him more offensive.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Is he going to exempt his MO depositors from their risk and bailout, too?

That's not how a country works, bro.

A week ago, it was exactly how the country worked.

That one state opted out of federal banking protection? Hasn't worked like that for a long time.

The one where the FDIC had a 250k cap

Read about the “systemic risk exception”

OK, what about Signature bank? If every potential bank failure now systematic?

DP

[Anonymous]

Anonymous wrote:

If they just hold it to duration (which they almost certainly will), then they haven't lost anything.

The mark to market applies even at the end of the duration. The value of that bond could be valued at 80 cents on the dollar and the taxpayers will pay the difference.

You don't have a clue what you're talking about.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Is he going to exempt his MO depositors from their risk and bailout, too?

That's not how a country works, bro.

A week ago, it was exactly how the country worked.

That one state opted out of federal banking protection? Hasn't worked like that for a long time.

The one where the FDIC had a 250k cap

Read about the “systemic risk exception”

OK, what about Signature bank? If every potential bank failure now systematic?

DP

Sure, but that's one bank and we historically let banks fail. FDIC has now implied that every deposit is covered by insurance. That's a very different place than we were prior to SVB collapsing

[Anonymous]

Anonymous wrote:

Anonymous wrote:

If they just hold it to duration (which they almost certainly will), then they haven't lost anything.

The mark to market applies even at the end of the duration. The value of that bond could be valued at 80 cents on the dollar and the taxpayers will pay the difference.

Um, Treasuries pay out their full face value at maturity.

+1000. Why do people who have no idea what they are talking about insist on posting drivel?

[Anonymous]

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

Massie is correct here.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Is he going to exempt his MO depositors from their risk and bailout, too?

That's not how a country works, bro.

A week ago, it was exactly how the country worked.

That one state opted out of federal banking protection? Hasn't worked like that for a long time.

The one where the FDIC had a 250k cap

Read about the “systemic risk exception”

OK, what about Signature bank? If every potential bank failure now systematic?

DP

Sure, but that's one bank and we historically let banks fail. FDIC has now implied that every deposit is covered by insurance. That's a very different place than we were prior to SVB collapsing

SVB is being allowed to fail. Historically, the FDIC took over a failed bank on a Friday and sold it to another bank over the weekend, and all the depositors were made whole with the FDIC kicking in no or very minimal money into the deal. That's how it worked in every single case up until 2008 when the banks were too big and too many for this method to work.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Is he going to exempt his MO depositors from their risk and bailout, too?

That's not how a country works, bro.

A week ago, it was exactly how the country worked.

That one state opted out of federal banking protection? Hasn't worked like that for a long time.

The one where the FDIC had a 250k cap

Read about the “systemic risk exception”

OK, what about Signature bank? If every potential bank failure now systematic?

Part of this is to mitigate the Crypto threat.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

Exactly.

It is amazing the legnths the right is going to right now to cause misinformation and uncertainty in our financial markets.

It's like they want a crash to hurt Biden.

While there’s clearly right-wing noise (and a few folks yelling ‘fire’), fact is that they were going to be taking loses on long-dated assets regardless. HTM was never a viable path out of this, at least absent lower rates.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

If they just hold it to duration (which they almost certainly will), then they haven't lost anything.

The mark to market applies even at the end of the duration. The value of that bond could be valued at 80 cents on the dollar and the taxpayers will pay the difference.

Um, Treasuries pay out their full face value at maturity.

+1000. Why do people who have no idea what they are talking about insist on posting drivel?

A few of you need to figure out how rates impacts value. Getting your nominal principal back in a decade or three ain’t what it used to be.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

Exactly.

It is amazing the legnths the right is going to right now to cause misinformation and uncertainty in our financial markets.

It's like they want a crash to hurt Biden.

While there’s clearly right-wing noise (and a few folks yelling ‘fire’), fact is that they were going to be taking loses on long-dated assets regardless. HTM was never a viable path out of this, at least absent lower rates.

I still don’t understand SVB’s strategy. They had a robust corporate treasury….wtf were they thinking? Everyone knew the Fed was about to embark on a long journey of interest rate hikes and SVB decided to load up on long dated assets after 3x their deposits in 18 months. They didn’t even try to hedge their interest rate risk with derivatives.

It like they did all of this on purpose. I still can’t figure it out.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

If they just hold it to duration (which they almost certainly will), then they haven't lost anything.

The mark to market applies even at the end of the duration. The value of that bond could be valued at 80 cents on the dollar and the taxpayers will pay the difference.

Um, Treasuries pay out their full face value at maturity.

+1000. Why do people who have no idea what they are talking about insist on posting drivel?

A few of you need to figure out how rates impacts value. Getting your nominal principal back in a decade or three ain’t what it used to be.

Average duration of SVB’s portfolio was around 5-6 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

Exactly.

It is amazing the legnths the right is going to right now to cause misinformation and uncertainty in our financial markets.

It's like they want a crash to hurt Biden.

While there’s clearly right-wing noise (and a few folks yelling ‘fire’), fact is that they were going to be taking loses on long-dated assets regardless. HTM was never a viable path out of this, at least absent lower rates.

I still don’t understand SVB’s strategy. They had a robust corporate treasury….wtf were they thinking? Everyone knew the Fed was about to embark on a long journey of interest rate hikes and SVB decided to load up on long dated assets after 3x their deposits in 18 months. They didn’t even try to hedge their interest rate risk with derivatives.

It like they did all of this on purpose. I still can’t figure it out.

They got a massive influx of deposits in 2020 during ZIRP and thanks to ZIRP. They turned around and put those deposits into treasuries at one of the worst times possible. There are almost 4,500 FDIC insured banks; I'm be shocked if some of them didn't make terrible risk management decisions from time to time. This one likely would have flown under the radar if SVB was just a normal community bank, but once VC funds told their companies to pull out, it was over