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BLADEMDA

BLADEMDA

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  1. Attending Physician
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Silicon Valley Bank is out of business. The Bank has collapsed in a matter of a few days. Here is Jim Cramer recommending the failed bank a month ago on his show. Watch at 7 minutes for 1 minute.

 
finance.yahoo.com

Thiel’s Founders Fund Withdrew Millions From Silicon Valley Bank

(Bloomberg) -- Peter Thiel’s Founders Fund had no money with Silicon Valley Bank as of Thursday morning as the bank descended into chaos, according to a person familiar with the matter.Most Read from BloombergFirst Republic Set to Get $30 Billion of Deposits in RescueIn New York City, a $100,000...
finance.yahoo.com finance.yahoo.com

Peter Thiel was recommending on CBC that all investors remove their money from SVB. Did he cause a run on the bank or was he recommending the right move to others? Either way, the end result is that the bank failed in less than 48 hours after his public comments.
 
Beeftenderloin said:
Lol, this aged like milk.
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Hey, the GLP RA drugs do have staying power and I know many people taking them. I have no idea about the stock of Eli-Lilly but their GLP RA is a good one.
The problem is that Eli-Lilly stock is already expensive so their new drug MUST be a hit to justify current valuation.

"We are increasing Lilly's fair value estimate to $289 from $273 largely based on excellent recent prescription trends for the company's new diabetes drug Mounjaro. While sales have yet to fully materialize (partly due to insurance still expanding coverage), we expect this drug to become Lilly's largest product over the next five years based on a leading efficacy profile in diabetes and weight loss. We expect Mounjaro (tirzepatide) holds peak annual sales potential above $15 billion. The drug entered the market in 2022 for diabetes treatment, and we expect a label expansion into obesity treatment in 2023."
 
The Financial Select SPDR ETF (XLF) dived 8.5%, with JPMorgan and SCHW stock big holdings. The SPDR S&P Regional Banking ETF (KRE) plummeted 15.7%, its worst weekly loss since the Covid crash in March 2020. SIVB stock and Western Alliance are notable components.


For the traders out there I would assume the KRE would bounce back next week as SVB is removed from the ETF. But, this may take a few weeks for the panic to fade. Maybe, the XLF is less risky as the big banks have the resources to weather the storm.
 
BLADEMDA said:
Hey, the GLP RA drugs do have staying power and I know many people taking them. I have no idea about the stock of Eli-Lilly but their GLP RA is a good one.
The problem is that Eli-Lilly stock is already expensive so their new drug MUST be a hit to justify current valuation.

"We are increasing Lilly's fair value estimate to $289 from $273 largely based on excellent recent prescription trends for the company's new diabetes drug Mounjaro. While sales have yet to fully materialize (partly due to insurance still expanding coverage), we expect this drug to become Lilly's largest product over the next five years based on a leading efficacy profile in diabetes and weight loss. We expect Mounjaro (tirzepatide) holds peak annual sales potential above $15 billion. The drug entered the market in 2022 for diabetes treatment, and we expect a label expansion into obesity treatment in 2023."
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As an aside, is mounjaro supposed to be a contraction of ‘Mount Kilimanjaro’? I could see that being inspirational, as in weight loss is a big mountain to climb, or offensive if you’re comparing your patients to large mounds. Just seems like a funny choice of name to me.
 


Always love the brazenness of billionaires when it comes to their hard earned dollars. Capitalism is great when they’re reaping the profits, but socialism is a convenient solution when things don’t go as planned.

I do feel bad for the clients who depend on SVB, but a government bailout of venture capital is a hard sell.
 
The prior administration reduced regulation and lessened safety margins for banks, which is why a "stress test" didn't work in this scenario. The threshold for stress testing and more regulation went from 50 billion to 250 billion. A question to ask is how many other niche or smaller banks, esp those w/ heavy long term bond interest rate risk like SVB had, can fall through the cracks and collapse.
1678554641370.png
 
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Bank slump could create opportunities in financials​

The selloff in bank shares this week could create an opportunity for investors to snatch up some quality banks at good prices, said Gina Bolvin, president of Bolvin Wealth Management.
“Right now we’re neutral on financials, but, as they get cheaper, and as they’re selling off, there may be an opportunity to invest in some of the larger, more quality banks,” she said.
These names typically have more diversified businesses, she said, adding that turmoil at SVB is unlikely a “systematic” issue.
 
BLADEMDA said:

Bank slump could create opportunities in financials​

The selloff in bank shares this week could create an opportunity for investors to snatch up some quality banks at good prices, said Gina Bolvin, president of Bolvin Wealth Management.
“Right now we’re neutral on financials, but, as they get cheaper, and as they’re selling off, there may be an opportunity to invest in some of the larger, more quality banks,” she said.
These names typically have more diversified businesses, she said, adding that turmoil at SVB is unlikely a “systematic” issue.
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BAC is very cheap right now. Same is Charles Schwab.
 
Ezekiel2517 said:
The prior administration reduced regulation and lessened safety margins for banks, which is why a "stress test" didn't work in this scenario. The threshold for stress testing and more regulation went from 50 billion to 250 billion. A question to ask is how many other niche or smaller banks, esp those w/ heavy long term bond interest rate risk like SVB had, can fall through the cracks and collapse.
View attachment 367515
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Both parties guilty. Clinton's man Paul Rubin was insturmental in repealing the Glass-Steagel act. In 2008 not one banker went to jail for the crimes they committed. I'm assuming the same will happen here as they've paid off Congress to get away with the crimes they've committed. It's no banker left behind again.
 
Just a tidbit at last 2008 meltdown. Only one usa dude was ever convicted. He barely served time. Only one foreign finance dude was convicted and France didn’t even recognize the conviction so he’s Scott free.

You got superstar 30 year old mba Stanford grads on the stand before congress testifying they “don’t recall” anything.

It’s all a scam the financial game. We common folks just along for the ride. Some of us will get lucky. But most docs will have to ride out the long game and keep working until at least our mid 50s plus not get divorce. Or work till mid 40s and not have any kids.

These financial Guys can make one big get at age 35 and hit it big. If they lose the bet. They just get another job. Cause it’s not their money they are playing with.

People became over leverage by early 2022. Many of my friends are up 4-5 million easy in 2 years just from simple growth of stocks investments. Image going from 10 million to 15 million without any major risks. That’s what a lot of people I know went

Now image these silicone valley guys trying to jump from 5 million to 100 million with risky bets in 2 years. That’s what they were trying to do. Greed. It happens all the time with low interest rates.
 
nimbus said:
Billionaire hedge fund founder advocating for…..socialism…but for banks. Thought I’ve seen it all.


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I wonder what his financial position in all this. There will be a lot of money to be made if there is a bailout. There will also be a lot of money to be made if there isn’t. Just in different things.
 
Wasn’t Ackman trying to make a huge financial score by shorting Herbalife, a few years back?? Instead of “pumping and dumping”, he was quite obviously “badmouthing and shorting”. The stuff these guys get away with is unreal.
 
It’s a terrible lose lose situation. 1st republic bank is now on the ropes. If more depositors continue to run the banks we could see a nasty contagion and consolidation of the banking sector (not good).

SVB might not have practiced good risk management by purchasing long dated treasuries during the 0% money printing bonanza during the pandemic (and not hedging). And after the federal reserve started increasing interest rates because inflation was not “transitory” those bonds were at risk if a large amount of depositors wanted to redeem their deposits (they would have to sell those same treasuries at a loss because who would wanna buy a treasury yielding 1% when you can purchase 1 yielding 5%?).

And we might see more of this in the coming weeks as I suspect more banks don’t practice proper risk management (remember 2008?).

I suspect we’ll see more smaller bank failures, and the bigger banks will gobble up the good assets off these insolvent bank for pennies on the dollar and the taxpayer will foot the bill of the ‘toxic’ assets (remember 2008?).

It’s a shame that venture capitalists, who invest in emerging technology and small business owners are caught up in this cluster (97% of deposits are FDIC UNINSURED >$100,000,000,000.00).

SVB is the 15 or so largest bank in the US so this isn’t small potatoes like silvergate bank which went belly up early this week (2 bank failures in a week in significant imo). I don’t think more regulations is the answer because they’ve been shown to be incompetent in sniffing out issues. Personally I think near 0% fractional reserve banking and repealing the glass stegal act should be revisited.

And to the naysayers that think you can’t be affected, after the great financial crises, bank bail-ins, which we’re previously illegal, are now allowed in the US (especially for systemically important banks). So I think every depositor at an American bank should pay attention to what’s going on.
 
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aneftp said:
People became over leverage by early 2022. Many of my friends are up 4-5 million easy in 2 years just from simple growth of stocks investments. Image going from 10 million to 15 million without any major risks. That’s what a lot of people I know went

Now image these silicone valley guys trying to jump from 5 million to 100 million with risky bets in 2 years. That’s what they were trying to do. Greed. It happens all the time with low interest rates.
Click to expand...

This isn’t a leverage problem and is fundamentally different than 2008. The contagion fears are overblown. At worst, a fair number of tech startups will close shop and a few regional banks may face similar bank runs. Nothing too big to fail or risking the entire global economy as in 2008.

Think about what SVB was caught bag holding… US treasury bonds. Literally the safest investment you can make. Their problem wasn’t leverage, it was duration risk and lack of client diversification. As interest rates have gone up, companies needed to draw on their deposits, and unfortunately SVB had most of theirs locked up in long-term treasuries that they had to sell at a loss (since they’re worth less now at higher interest rates). Their mistake wasn’t gambling with their investments, rather with their clients who run unprofitable companies with high cash burn rates.
 
When there is a “run” on a bank, are the depositors cashing out $50mil and putting it under their mattress or are they transferring to another bank?
 
I don't have any sympathy. The reason that this bank had a customer base of startups and SPACs was that their underwriting standards were likely very low. They got hit with a perfect storm. Bad interest rate decision. Like 90 billion in long dated bonds. Brilliant move that one. Took a genius CFA from Stanford to make that call and a refugee from FNM. They're customers being shaky players who lowered their deposits to service debt due to higher ratew at the same time they had to mark down their reserves. It is called Capitalism.
 
DirtDocMD said:
Wasn’t Ackman trying to make a huge financial score by shorting Herbalife, a few years back?? Instead of “pumping and dumping”, he was quite obviously “badmouthing and shorting”. The stuff these guys get away with is unreal.
Click to expand...

There's a lot to criticize about Ackman but the Herbalife thing isn't one of them. That company is a shtty, predatory, fraudulent pyramid scheme that only exists by grace of all the legal ambiguity surrounding MLMs.
 
nimbus said:
When there is a “run” on a bank, are the depositors cashing out $50mil and putting it under their mattress or are they transferring to another bank?
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In this case I believe the VCs got spooked and told their foundlings to pull their cash to larger banks. Ironic that after initiating the bank run and causing the bankruptcy, they’re now the loudest ones asking for a bailout.

www.bloomberg.com

SVB Races to Prevent Bank Run as Funds Advise Pulling Cash

Unease is spreading across the financial world as concerns about the stability of Silicon Valley Bank prompt prominent venture capitalists including Peter Thiel’s Founders Fund to advise startups to withdraw their money.
www.bloomberg.com www.bloomberg.com
 
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The risk of contagion is high and to avoid panic, I think the Feds will announce bail out of SVB. History repeats itself…
 
aneftp said:
People became over leverage by early 2022. Many of my friends are up 4-5 million easy in 2 years just from simple growth of stocks investments. Image going from 10 million to 15 million without any major risks. That’s what a lot of people I know went
Click to expand...
How do you know a lot of people with a net worth of 15 million?????? I wanna be your friend
 
gasresident1 said:
How do you know a lot of people with a net worth of 15 million?????? I wanna be your friend
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not uncommon for older docs to have that networth. everything was cheap back then. this guy in my office 68 years old said he made 1.2M a year in the 80s. had a big yacht (which he now sold because income came down), bought many houses (each house was like 70-100k back then). put some in investment, its absolutely many millions now.

same with surgeons. lot of $$

but out side of medicine. lot of tech friends making way more than us, started at young age too. rode the bull market of last decade. i have couple of tech friends retired already in 30s. sold their app to bigger companies for many millions (i heard around 50M but not sure). Another one sold to google... these huge tech companys pay a lot every year to acquire companys. most of them end up going no where and is never heard again after being acquired...
 
Direct Laryngoscopy said:
It’s a terrible lose lose situation. 1st republic bank is now on the ropes. If more depositors continue to run the banks we could see a nasty contagion and consolidation of the banking sector (not good).

SVB might not have practiced good risk management by purchasing long dated treasuries during the 0% money printing bonanza during the pandemic (and not hedging). And after the federal reserve started increasing interest rates because inflation was not “transitory” those bonds were at risk if a large amount of depositors wanted to redeem their deposits (they would have to sell those same treasuries at a loss because who would wanna buy a treasury yielding 1% when you can purchase 1 yielding 5%?).

And we might see more of this in the coming weeks as I suspect more banks don’t practice proper risk management (remember 2008?).

I suspect we’ll see more smaller bank failures, and the bigger banks will gobble up the good assets off these insolvent bank for pennies on the dollar and the taxpayer will foot the bill of the ‘toxic’ assets (remember 2008?).

It’s a shame that venture capitalists, who invest in emerging technology and small business owners are caught up in this cluster (97% of deposits are FDIC UNINSURED >$100,000,000,000.00).

SVB is the 15 or so largest bank in the US so this isn’t small potatoes like silvergate bank which went belly up early this week (2 bank failures in a week in significant imo). I don’t think more regulations is the answer because they’ve been shown to be incompetent in sniffing out issues. Personally I think near 0% fractional reserve banking and repealing the glass stegal act should be revisited.

And to the naysayers that think you can’t be affected, after the great financial crises, bank bail-ins, which we’re previously illegal, are now allowed in the US (especially for systemically important banks). So I think every depositor at an American bank should pay attention to what’s going on.
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its in california. wont be surprised if government state or federal bails them out. california loves that stuff. after all assets are sold, the net loss is probably only a few B imo. california can eaisly afford that. my good city of NYC spends 4B a year just on migrants. i think entire state of california can easily bail them out. also i read majority of the fund is there, just take time to get out. we will find out more next week.
 
BLADEMDA said:

Bank slump could create opportunities in financials​

The selloff in bank shares this week could create an opportunity for investors to snatch up some quality banks at good prices, said Gina Bolvin, president of Bolvin Wealth Management.
“Right now we’re neutral on financials, but, as they get cheaper, and as they’re selling off, there may be an opportunity to invest in some of the larger, more quality banks,” she said.
These names typically have more diversified businesses, she said, adding that turmoil at SVB is unlikely a “systematic” issue.
Click to expand...
agree.
look at first republic. TANKED to 47 on friday morning but ended the day at 81. if you bought anywhere close to 47 and held til end of day. you made a fast 50%++ profit
 
thinkorswim said:
This isn’t a leverage problem and is fundamentally different than 2008. The contagion fears are overblown. At worst, a fair number of tech startups will close shop and a few regional banks may face similar bank runs. Nothing too big to fail or risking the entire global economy as in 2008.

Think about what SVB was caught bag holding… US treasury bonds. Literally the safest investment you can make. Their problem wasn’t leverage, it was duration risk and lack of client diversification. As interest rates have gone up, companies needed to draw on their deposits, and unfortunately SVB had most of theirs locked up in long-term treasuries that they had to sell at a loss (since they’re worth less now at higher interest rates). Their mistake wasn’t gambling with their investments, rather with their clients who run unprofitable companies with high cash burn rates.
Click to expand...

Dr. Rude said:
I don't have any sympathy. The reason that this bank had a customer base of startups and SPACs was that their underwriting standards were likely very low. They got hit with a perfect storm. Bad interest rate decision. Like 90 billion in long dated bonds. Brilliant move that one. Took a genius CFA from Stanford to make that call and a refugee from FNM. They're customers being shaky players who lowered their deposits to service debt due to higher ratew at the same time they had to mark down their reserves. It is called Capitalism.
Click to expand...

SVB knew what they were doing but took the risk anyway. Their stock was worth 15B prior to this and they had 150B in treasuries or something like that. a 1% gain on 150B is 1.5B. Which is like a 10% revenue for their 15B stock. they went full risk on. they didnt hedge for interest risk even though fed started hiking rates. They got tons of deposits over last couple years, i read they doubled or quadrupled or something, but they didnt increase interest swaps to hedge. they took a gamble and lost. hopefully other regional banks will learn and start getting some hedge on their bonds

vector2 said:
There's a lot to criticize about Ackman but the Herbalife thing isn't one of them. That company is a shtty, predatory, fraudulent pyramid scheme that only exists by grace of all the legal ambiguity surrounding MLMs.
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Agree. Herbalife sucks and is a terrible company.
 
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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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the general public is too uneducated to understand that stuff... you think they actually understand what happened in 2008? ask random people on street about 2008 crash and you'll probably get a stupid answer 😀
 
anbuitachi said:
the general public is too uneducated to understand that stuff... you think they actually understand what happened in 2008? ask random people on street about 2008 crash and you'll probably get a stupid answer 😀
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Just because you go to school doesn’t mean you have to learn anything……..
 
anbuitachi said:
the general public is too uneducated to understand that stuff... you think they actually understand what happened in 2008? ask random people on street about 2008 crash and you'll probably get a stupid answer 😀
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Direct Laryngoscopy said:
Just because you go to school doesn’t mean you have to learn anything……..
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Reading the numbers: 130 million American adults have low literacy skills — APM Research Lab

“… more than half of Americans between the ages of 16 and 74 (54%) read below the equivalent of a sixth-grade level.”

More than anything, we need a center for kids who can’t read good.
 
vector2 said:
There's a lot to criticize about Ackman but the Herbalife thing isn't one of them. That company is a shtty, predatory, fraudulent pyramid scheme that only exists by grace of all the legal ambiguity surrounding MLMs.
Click to expand...
Badmouthing a bad company is one thing. Badmouthing a bad company “for fun and profit” (Ackman was shorting the shares), is another. Happily, he lost over $750 million on that deal, while Icahn made a $Billion (pushing shares the other direction), playing an early version of Wallstreetbes/Gamestop…
 
DirtDocMD said:
Badmouthing a bad company is one thing. Badmouthing a bad company “for fun and profit” (Ackman was shorting the shares), is another. Happily, he lost over $750 million on that deal, while Icahn made a $Billion (pushing shares the other direction), playing an early version of Wallstreetbets…
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You're acting like it was some big secret that he was shorting that [truly awful] company. When in reality it literally couldn't have been more public that he was short the company. Every moneycenter bank, hedge fund and trading firm puts out notes on their bullish and bearish positions. Literally every analyst and pundit has to disclose their conflicts when talking about a stock. Do you writing scathing internet posts about the dummies on fast money who up talk and down talk their longs and shorts? Not to mention you have firms like muddy waters whose entire specialty is shorting stocks.

I think your outrage is either misguided or misplaced. That, or you own an Herbalife store.
 
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SVB employees received their annual bonuses on Friday just hours before the collapse. The size of the payouts couldn't be determined, but SVB bonuses ranged from about $12,000 for associates to $140,000 for managing directors, according to Glassdoor.com.
 
Young&Wise said:
SVB employees received their annual bonuses on Friday just hours before the collapse. The size of the payouts couldn't be determined, but SVB bonuses ranged from about $12,000 for associates to $140,000 for managing directors, according to Glassdoor.com.
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i think glassdoor numbers are usually an underestimate hahah
 
vector2 said:
You're acting like it was some big secret that he was shorting that [truly awful] company. When in reality it literally couldn't have been more public that he was short the company. Every moneycenter bank, hedge fund and trading firm puts out notes on their bullish and bearish positions. Literally every analyst and pundit has to disclose their conflicts when talking about a stock. Do you writing scathing internet posts about the dummies on fast money who up talk and down talk their longs and shorts? Not to mention you have firms like muddy waters whose entire specialty is shorting stocks.

I think your outrage is either misguided or misplaced. That, or you own an Herbalife store.
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Do you enjoy turning EVERY thread you enter into a personal attack fiasco?? Do you enjoy turning EVERY thread you enter into a non-stop cut-n-paste-athon?? Do you feel some incredible urge to get the “last word” in on EVERY subject you discuss?? Perhaps you remember referring to me as a “disingenuous-schidthead” in a thread, a while back?? Where did I EVER refer to Herbalife in any positive fashion?? You all but agreed with me, regarding Bill Ackman, yet STILL feel the need to throw in some sort of personal attack, as if Herbalife means a damned thing to me..

Do me a favor, stay in your lane, and realize that just because someone doesn’t simply nod their head in agreement with every utterance that comes out of your fingertips, that it doesn’t necessarily make them some “mouth-breather”, subject to your personal attacks and half-page long posting tirade. Feel free to get back to SVB, or feel free to try to turn this into a typical “Vector2 one-upsmanship” show. It makes no difference to me, other than I find your “schtick” quite tiring…
 
Young&Wise said:
SVB employees received their annual bonuses on Friday just hours before the collapse. The size of the payouts couldn't be determined, but SVB bonuses ranged from about $12,000 for associates to $140,000 for managing directors, according to Glassdoor.com.
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taking all the assets and value out before handing it to the government to fix
****ers
 
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