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Silicon Valley Bank Goes Under, Won't be the Last...


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2023 Mar 10, 9:47am   34,051 views  322 comments

by NuttBoxer   ➕follow (0)   💰tip   ignore  

To get out of the collapse in 2008, apparently the plan was to never raise interest rates again. Now that it's impossible, the bubble is moving to banks. Funny thing is, I had applied for an open position with them about a month ago. Now I know why I never heard back...

Oh yeah, and to once again blow away the bullshit about everyone being insured, read the article about how some depositors will have to pray dividend sales will someday return their deposits to them.

For some fun search bank run and see what some of the top images are.

https://www.zerohedge.com/markets/300-billion-reasons-why-svb-contagion-spreading-broader-banking-system


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252   AmericanKulak   2023 Mar 17, 4:21pm  

The economy is heading towards correction for sure now!

Get Mila at a discount!

253   Patrick   2023 Mar 17, 4:33pm  

https://www.frontpagemag.com/svb-went-woke-then-broke-then-got-a-bailout/


SVB Went Woke, Then Broke, Then Got a Bailout
Americans can’t afford food, but leftist and Chinese companies get bailed out.
March 17, 2023 by Daniel Greenfield
254   Eric Holder   2023 Mar 17, 6:26pm  

Patrick says


Americans can’t afford food


Eh? Americans most definitely can afford more food then they need. Look at that beach picture someeone posted in the funny pictures thread.
255   NuttBoxer   2023 Mar 17, 9:48pm  

Eating processed garbage does not count as food.
256   RWSGFY   2023 Mar 18, 7:58am  

NuttBoxer says


Eating processed garbage does not count as food.


That's mostly because of laziness, not cost of basic ingredients. An 8 oz bag of Lays at Safeway costs $4.47. A 5 lbs bag of Russet potatoes at the same store costs $3.99. Same $3.99 buys a pound of organic chicken drumsticks.

Processed shit is waay more expensive.
259   NuttBoxer   2023 Mar 18, 3:33pm  

Apparently UBS is in the process of emergency bailout of Credit Suiesse to prevent economic meltdown Monday.

BTW, contagion is a medical term, specifically used in relation to pandemics(real ones, not the fake BS we just saw). So why the fuck use it to describe banking collapse? See one health conspiracy for details.
260   NuttBoxer   2023 Mar 19, 9:51am  

Sounds like UBS bailout is not happening, on to plan B, destroy the Euro!
261   mell   2023 Mar 19, 10:14am  

NuttBoxer says

Sounds like UBS bailout is not happening, on to plan B, destroy the Euro!

That would be OK. The EU unelected crony traitors have done nothing but harm to the countries. The EU should have been a purely economic union with the Euro as additional common currency, the EU countries should have never given up their currencies and sovereignty.
262   mell   2023 Mar 19, 10:17am  

UBS to buy CS for 2 billion, a fraction of its 8 billion close on Friday. UBS and CS shareholders will be shafted as no vote allowed. Probably all in all a positive development as some losses, bad spec money and debt will be flushed out.

https://www.zerohedge.com/markets/ubs-offers-buy-credit-suisse-1bn-025-share-takeunder-cs-balks-offer
264   NuttBoxer   2023 Mar 19, 4:19pm  

mell says

UBS to buy CS for 2 billion, a fraction of its 8 billion close on Friday. UBS and CS shareholders will be shafted as no vote allowed. Probably all in all a positive development as some losses, bad spec money and debt will be flushed out.


Looks like 3 million was the final number. Exchange on the shares is over 20/1.

Also saw central banks opening up some "currency swap" lines, whatever the fuck that's supposed to mean. These guys seem fucking nervous..
266   NuttBoxer   2023 Mar 22, 8:19am  

First Republic continues to circle the toilet, seems likely they will not last another week.
268   Patrick   2023 Mar 22, 9:41pm  

https://slaynews.com/economy/former-fdic-chair-speaks-out-against-svb-bailout-says-biden-admin-overreacted/


The former chair of the Federal Deposit Insurance Corporation (FDIC), Sheila Bair, has criticized the Biden administration’s “bailout” of Silicon Valley Bank (SVB).

Bair denounced the Biden admin’s decision to guarantee all deposits at the failed SVB, labeling the move an “overreaction.”

Bair made the comments during a recent appearance on “The Washington Post Live” series.

She stated that insuring all deposits at SVB and at the failed Signature Bank was an unnecessary “bailout.”

Bair warned that the move would be paid for by extra fees on all banks, even well-run community and regional banks.

The former FDIC chief also threw cold water on proposals to waive the current $250,000 deposit insurance lid and for the FDIC to provide unlimited guarantees for all deposits across the entire $17.5 trillion U.S. banking sector.

“We need market discipline to complement the supervisory process,” Bair said.


I think market discipline should be the supervisory process. No bailouts, ever. No FDIC. If you put money in a bank, you should be WARNED in big letters that you are making an unsecured loan to the bank. The bank officers and shareholders should all be personally legally liable for all the deposits.
271   NuttBoxer   2023 Mar 24, 9:32am  

Sounds like after all that Credit Suisse is still going under...
274   AD   2023 Apr 2, 11:37pm  

A lot of banks lending to commercial real estate (CRE) will suffer loses.

Real Estate Select Sector SPDR Fund is down about 29%. It was down 37% in October 2022 when the S&P 500 was down about 25%. Granted, not all the fund is invested in commercial high rise buildings.

Union Bank Plaza in Los Angeles sold recently for a 50% loss. It is a 40-story, 701,888-square-foot office building.

Read more about commercial real estate woes at :

https://www.zerohedge.com/markets/manhattan-office-vacancy-hits-record-marquee-la-office-tower-sells-50-loss

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275   EBGuy   2023 Apr 3, 12:18am  

ad says

Union Bank Plaza in Los Angeles sold recently for a 50% loss. It is a 40-story, 701,888-square-foot office building.

That is insane as it is 50% off the 2010 price according to the article.

That said, still wondering if (when?) it is time to buy the REIT indexes...
276   WookieMan   2023 Apr 3, 5:12am  

EBGuy says

ad says


Union Bank Plaza in Los Angeles sold recently for a 50% loss. It is a 40-story, 701,888-square-foot office building.

That is insane as it is 50% off the 2010 price according to the article.

That said, still wondering if (when?) it is time to buy the REIT indexes...

Outside of prime locations across the country a lot of buildings are going to be torn down. The McDonalds campus in IL a few years back moved to downtown Chicago from Oak Brook, IL. Either who they sold it to or were leasing from tore it all down. Whoever picked it up is now building on it though. Not sure what they would put there, but likely office and hotel. It's nicer area than Rosemont for O'hare business travelers and only 10-15min away.

A lot of incentives to get companies to move into Chicago are going to look like shit once they start moving back out of urban centers. I'm sure it's the same out in CA. Commercial was always going to get hammered after covid became a thing. Smart businesses can manage remote workers. Most notes are 5 years. So depending when the note comes due we're probably at the start and 1-2 years from a potential bloodbath.

Warehouses though will help keep the floor high with online shopping. We'll see.
277   1337irr   2023 Apr 3, 6:27am  

I think multifamily REITs are fine, other REITs might need more investigation. I suspect it might be safe to get into more traditional REIT in six months, but REITs I think can hid a lot of losses more than publicly traded company with commercial and retail building. SVB went down in a rising interest rate environment and I think a lot of building were mortgage out in a high interest rate environment and they are losing money because occupancy is down.

I like multifamily because it's housing, retail could be good if done right, commercial seems scary and industrial seems great.
278   AD   2023 Apr 3, 8:57am  

WookieMan says

Oak Brook, IL. Either who they sold it to or were leasing from tore it all down. Whoever picked it up is now building on it though. Not sure what they would put there, but likely office and hotel. It's nicer area than Rosemont for O'hare business travelers and only 10-15min away.


At least 33% of Oak Brook, IL's population is Asian. More like causation and not correlation or happenstance in regards to your observations about it being a nicer area compared to other Chicago areas.

https://en.wikipedia.org/wiki/Oak_Brook,_Illinois#Demographics

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279   AD   2023 Apr 3, 12:01pm  

cisTits says

We get years of cheap money and start to think cheap money is normal. We see the endlessly rising asset prices and believe we’re skilled investors


7 out of 8 years of the Obama admin was with a Fed Funds rate of 0.25% and an average annual inflation rate of about 1.5%.

I do not know of any other extended period where the Fed Funds rate that was less than the inflation rate.

I agree it is problematic, as they should have raised rates in 2012 as that was more than enough time for the economy to recover from the Great Recession.

Right now the Fed Funds rate is 5% and CPI (12 months) is 6%. The Fed should at least hold the Fed Funds rate steady and wait to see CPI to drop below 5% within the next 6 months.

.
280   NuttBoxer   2023 Apr 3, 6:59pm  

The big banks lost 90 billion the last week of March from depositor withdrawals. Loss of confidence is system-wide, and growing.
281   HeadSet   2023 Apr 3, 8:44pm  

NuttBoxer says

The big banks lost 90 billion the last week of March from depositor withdrawals.

Some of that may be from putting the cash into the new high return CDs.
282   AD   2023 Apr 3, 11:47pm  

NuttBoxer says

The big banks lost 90 billion the last week of March from depositor withdrawals. Loss of confidence is system-wide, and growing.


Schwab is down about 47% from its all time high set in January 2022.

Looks like a good buy considering it was selling for around $50 back in early 2020.
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283   WookieMan   2023 Apr 4, 1:13am  

HeadSet says

NuttBoxer says


The big banks lost 90 billion the last week of March from depositor withdrawals.

Some of that may be from putting the cash into the new high return CDs.

But usually they would put it back in the same bank since they have an account, right? So they don't lose net deposits and technically lock said deposit in for longer over a checking or savings account. Or are people going broke? Or are they drawing down amounts above FDIC limits?
284   Misc   2023 Apr 4, 1:51am  

People are taking the money out of their near zero interest paying accounts and putting it into money market accounts. It is death by a thousand cuts for those institutions that loaded up on long term paper during Covid.
285   HeadSet   2023 Apr 4, 8:18am  

WookieMan says

But usually they would put it back in the same bank since they have an account, right?

Possibly, but many credit unions now offer 5% 1 year CDs. I just moved just moved quite a sum from a bank paying 3% to a credit union paying that 5%. I suspect others are moving money like that as well.
286   GNL   2023 Apr 4, 9:24am  

Patrick says

I think market discipline should be the supervisory process. No bailouts, ever. No FDIC. If you put money in a bank, you should be WARNED in big letters that you are making an unsecured loan to the bank. The bank officers and shareholders should all be personally legally liable for all the deposits.

Absolutely correct. It was this way at one time. TPTB just can't not control everything though.
287   NuttBoxer   2023 Apr 4, 9:59am  

WookieMan says

Or are they drawing down amounts above FDIC limits?


Had that same thought. But if the small banks where losing deposits initially, and now the big banks, where it is all going?
288   zzyzzx   2023 Apr 4, 11:47am  

https://finance.yahoo.com/news/2-billion-loss-sweden-pension-094352977.html

$2 Billion Loss at Sweden’s Pension Fund Has Stocks Chief Put on Leave

Liselott Ledin, the equities chief responsible for making Alecta one of the largest shareholders in Silicon Valley Bank parent SVB Financial Group, Signature Bank and First Republic Bank, has been placed on leave, according to spokesperson Jacob Lapidus.

No other pension fund had bet on the three lenders to the extent that Alecta had. A spokesperson for the fund has since said it does not expect to recover any of its investments in SVB and Signature, and that Alecta has sold its First Republic holding at a loss.



289   AD   2023 Apr 4, 12:00pm  

zzyzzx says


$2 Billion Loss at Sweden’s Pension Fund Has Stocks Chief Put on Leave

Liselott Ledin, the equities chief responsible for making Alecta


1) All I see is white people. It gets a F grade for DEI. https://www.alecta.se/en/in-english/about-alecta/senior-management/

Maybe it over invested in U.S. woke companies like SVB to compensate for being a vanilla (all white management) firm.

2) So it provides pensions for private sector union members like their version of Teamsters, Iron Workers union, Electricians brotherhood, etc. ?

"At Alecta, we manage the occupational pensions of 2.6 million private individuals and 35,000 companies in Sweden. Our job is to maximise the value of occupational pensions for our corporate and private customers."

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