SVB Bank Run: Fed Calling Emergency Meeting

[Anonymous]

Anonymous wrote:Anyone notice that SVB *did* seem to have meaningful credit losses? I’m not sure why, but CRE sounds likely.

From year end financials, their loan book was unusual.

$66 billion in total loans. $1 billion in what looks like vineyard loans. About $10 billion in residential mortgages; about $14 billion in commercial real estate. $17 billion in loans to companies.

The surprise item is loans for purchasing or carrying securities (which can simply be loans for any purposes that are heavily collateralized with securities): $34 billion. Very unusual to over half your loan book in this type of loan but likely part of their business model. Collect deposits from tech entrepreneurs then lend them money via margin loans on their main asset, stock in their companies.

[Anonymous]

This is not over by a long shot. Small regional banks are in trouble. Stay away from them.

This banking crisis is the cusp of a much worse financial crisis

[Anonymous]

[Anonymous]

First Republic has been taken over by the FDIC.

[Anonymous]

Anonymous wrote:First Republic has been taken over by the FDIC.

And JPMorgan and PNC are both bidding to buy it.

[Anonymous]

If you're a big contributor (like Sequoia) to Democrats and never Trumpers, the bailout is a no brainer. This was accidentally released from the FDIC in a FOIA request

[Anonymous]

Anonymous wrote:If you're a big contributor (like Sequoia) to Democrats and never Trumpers, the bailout is a no brainer. This was accidentally released from the FDIC in a FOIA request

Who cares? This wasn’t a consideration at all in guaranteeing the deposits. The bigger issue was that SVB held thousands of transaction accounts for small and medium businesses. Plus fintech firms that service B2B. Without the guarantee, tens of thousands of companies would not make payroll the next week or pay their vendors. The cascading effects would’ve been catastrophic.