patrick.net

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...

NuttBoxer says

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

They said it was part of a plan which is usually legal, however if they changed that plan recently to sell or sell more they should be facing criminal charges.

NuttBoxer says

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

They don't need to. Bunch of startups affected, most people with bank accounts have less than 250k which is the insured amount. Sucks for them, but I'd never open a bank account with svb, they had nothing but negative news for years now and went full retard woke. Don't support woke businesses. Period

mell says

NuttBoxer says

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

They said it was part of a plan which is usually legal, however if they changed that plan recently to sell or sell more they should be facing criminal charges.

If they didn't violate the law as written then we need a better law. Can't charge people based on feelz.

Shopify and Roku will lose a bunch of money here as well.

Those MBS's that SVB will be liquidated at a heavily discounted rate so expect the balance sheets of those two companies to take a major haircut.

Suprised they arnt trying to push bailout or maybe they are and I havent seen it.

RWSGFY says

mell says

NuttBoxer says

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

They said it was part of a plan which is usually legal, however if they changed that plan recently to sell or sell more they should be facing criminal charges.

If they didn't violate the law as written then we need a better law. Can't charge people based on feelz.

Not sure if you're allowed to make changes to the plan on material information.

Without SVB or FTX, the Dems are going to need a bigger launderer for donations? Was SVB the conduit for DOD and DARPA funds to SiCoValley for all of the surveillance and propaganda strategies to be directed against the populace?

It seems like somebody is pulling the toothpicks out from under the support structures of the Ponzis. Which Ponzi is next, and when will The FED Ponzi collapse?

If they re-name it "Banco Cartel Internacional", then the Rockefellers will bail it out.

No one seems to be talking about this:

What about the derivatives? How many of these bad loans were used as collateral to make new loans, with this insane process being repeated into infinity?

With the size of SVB, this very well could be the colossal, weak link that breaks the financial chain.

Ceffer says

Without SVB or FTX, the Dems are going to need a bigger launderer for donations? Was SVB the conduit for DOD and DARPA funds to SiCoValley for all of the surveillance and propaganda strategies to be directed against the populace?

If I'm being honest I think it's just young gun, moronic Californian's, startup types and even bigger businesses that lost sight of the details that got burned on crypto as I've said. Lost a shitload on crypto and freaked that they "actually" had to run a business and drained their deposits from SVB. This is a basic bank run due to losses elsewhere. Basically venture capital got pissed away into crypto and not the business, yet they still held balances. Shit hits fan and they have to make payroll for mostly useless employees "hanging out" at work. Sell the crypto at a loss and pull money from SVB.

During the housing bust lenders would lend to purchase large parcels to developers with NO buyers. For a while they found the buyers. That stopped and there was then 15 months of inventory on basically worthless land and no buyers because FINANCING changed. Wasn't interest rates. This is a different type of bust. Convinced it's crypto. I don't think I'm wrong. I'll admit if I am, but we'll see as this unfolds.

Booger says

Shopify and Roku will lose a bunch of money here as well.

Those MBS's that SVB will be liquidated at a heavily discounted rate so expect the balance sheets of those two companies to take a major haircut.

They will likely not according to a buddy of mine who works for the Federal Reserve. Looks like all depositors will be made whole with the assets and equity SVB has on the book.

To protect the innocent, I had to blank out his name. Basically, FDIC will provide a backstop on the losses, IF ANY, to the buyer of SVB.

FDIC money is NOT taxpayers money. High probability all uninsured depositors will be made whole. I’m not an expert on this subject so I would prefer to listen to the people who work in the trenches rather than speculating.

https://www.youtube.com/watch?v=XVk_e31dnlE

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all of this liquidation of silicon valley bank is inside deal making to their ivy league educated friends

its just a lot more sophisticated form of back slapping good ole boys and legacy families in the florida panhandle

roll tide

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mell says

Don't support woke businesses. Period

Probably the best investing advice for an entire generation.

Hyperinflation's back on!

https://www.zerohedge.com/markets/svb-latest-developments-live-blog-fdic-auction-failed-svb-assets-underway

Bailout underway for all funds, futures spiking.

https://www.cnbc.com/2023/03/12/regulators-unveil-plan-to-stem-damage-from-svb-collapse.html

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Now the crypto friendly bank, Signature Bank, has been shut down by the government

https://www.coindesk.com/policy/2023/03/12/crypto-friendly-signature-bank-shut-down-by-state-regulators-fed/

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mell says

https://www.cnbc.com/2023/03/12/regulators-unveil-plan-to-stem-damage-from-svb-collapse.html

yep, the guvmint and federal reserve don't want a panic which results in panic or fire sale prices and shark investors coming in and buying pennies on a dollar

go back to washington mutual and see how it got sold off for a ridiculous low price ... just like housing sold for $270,000 and then 2 years later bought for $115,000 ...

no more exploited chaos resulting essentially in freebee's for those investors with cash ...

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Sometimes you just gotta print the money.

Someone on another thread asked "Why a country would need a Central Bank"?

They'll shore it up because DARPA shit in those SiCo Valley start ups.
\

PRAISE ALLAH, HARRY & MEGHAN SAVED FROM FINANCIAL RUIN AND WON'T NEED TO GIVE HAND JOBS FOR CASH!!!!

RWSGFY says

PRAISE ALLAH, HARRY & MEGHAN SAVED FROM FINANCIAL RUIN AND WON'T NEED TO GIVE HAND JOBS FOR CASH!!!!

They won't be forced to "Abandon their privacy" and do more Netflix Specials on Mental Health and tell crap stories about dumb sibling arguments from their childhood

.

Just checked Yahoo Finance page and S&P 500 futures still up. Looks like investors have confidence in there not being a banking and financial crisis.

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There is no match for the Fed bazooka, they'll just inflate their way out of this. Shorts already have made their money, it's very dangerous being short against the Fed

mell says

There is no match for the Fed bazooka, they'll just inflate their way out of this. Shorts already have made their money, it's very dangerous being short against the Fed

they'll keep the financial system propped up in order to keep the federal government solvent especially with debt to gdp ratio and debt service payments as a percentage of the federal government budget .... this allows the federal government to not have to enact drastic changes such as to entitlements

i agree as far as inflating out of a crisis as inflation is the tax ultimately for the middle and working class

i see the fed raising to 5.00% for the Fed Funds rate but no higher as they change their plan to go higher than 5.25% and they'll continue quantitative tightening

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https://rudy.substack.com/p/bill-ackman-personifies-everything

ad says

mell says

There is no match for the Fed bazooka, they'll just inflate their way out of this. Shorts already have made their money, it's very dangerous being short against the Fed

they'll keep the financial system propped up in order to keep the federal government solvent especially with debt to gdp ratio and debt service payments as a percentage of the federal government budget .... this allows the federal government to not have to enact drastic changes such as to entitlements

i agree as far as inflating out of a crisis as inflation is the tax ultimately for the middle and working class

i see the fed raising to 5.00% for the Fed Funds rate but no higher as they change their plan to go higher than 5.25% and they'll continue quantitative tightening

.

ad says

mell says

There is no match for the Fed bazooka, they'll just inflate their way out of this. Shorts already have made their money, it's very dangerous being short against the Fed

they'll keep the financial system propped up in order to keep the federal government solvent especially with debt to gdp ratio and debt service payments as a percentage of the federal government budget .... this allows the federal government to not have to enact drastic changes such as to entitlements

i agree as far as inflating out of a crisis as inflation is the tax ultimately for the middle and working class

i see the fed raising to 5.00% for the Fed Funds rate but no higher as they change their plan to go higher than 5.25% and they'll continue quantitative tightening

.

Agreed. I'm not for it but most countries of the world have embarked on a similar voyage, maybe at some point we have another economic system take over, but for the foreseeable future this is the MO. Plus it makes debt and debt to gdp relative if all countries are debtors of each other. It sucks for those without assets as it's continued devaluation of their currency/buying power, but most will take it over the fear of unemployment. It's very difficult to detach from this system or going Galt. But avoiding woke companies is not hard to do and is so worth it.