SVB

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After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.
 
It will be interesting to see what the fallout of this collapse is, both to the companies with a large amount of their working capital lost there as well as to the other banks moving forward. If I had hundreds of millions of dollars in cash, I wouldn’t have it all in one bank.
 
anbuitachi said:


After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.
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I remember in 08' when Washington Mutual went under. I had 5% CDs at the time and if I remember another bank took over and basically I lost out on the guaranteed 5%. I just told them to send me a check.
 
anbuitachi said:


After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.
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IlDestriero said:
It will be interesting to see what the fallout of this collapse is, both to the companies with a large amount of their working capital lost there as well as to the other banks moving forward. If I had hundreds of millions of dollars in cash, I wouldn’t have it all in one bank.
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not much. you saw my post? they made whole. nothing to see here. move on til the next collapse. repeat
 
anbuitachi said:


After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.
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“No losses will be borne by the taxpayer…”

Pardon my ignorance, but does anyone know how THAT is done????? Where does the money come from, thin air???
 
DirtDocMD said:
“No losses will be borne by the taxpayer…”

Pardon my ignorance, but does anyone know how THAT is done????? Where does the money come from, thin air???
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Supposedly, the new facility will take the assets on the books. Long term Treasurys, MBS, whatever. Also FDIC insurance premiums paid by all banks will be increased. In addition I expect some of the major banks to pay something for the customer base. That does have some value.
 
Another one bites the dust- Signature Bank is next to fall…Even if the depositors come out “whole”, and the taxpayers don’t pay, it is a complete disaster for the investors and shareholders, not to mention the possibility of viral bank run!
 
Young&Wise said:
Another one bites the dust- Signature Bank is next to fall…Even if the depositors come out “whole”, and the taxpayers don’t pay, it is a complete disaster for the investors and shareholders, not to mention the possibility of viral bank run!
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The backing of deposits is designed to prevent bank runs
 
Dr. Rude said:
The backing of deposits is designed to prevent bank runs
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True that. However, I wonder how many big depositors are going to trust the confident words of Janet Yellen/ Feds/ Regulators, and not withdraw their deposits > 250K. Sadly, it’s hard to not forsee a bank run starting tomorrow.
 
If the deposits of magical money are all gone from the banks where did the money go exactly?

Any bets on how this impacts the uninsured money market fund/core positions in 401ks all over the country--do we think we'll see a run on those as well? How does that impact the banking system?
 
finance.yahoo.com

Signature Bank becomes next casualty of banking turmoil after SVB

State regulators closed New York-based Signature Bank on Sunday, the third largest failure in U.S. banking history, two days after authorities shuttered Silicon Valley Bank in a collapse that stranded billions in deposits. The Federal Deposit Insurance Corporation (FDIC) took control of...
finance.yahoo.com finance.yahoo.com
 
My guess is that the big buck depositors likely have good financial advisors and will first end up getting their money out and then likely distribute the funds as smaller deposits upto the FDIC offered value in other banks.
The money market accounts are insured by the FDIC upto the legal limit of $250K on a per-depositor, per-bank basis.
This bank collapse has definitely roiled the Fed’s plans to hike interest rates further in its bid to tamp down inflation. Have to see wait and what happens…This bank fallout is going to influence the market here and worldwide.The Asia-Pacific stock market is opening now and we will be seeing the losses soon. Let’s see how this week rolls…
 
Inflation is here to stay. The purpose of raising rates was to quell the “transitory” inflation. The goal was to decrease money supply. With this bailout, the opposite will happen. If bonds that should be sold at less than face value are redeemed for face value, we’re basically back to square 1. These seems like total incompetence or intentional, neither which should be tolerated.
 
Direct Laryngoscopy said:
The general public will soon get an education on counterparty risks, interest rate risks, Re-hypothecation, fractional reserve banking and bail-ins
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I feel like I am one standard deviation above the general public with regards to financial terms and understanding.

However, I have no idea what half of the words are in this post.
 
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Direct Laryngoscopy said:
Inflation is here to stay. The purpose of raising rates was to quell the “transitory” inflation. The goal was to decrease money supply. With this bailout, the opposite will happen. If bonds that should be sold at less than face value are redeemed for face value, we’re basically back to square 1. These seems like total incompetence or intentional, neither which should be tolerated.
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Seems intentional to me. The feds seem to have been looking for either a recession or an event like this to control the market.

Meanwhile, the Oscar’s are going on where celebrities and the entertainment industry live in another world basking in excess of money while the average American consumes their product.
 
Direct Laryngoscopy said:
Inflation is here to stay. The purpose of raising rates was to quell the “transitory” inflation. The goal was to decrease money supply. With this bailout, the opposite will happen. If bonds that should be sold at less than face value are redeemed for face value, we’re basically back to square 1. These seems like total incompetence or intentional, neither which should be tolerated.
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The feds are put in a tough spot by reckless finance people who took huge risks because they knew or suspected they would be bailed out. No skin in the game. I win- I get fabulously rich. I lose-meh, bailout. Maybe try it again in a decade.
 
Young&Wise said:
True that. However, I wonder how many big depositors are going to trust the confident words of Janet Yellen/ Feds/ Regulators, and not withdraw their deposits > 250K. Sadly, it’s hard to not forsee a bank run starting tomorrow.
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i mean oprah got her 590M back. i doubt she'll split them up to 250k chunks to each bank. there arent enough banks. i bet gov bailed depositors bc oprah had 590m to lose !! oprah probably called them up. imagine if she loses that. thatd be more breaking news than startups going bankrupt
 
nopain1234 said:
Did you guys see another bank in NYC going under? SBNY
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nopain1234 said:
finance.yahoo.com

Signature Bank becomes next casualty of banking turmoil after SVB

State regulators closed New York-based Signature Bank on Sunday, the third largest failure in U.S. banking history, two days after authorities shuttered Silicon Valley Bank in a collapse that stranded billions in deposits. The Federal Deposit Insurance Corporation (FDIC) took control of...
finance.yahoo.com finance.yahoo.com
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i posted way up there. fed made them whole. including signature bank.
 
i wonder what the publics reaction will be to his action by the government in the future. will it be another 'bail out the rich' like 2008 type of reaction?
 
nopain1234 said:
This is 100% a bail out. Kick the can down the road if you will.

I guess the fed is going to pump the brakes on rate hikes too
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Sorta. Bailing out depositors is different than the bailout of 2008. Not saying that it is good. It is not. But it seems to be the least bad choice.
 
"This is not a bailout and there will be consequences"
"The federal government will guarantee everyone's deposits"
 
Well I would hope they would protect the depositors vs bailing out a failed company.
 
PainInTheAnes said:
Yes actually, the fed buys all the worthless bonds from them with money they just print to do it. It’s inflationary but not tax dollars
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The FDIC isn’t bailing out SIVB SHAREholders nor BONDholders just Depositors. All assets will be sold to make depositors whole and if there is a negative difference it will be assessed to all banks. So, the Fed will not buy SIVB bonds nor will the Fed use tax dollars to pay depositors. It’s up to each bank who was assessed to pass on that cost to customers.

Frankly, the Trump-era deregulation of fractional reserves requirement and huge stimulus got us into this crisis. Thanks Trump!
 
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marr65 said:
The FDIC isn’t bailing out SIVB SHAREholders nor BONDholders just Depositors. All assets will be sold to make depositors whole and if there is a negative difference it will be assessed to all banks. So, the Fed will not buy SIVB bonds nor will the Fed use tax dollars to pay depositors. It’s up to each bank who were assessed to pass on that cost to customers.

Frankly, the Trump-era deregulation of fractional reserves requirement and huge stimulus got us into this crisis. Thanks Trump!
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GOOD!

And this clown and his associates should be forced to pay back their ill gotten gains and banned from banking forever.

35839382_thumb5_690x400.jpg
 
marr65 said:
The FDIC isn’t bailing out SIVB SHAREholders nor BONDholders just Depositors. All assets will be sold to make depositors whole and if there is a negative difference it will be assessed to all banks. So, the Fed will not buy SIVB bonds nor will the Fed use tax dollars to pay depositors. It’s up to each bank who was assessed to pass on that cost to customers.

Frankly, the Trump-era deregulation of fractional reserves requirement and huge stimulus got us into this crisis. Thanks Trump!
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Federal government guarantees the principal. What prevents the banks to do risky investments? Success, big payday; failure, Uncle Sam will take care of it.
 
Okay,

I need someone to explain this whole situation to me like I was 10 years old - because there are somethings I don't understand.

I get why SVB was stressed.

They bought bonds (the safest investment anyone could make) that paid (let's make up a number) 1.5%, probably long term.
Interest rates rise, so the secondary market price for those treasury bonds drop. But who cares, because if you hold them to maturity, you still make money. BUT, it sounds like SVB needed some liquidity, so they had to sells those BONDS at a loss. But that is investing and really not a big deal. It is unclear to me WHY the word started spreading that money needed to be withdrawn, which I think the real crook is the guy that started this whole thing by telling his clients to withdraw all their money from SVB. That's like yelling "FIRE" in a crowd.

Anyway, here are my questions:

#1: Why are people saying that SVB was being risky? or that the CEO should go to jail? What did they do that was risky? T-Bills risky?

#2: Why would SVB failing, cause other banks stress? We know another bank failed today. I don't understand the connection - unless it caused others to run on smaller banks.
 
What do y’all think this will do to mortgage rates over the next 6 months or so? I’m preparing to close on a construction loan soon 🤞
 
patriot6 said:
What do y’all think this will do to mortgage rates over the next 6 months or so? I’m preparing to close on a construction loan soon 🤞
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A week ago the consensus of opinion was that rates were still ticking higher and would stay there for awhile.
Right now the consensus is that fear of a loss of confidence in the banking system will cause downward pressure (or at least alleviate upward pressure) on rates and futures predict that rates will be lower by the end of the year.
Next week or month might be different.
 
narcotics999 said:
Federal government guarantees the principal. What prevents the banks to do risky investments? Success, big payday; failure, Uncle Sam will take care of it.
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“When the government takes over Bank of America they won’t have to change the signs”

-Jay Leno
 
Again, the crap spewed out of pundits mouths is unbelievable.

Let us once again be reminded that Powell has long said "there will be pain. Get ready for it. Our job is to decrease inflation. That is our ONLY goal." (Implied in this statement..."we don't care about failing banks. That is an issue that law makers created by laxed laws that allow banks to live on the edge. If you have an issue with that, talk to your congress man or woman or zhe").

Yet now the pundits are crying "Powell MUST not raise rates. It hurts us. We don't like it!"

Funny stuff actually.
 
nopain1234 said:
This is 100% a bail out. Kick the can down the road if you will.

I guess the fed is going to pump the brakes on rate hikes too
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By the way, to answer your excellent and fun question you asked in another thread, but for some very strange and unclear reason, @Arch Guillotti closed it - I am whatever party Yang claims. I love that guy.
 
Here is what I would like someone to answer.

I've tried reading a lot of stuff about this but can't find a good answer.

SVB had a "run" of 42 billion.

People are criticizing the deregulation that made it so SVB didn't have to undergo the federal stress test annually.

So - IF they were part of the stress test, would it have made a difference? Because 42 billion is likely MORE than what the stress test required.

And like a said before, ANY bank would fail, no matter the amount of regulation, if there is a sufficient RUN on them.
 
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