patrick.net

Eman says

Putting things in perspective on bank failures. Then and now. Now is missing Silvergate Bank in the picture.

Adjust for inflation since then. Comparing 2006 to 2023 is vastly different. It looks big now, but it's really not. Also the banks closing had their hands in the crypto game which lost 78% of value since its peak around December. A lot of people and businesses lost their asses in that realm. It wasn't a bank run, they had to pay bills and the funny money in crypto was gone. So they took their deposits out to keep businesses afloat.

Factor in FTX which was all in the same realm of investment and you have a shit storm. We have the tech bust in 2001, housing bust in 2007 (ish) and this will go down as the crypto bust. Unfortunately it's dragging tech into it, but that was their own doing.

Also I think media is another branch in this shit tree. The money isn't going to your typical players. Tech has allowed anyone to generate ad revenue. CNN is literally close to going out of business. What once seemed like a powerhouse of news is bleeding out as it likely crawls to its grave. Same goes for other networks. No one watches TV actively anymore. The ads are worthless.

WookieMan says

Eman says

Putting things in perspective on bank failures. Then and now. Now is missing Silvergate Bank in the picture.

Adjust for inflation since then. Comparing 2006 to 2023 is vastly different. It looks big now, but it's really not. Also the banks closing had their hands in the crypto game which lost 78% of value since its peak around December. A lot of people and businesses lost their asses in that realm. It wasn't a bank run, they had to pay bills and the funny money in crypto was gone. So they took their deposits out to keep businesses afloat.

Factor in FTX which was all in the same realm of investment and you have a shit storm. We have the tech bust in 2001, housing bust in 2007 (ish) and this will go down as the crypto bust. Unfortunately it's dragging tech into ...

I see where we don’t see eye to eye. We’ve had only 3 bank failures…..so far…..compared to all the bank failures during the GFC. Will we have more bank failures? I hope NOT! I hope J Powell and Yellen put an end to the bank runs with their joined statement on Sunday. 🙏

Eman says

I see where we don’t see eye to eye. We’ve had only 3 bank failures…..so far…..compared to all the bank failures during the GFC. Will we have more bank failures? I hope NOT! I hope J Powell and Yellen put an end to the bank runs with their joined statement on Sunday. 🙏

The FDIC keeps a list of shuttered banks going back a good ways. There have been many that have gone under between 2012 and 2022. The central bankers only have two weapons, inflation and bullshit. Is that really your savior..?

https://babylonbee.com/news/congress-takes-brief-pause-from-sending-all-of-your-tax-dollars-to-ukraine-to-send-them-to-silicon-valley-bank

https://babylonbee.com/news/biden-admin-promises-to-tax-silicon-valley-billionaires-on-all-the-money-the-federal-government-just-gave-them

Lol, FDIOU

Patrick says

The problem isn't the "bailout" - it's just making depositors whole.

The problem is that nobody is going to be prosecuted. That's the problem. People need to go to fucking jail. Instead they will just pay a fine. SVB was making wreckless and irresponsible bets. This USED to be prevented by Glass–Steagall. This is a failure of regulators and our criminal government. Put these assholes in jail or it's just going to happen again.

Is Sam Bankman Fried in jail yet?

This is all happening because nobody went to jail with widespread mortgage fraud in the early 2000's.

richwicks says

Patrick says

The problem isn't the "bailout" - it's just making depositors whole.

The problem is that nobody is going to be prosecuted. That's the problem. People need to go to fucking jail. Instead they will just pay a fine. SVB was making wreckless and irresponsible bets. This USED to be prevented by Glass–Steagall. This is a failure of regulators and our criminal government. Put these assholes in jail or it's just going to happen again.

Is Sam Bankman Fried in jail yet?

This is all happening because nobody went to jail with widespread mortgage fraud in the early 2000's.

Agreed. You want that high paying high responsibility job? You need to be prepared to go to jail if you fuck it up.

Collin Rugg
@CollinRugg
·
22h
BREAKING: Gavin Newsom failed to disclose personal ties including his bank accounts at Silicon Valley Bank while lobbying for their bailout.

This is illegal.

Patrick says

This is illegal.

....and nothing will come out of that. One set of rules for peasants, another one for aristocracy.

The next step of these lemon socialism massive bank frauds is to selectively restore some customers but not others through an esoteric process of political fraud, while all the executives stroll off with their multi millions in plunder, maybe have to do a token discovery session some where down the road, but are left to rinse and repeat at other financial institutions.

It's institutionalized plunder with the captured government and selective justice and regulatory agencies complicit.

Listening to Yellen for the first time, she's a gaslighting POS worthy of the Actor Biden administration, a complete charlatan.

Credit Suisse is next, apparently. If they goes under, it will be much worse.

Bd6r says

Credit Suisse is next, apparently. If they goes under, it will be much worse.

There have been plenty of bad banks constantly rumored to fail, SVB, 1st Republic, Credit Suisse, Deutsche Bank are the usual suspects and shit banks. But if they are big enough they will be bailed out every single time, and I count CS and DB as too big to fail, at least not without some sort of depositor bailout.

Patrick says

Collin Rugg
CollinRugg
·
22h
BREAKING: Gavin Newsom failed to disclose personal ties including his bank accounts at Silicon Valley Bank while lobbying for their bailout.

This is illegal.

https://theintercept.com/2023/03/14/cheering-silicon-valley-bank-bailout-gavin-newsom-doesnt-mention-hes-a-client/

https://therealdeal.com/national/2023/03/14/ny-multifamily-industry-fears-bank-contagion/

NY Multifamily Fears Fallout from Signature Bank Collapse: One condo developer said panic also grew around condo deposits this weekend, as many law firms used the bank’s escrow services.

Days before Signature Bank collapsed, Danny Fishman was scrambling to move hundreds of his buildings’ deposits. The goal: have no more than $250,000 — what the federal government insures — in any account.

Fishman, whose New York-based Gaia Real Estate has over 18,000 apartments, clocked 18-hour days this weekend yanking funds from regional banks, including Signature, and moving money into larger institutions he hoped would be better insulated against the turmoil in the financial sector.

https://www.barrons.com/articles/svb-recession-signal-yield-curve-banks-93fa5227

SVB’s Collapse Shows the Yield Curve Is Always Right

Sounds like Credit Suisse is about to go under, or the Euro is on it's way to hyperinflation, SNB bailout not working...

Also First Republic going to be the 3rd bank shuttered, likely this week or next.

And then there's this:

After reading reports about how small tech startups have been withdrawing more bank deposits to financially survive, I thought about what richwicks said about government funding (i.e., Pentaon/intel agencies, etc.) is what is keeping Silicon Valley no better than semi-solvent. Then I read this article which goes to what he mentioned.

https://www.defenseone.com/business/2023/03/pentagon-mobilized-support-tech-startups-after-bank-failure/384033/

,

Above: "Get those numbers up!"

https://www.americanbanker.com/news/banks-tap-federal-home-loan-bank-system-for-90-billion-in-liquidity

https://babylonbee.com/news/bank-learns-hard-lesson-that-if-they-invest-their-money-irresponsibly-the-government-will-bail-them-out

https://babylonbee.com/news/man-struggling-to-feed-family-just-glad-he-could-help-bail-out-bank

https://texasbreaking.com/2023/03/silicon-valley-bank-73-million-donated-to-black-lives-matter-is-it-the-reason-why-banks-collapse/

Silicon Valley Bank offered nearly $73 million to Black Lives Matter-related social justice organizations in the years preceding its failure, while Signature Bank gave $850,000. A database maintained by the conservative Claremont Institute reveals that SVB contributed over $73,450,000 to the movement and other social justice organizations in an effort to improve its Environmental, Social, and Governance grade. In the meantime, New York-based Signature Bank gave a total of $850,000 over the course of several years prior to its failure on Sunday.

From https://dc.claremont.org/blm-funding-database/

https://www.svb.com/globalassets/library/uploadedfiles/dei-at-svb_october-2020.pdf
https://www.svb.com/globalassets/library/uploadedfiles/content/corporate/2021-proxy-statement.pdf
https://www.svb.com/globalassets/library/managedassets/pdfs/svb_csr-2020-report_092220_digital_final.pdf
https://www.svb.com/globalassets/library/uploadedfiles/wef-index.pdf
https://www.svb.com/globalassets/library/uploadedfiles/tcfd-report.pdf
https://www.svb.com/news/company-news/svb-financial-group-announces-$112.2-billion-community-benefits-plan
https://www.svb.com/globalassets/library/uploadedfiles/svb-corporate-responsibility-report-2021.pdf
https://www.svb.com/globalassets/library/uploadedfiles/wef-index-2022.pdf
https://www.svb.com/news/company-news/silicon-valley-bank-commits-to-$5-billion-in-sustainable-finance-and-carbon-neutral-operations-to-support-a-healthier-planet

I don't see any explicit mentions of donations to BLM, but do see a lot of wokeness.

Clearly SVB was emphasizing DIE over competence:

https://www.svb.com/about-us/living-our-values

Building a Culture of Diversity, Equity and Inclusion at SVB

https://www.svb.com/about-us/living-our-values/diversity-equity-inclusion

https://www.svb.com/globalassets/library/uploadedfiles/diversity-equity-and-inclusion-at-svb_january-2023.pdf

Patrick says

Clearly SVB was emphasizing DIE over competence:

https://www.svb.com/about-us/living-our-values

Building a Culture of Diversity, Equity and Inclusion at SVB

https://www.svb.com/about-us/living-our-values/diversity-equity-inclusion

https://www.svb.com/globalassets/library/uploadedfiles/diversity-equity-and-inclusion-at-svb_january-2023.pdf

#fuckingmorons

https://www.dailymail.co.uk/news/article-11854497/SVB-hired-woke-board-obsessed-diversity-invested-5BN-healthier-planet.html

Go woke go broke! SVB hired board obsessed with diversity, invested $5BN for 'healthier planet' and held month-long Pride celebration - but had NO chief risk officer for eight months last year
Silicon Valley Bank had an A rating for its Environmental, Social and Governance policies as it increased diversity and invested in sustainability startups
But for eight months last year, the bank did not have a chief risk operator
At the time, it was investing clients' money in low-interest government bonds and securities that saw their value fall when interest rates rose

A relative pointed out that no one seems able to document the "$73 million to Black Lives Matter-related social justice organizations" and that it's misinformation put out by Fox News. My response:

I can't find any confirmation of how much they gave to BLM, but it seems unlikely to me that they did not donate, given how openly woke they were:

https://www.svb.com/globalassets/library/uploadedfiles/diversity-equity-and-inclusion-at-svb_january-2023.pdf

I read a very convincing explanation of the psychology behind that here:

https://boriquagato.substack.com/p/the-glorification-of-sub-mediocrity

The point being that people in positions of great responsibility must be hired on competence alone, utterly without regard to race, not only for the protection of the public, but because discrimination in employment based on race is illegal, and because hiring based on race makes everyone rightly suspicious of the competence of minorities in positions of power.

Patrick says

and that it's misinformation put out by Fox News.

It wasn't "put out" by Fox, but by the organization you linked to above. If you search you'll see this story was picked up by the NY Post, UK Dailymail, Newsweek, every propaganda organization on the planet. So your relatives assertion, while correct about the SVB BLM connection being unproven, definitely belies their strong false paradigm world outlook, with all it's bullshit close-mindedness.

.

from USA Today

"Ohio's State Teachers Retirement System took the biggest hit losing $27.2 million. But that's just 0.03% of its portfolio."

.

Patrick says

The point being that people in positions of great responsibility must be hired on competence alone, utterly without regard to race, not only for the protection of the public, but because discrimination in employment based on race is illegal, and because hiring based on race makes everyone rightly suspicious of the competence of minorities in positions of power.

this is where ESG (environmental, social and governance) comes into play and controls how the company operates ... most are going full Woke because of pressure and also to buy favoritism from the angry left (i.e, Democrats) ...

going ESG is like protection money ... you won't see an Al Sharpton or Jesse Jackson boycotting it... you won't see the NY Times hit pieces against it... you won't see AntiFa firebombing one of its buildings....

.

Kind of like the BLM signs in stores that didn't want their windows smashed in riots.

"Nice window you have there..."

https://slaynews.com/economy/audit-firm-clean-bill-health-svb-signature-bank-days-before-collapse/

One of America’s leading audit firms, KPMG, is defending giving both Silicon Valley Bank (SVB) and Signature Bank a clean bill of health just days before they collapsed last weekend.

The banks imploded when customers rushed to withdraw their savings in panic-fueled bank runs.

The two banks collapsed shortly after their respective annual reports were certified by KPMG.

KPMG is one of the so-called “Big Four” accounting firms.

https://alexberenson.substack.com/p/capitalism-except-for-the-capitalists

Why do those seven words matter so much?

The reason that depositors started pulling money from Silicon Valley Bank last Thursday wasn’t because they suddenly woke up and decided Silicon Valley had a weird-looking logo. It was because Silicon Valley had lost huge amounts of money buying low-yielding Treasury notes and mortgage-backed securities.

Bonds carry two kinds of risk, credit and interest rate risk. (Bearer bonds carry a third kind of risk, that they will be stolen, ala Die Hard. But bearer bonds don’t really exist anymore.)

Credit risk is obvious - if a company goes bankrupt and can’t pay back a bond, it’s worthless, give or take. Interest rate risk is more subtle. Bond prices rise as interest rates fall and fall as rates rise.

For a person who owns a bond and just plans to hold it until it matures, interest rate risk doesn’t matter much.

But for a bank, interest rate risk matters hugely.

A bank takes money from depositors and uses it to make loans or buy bonds (or other, more esoteric financial instruments). If the depositors want their money back, the bank has to give it to them. If it has to get that money by selling bonds when their value has dropped because interest rates have risen, it will lose money. A bond for which it paid $100 might only be worth $90.

But not to the Federal Reserve.

The Federal Reserve just told the world that it will pretend that a bond which is really only worth $90 is actually worth $100 - “par.” That’s what “these assets will be valued at par” means.

This program is similar to the way the Fed started to bail out banks in 2008, when it bought mortgage-backed securities that no one else would. That program, like this one, was supposed to be a temporary response to a crisis that threatened to destroy much of the banking system.

How’d that work out for us? Before the banking crisis of 2008, the Fed had under $1 trillion in assets. In bailing out banks that fall, it more than doubled the size of its balance sheet - to over $2 trillion.

Today the Federal Reserve has over $8 trillion in assets - loans and bonds that it has taken from banks (and since Covid, from companies directly). It is a larger and more crucial backstop to the banking system than it was 15 years ago.

For a long time, all that extra help didn’t seem to matter. Yes, interest rates were artificially low, mightily benefitting to the richest people in the world - on Wall Street and in Silicon Valley. But inflation was also low.

In 2021, though, the bill came due. Inflation suddenly spiked, and it has stayed high since.




To get inflation under control, the Federal Reserve has had no choice but to raise interest rates - and even more importantly, to reduce the size of its balance sheet and thus the amount of money in the banking system.

But the interest rate increases have caused a massive problem for banks. Over the last decade, they grew addicted to paying nothing - as in zero percent interest - on more deposits than they knew what to do with. They parked the money in Treasury notes and other low-risk bonds.

Low credit risk, that is. Those bonds had interest-rate risk like all the others. And when the Fed began to raise interest rates, they lost value. Some banks did a better job managing that risk than others, and - coming back to last week - Silicon Valley Bank did a particularly bad job.

As of last week, the bonds that Silicon Valley held were worth about $16 billion less than it had paid for them.

Coincidentally, Silicon Valley’s entire equity capital base - all the money it had to backstop depositors against all losses - was also about $16 billion. Thus Silicon Valley was effectively broke before the run on its deposits started.

The only question was who would get out whole and who wouldn’t. ...

What happens next? Where and how does all this end? I don't know. But it WILL end. Eventually these excesses will have to be unwound, gradually or suddenly. When they are, you can bet that all the people who have made fortunes from cheap cash for the last 15 years will be reaching into someone else’s pockets to save themselves - just as they did over the weekend.

And the only pockets left will be the federal government’s.

In other words, yours.