patrick.net

If I where a realtor I'd tell you it's a great time to buy! Unless you're holding, then it's a great time to sell! Brokers and real estate agents have a lot in common...

HeadSet says

NuttBoxer says

The market halted trading on three bank stocks Friday. Monday could be a bloodbath.

Buying opportunity?

HeadSet says

NuttBoxer says

The market halted trading on three bank stocks Friday. Monday could be a bloodbath.

Buying opportunity?

If there is no contagion there could be a strong rebound rally by end of week. Even intra day Fruday there was a larger rebound.

The AP is running stories telling us not to worry about SVB. THAT in itself should be cause for concern. Then there's this:

SVB International Fallout: UK and EU Lenders Lose £30 Billion Overnight as ‘Panic’ Spreads
https://www.breitbart.com/europe/2023/03/11/svb-international-fallout-uk-and-european-lenders-lose-30-billion-overnight-as-panic-spreads/

This may not be the card that brings down the entire house, but eventually, this shaky global economic house is going to collapse. It's at that point that the elite planners of the world will roll out their Great Reset, whereby, 'you'll own nothing and be happy.' After the kill-off from the 'vaccine,' I wonder how many of us will be left?

stfu says

Fannie Mae is considering letting realtors do appraisals

Candidate for worst idea ever.

WookieMan says

I'm in a very good position to suck up properties IF there's a crash. Not happening in my market and I like to be hands on, so no management company for properties 1k miles away. I know RE investors do it, but I couldn't remotely. USVI vacation rental would be one option though because I can write off the travel to go there. He changes his damn user name but the guy with the condo? in Hawaii that recently move to Texas. Vacation and reducing taxable income with travel to "check" on the property.

This is the name I've mainly used for the past 13 years. I've changed it temporarily a few times during what seemed to be peak clown world or to effe with religious nuts. Same picture for nearly that time as well. I picked it because I'd always figured I wasn't going to stay in CA and now that I'm back in TX I should probably change it to passed through or something.

In any event, I managed SFHs in TX from CA for 10 years, but now I'm only several miles away. Just need to get a good property manager. It's been 6 years since I've been doing it entirely on my own for Hawaii. If you decide to do it know that you can only spend 14 days/year at your vacation rental or your 100% deductions drop to 50%. Also, I'm not sure the virgin islands has the kind of support you'd need like I get in HI. The cleaning company I use is top-notch and priced fairly and came from the hotel industry there. You need reliable resources like that or you wind up fucking over guests and getting bad reviews. Also HI gets LOTS of visitors so I'm able to keep it fully booked 3-4 months out year around. I charge nightly rates, cleaning and taxes. Of that I keep only about 1/3rd after all is said and done.

Unrelated but related to this thread: The company I work for had $ in SVB. Apparently about 50M and ~10% of what we have. I'm concerned because we are not profitable. It's a disruptive biotechnology so we've been focused on expansion and taking over markets (quite successfully) instead of profit. We did switch to profit seeking 3 quarters ago and are doing a great job each quarter. However it'll still be 2-3 years before we make it and so I'm definitely concerned I'll be laid off over this.

Lots of Liberals clamoring for the government to backstop the deposits or it'll be a catastrophe for the start-ups.

Funny that they let the oil patch kids basically go to hell during Covid.

I think that the government will follow the law with regards to deposit insurance. No bailouts or bail-ins. If they try to sell the loan book off quick, they ain't gonna get anywhere what it's listed for on the books. It is just not a good time to loan start-ups coin.

Here's what the lead exec on Risk Management was most focused on at SVB

Jay Ersapah
Not just another pretty white girl she's:
*Queer
*Person of Color
*1st Generation Immigrant
*Working Class Background

Had to hire her (xir?) for winning intersectional bingo. Unfortunately she gave priority to "woke" issues and just threw all the money into long-term bonds so it was less work to manage.

https://www.youtube.com/watch?v=eqgXGMAS__M

AmericanKulak says

Here's what the lead exec on Risk Management was most focused on at SVB

yep, i read about her at https://www.dailymail.co.uk/news/article-11848705/Woke-head-risk-assessment-Silicon-Valley-Bank-accused-prioritizing-diversity-issues.html

this scares me as i wonder if the entire USA from pentagon to hospitals to innovation centers are beyond repair with this dysfunctional culture and the chicoms are just waiting for (and aiding) the USA to implode

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Silicon Valley Bank is a Poster Child for the region.

I spent my four decades career in the trenches of tech, in bleeding edge technology. I grew up in the region that became known as "Silicon Valley".
To my thinking, folks like richwicks and Patrick himself are newcomers. There's a slew of patents with my name on them, about a third of those as lead inventor. I am retired now, but members of my nuclear family are employed at some of those household name outfits, including in (senior) leadership positions. I share those personal tidbits not to boast, but for perspective for my next remark:

Silicon Valley Bank is a Poster Child for the region, and for finance about our region. I've been skeptical for decades about the hooplah. Chickens coming home to roost and all that. It's the reason, for my whole adult life, I only use "Silicon Valley" as a Pejorative.

IMO there's also a 50% chance that somebody will buy it and guarantee/return most funds, with the help of regulators/taxpayers. You know how this works by now ;)

RayAmerica says

It's at that point that the elite planners of the world will roll out their Great Reset, whereby, 'you'll own nothing and be happy.' After the kill-off from the 'vaccine,' I wonder how many of us will be left?

Except that they aren't anywhere close to ready, and cannot stop the train wreck. Their arrogance will be their undoing.

Agree that another bankster bailout would be a travesty.

BayArea says

Agree that another bankster bailout would be a travesty.

It depends on what you mean by bankster bailout. Do you consider seizure by the state and liquidation by FDIC as a bailout travesty?

B.A.C.A.H. says

BayArea says

Agree that another bankster bailout would be a travesty.

It depends on what you mean by bankster bailout. Do you consider seizure by the state and liquidation by FDIC as a bailout travesty?

No, this would be the system working as designed.

Patrick says

stfu says

Fannie Mae is considering letting realtors do appraisals

Candidate for worst idea ever.

Why, what would change? All the properties sales/buys I did and all that I know about had the appraisal come in at exactly the asking price. So, in a sense the realtor sets the appraisal anyway. The reason for the appraisal to equal asking price is because if the appraisal is below the asking price it will anger the realtor, while if the appraisal is above the asking price it will anger the banker who wants to prevent money down issues.

mell says

IMO there's also a 50% chance that somebody will buy it and guarantee/return most funds, with the help of regulators/taxpayers. You know how this works by now ;)

yeah i know a very uppity white liberal who was all for giving mortgages to anyone ...

then the housing crash occurred unsurprisingly and he buys a townhome for $115,000 that sold for $270,000 about three years prior ... and he gloats how great of an investor he is...

i think this time there won't be panic and fire sales ... i like how the government took over silicon valley bank quickly in order to avoid a panic sale of their assets at basement prices... i see silicon valley bank getting slowly liquidated so that uninsured deposits only lose at most 15% ....

i remember back around 2008 how some banks were sold off in a panic and many exploited that... this time around, I don't see this happening with banks nor with the housing market as well

B.A.C.A.H. says

I share those personal tidbits not to boast, but for perspective for my next remark:

Even if it was a boast. You experienced it. Journalist don't 9 out of 10 times. I'd take your word for it before the media honestly. If you have patents that you were the lead on, good on you. Anecdotal evidence is MASSIVELY more valuable than what the media puts out. I don't come here for regurgitated news sources that knowingly lie.

mell says

IMO there's also a 50% chance that somebody will buy it and guarantee/return most funds, with the help of regulators/taxpayers. You know how this works by now ;)

Interestingly, my buddy who works for the Federal Reserve said the same thing earlier today.

Patrick says

WookieMan says

She has $1M in cash sitting in the bank.

That's crazy. At the very least she should split it among 4 institutions so that it's all FDIC insured. I think you can even have $250K insured per account at the same institution, but multiple institutions sounds safer to me.

WookieMan says

I'm going to suggest she gift the money $250k to my sister and $250k to me

Beware of gift tax on anything over $10K. Used to be $10K anyway. The giver has to pay the tax just to give the money away, iirc.

not one per account. its per account type. so 1 checking, 1 savings total of 500k insured. add spouse to accounts and its double insurance.

if you need more you can pay for more insurance, its cheap btw.

WookieMan says

B.A.C.A.H. says

I share those personal tidbits not to boast, but for perspective for my next remark:

Even if it was a boast. You experienced it. Journalist don't 9 out of 10 times. I'd take your word for it before the media honestly. If you have patents that you were the lead on, good on you. Anecdotal evidence is MASSIVELY more valuable than what the media puts out. I don't come here for regurgitated news sources that knowingly lie.

This.

I think the pull of "Experts" who often aren't experts, or having those 'expert' voices amplified by media, is getting old.

Wisdom is listening to those who have been there, and at least putting it in the brain file for consideration when necessary.

https://www.charlotteobserver.com/news/business/banking/article272975790.html

Wells Fargo apologizes, pledges fix to computer glitch and incorrect account balances

Wells Fargo promised to fix by Saturday a nationwide computer glitch that left irate customers with incorrect — and sometimes negative — balances and missing transactions, according to a spokesman. It will also refund fees customers incurred because of the issue. Some customers started their Friday morning routines hoping to see their latest paychecks directly deposited in their accounts. Instead, they had negative balances, a number of customers reported on social media, and a message from the bank: “If you see incorrect balances or missing transactions, this may be due to a technical issue and we apologize. Your accounts continue to be secure and we’re working quickly on a resolution.”.

https://www.dailymail.co.uk/news/article-11846823/Fears-Silicon-Valley-Bank-collapse-hit-Republic-Bank.html

Fears Silicon Valley Bank collapse could topple First Republic Bank next, as shares slump 40% in a month and investors voice concerns over losses on its investments
Silicon Valley Bank was taken over by the government on Friday morning - the largest bank failure since Washington Mutual's fall in 2008
The bank's demise is a combination of a difficult economic environment and rising interest rates: it remains to be seen whether a savior can be found
Now investors are concerned about First Republic Bank, whose share price plummeted 50 percent on Friday

.

From what I could tell most of the executives at Silicon Valley Bank (SVB) were flunkies from other banks, and I did not see within the SVB executive ranks any alum from Goldman Sachs or Morgan Stanley

Nor did I see any Wharton business school grads

Seems like SVB got the B-listers and Woke brigade for their management

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Isn't this going to make people less likely to buy mortgage backed securities?

I'd think that this would, at the very least make MBS's less desirable and therefore make mortgage rates higher.

Plus the dump of MBS on the market just from SBV

I've heard a ton of overblown BS over the last 3-4 years now. Hard to believe ANYTHING bad is going to happen.

I'm sorry, folks, but we'll have to bail SVB out, because HARRY & MEGHAN HAD ALL THEIR MONEY THERE!!!! HAVEN'T THEY SUFFERED ENOUGH ALREADY?!!!

The bank employees were inept, but there was a chain of events which also contributed.
Congress was spending too much money so it borrowed money by selling debt/bonds/IOUS.
The US Treasury sells them.
The Federal Reserve bought a LOT of them; everyone was concerned that if they flooded the market (worldwide) with bonds they would get bought for less.
The difference between the price a bond gets at the auction and it's face value=the "interest".
Then, the Federal Reserve started selling some of them off to banks.
Then, bank regulators wanted banks to own some "safe bonds".
Then, the Federal Reserve started raising interest rates quickly; this caused the bonds the bank now owned to lose value.
I experienced this myself; I own a couple funds which contain bonds of various types and the accounts have fallen although I don't need cash so I keep collecting the interest.
The bank which is not careful will need to sell something to pay depositors their money and evidently the house of cards collapsed.

clambo says

The bank employees were inept, but there was a chain of events which also contributed.
Congress was spending too much money so it borrowed money by selling debt/bonds/IOUS.
The US Treasury sells them.
The Federal Reserve bought a LOT of them; everyone was concerned that if they flooded the market (worldwide) with bonds they would get bought for less.
The difference between the price a bond gets at the auction and it's face value=the "interest".
Then, the Federal Reserve started selling some of them off to banks.
Then, bank regulators wanted banks to own some "safe bonds".
Then, the Federal Reserve started raising interest rates quickly; this caused the bonds the bank now owned to lose value.
I experienced this myself; I own a couple funds which contain bonds of various types and the accounts have fallen although I don't need cash so I keep collecting the interest.
The bank which is not careful will need to sell something to pay deposit...

They also were allowed to not mark these bonds to market if they claimed the intent to hold to maturity.

clambo says

The bank which is not careful will need to sell something to pay depositors their money and evidently the house of cards collapsed.

It will unfold and we'll probably never find out the truth. Given the name of the bank and a 78% drop from peak of crypto, methinks that has something to do with it. People lost their asses on crypto and they needed to pay actual bills with actual money. They couldn't loan out and make a profit anymore because these startups were too intertwined with crypto and started pulling out deposits.

I don't claim to know the bond shit or other banking talk. But it makes sense people put a ton of money in crypto that it would go to the moon forever, put $10M into crypto that then went to $3M, only had $5M in cash and had to cover their losses. Pulled deposits and the bank can't lend/borrow from the Fed. The question is how much is wiped out? I never even knew SVB existed. It's not like BOA or Chase in flyover country. Seems like a massive regional bank, so losses are going to hit that region bigly.

This seems like a bank that just had too much $$$ wrapped up in businesses that generally don't cashflow that made risky bets on crypto because it was hip and was appreciating. Just like buying 3-4 houses was hip in 2005 because you could.

I don't think it moves the rest of the country much though if we're being honest.

Supposedly Megan and Harry, as well as Oprah had a bunch of money in SVB.

Apparently SVB was without a chief risk manager for the past 9 months. Meaning there was supposed to be someone over wokie, but there wasn't.

Yellen said they won't bail out. Won't or can't...

Also, executives sold millions in stock before the collapse. Didn't realize insider trading is now legal...