|
|
03-12-2023, 11:45 AM
|
#201
|
Thinks s/he gets paid by the post
Join Date: Aug 2009
Posts: 1,577
|
Quote:
Originally Posted by Freedom56
|
Depends what she means by bailout. There’s no agreed definition.
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
03-12-2023, 11:50 AM
|
#202
|
Thinks s/he gets paid by the post
Join Date: Jan 2013
Location: SoCal, Lausanne
Posts: 4,408
|
Face the Nation on CBS is reporting that tech companies are being told in emails by VC partners to pull money out of regional banks and open accounts and deposit funds at the big four banks.
|
|
|
03-12-2023, 12:06 PM
|
#203
|
Full time employment: Posting here.
Join Date: Mar 2019
Posts: 749
|
Quote:
Originally Posted by Freedom56
Face the Nation on CBS is reporting that tech companies are being told in emails by VC partners to pull money out of regional banks and open accounts and deposit funds at the big four banks.
|
Just what we need. More bank runs. Just what I would expect from Vulture Capitalists. The administration should declare a bank holiday to prevent this from happening. Most of these banks will be fine unless there is a run on their assets.
|
|
|
03-12-2023, 12:06 PM
|
#204
|
Full time employment: Posting here.
Join Date: Jan 2013
Posts: 616
|
Quote:
Originally Posted by marko
Please remind him that he still owes me $20 on that bet I won from him!
|
But that would mean that Powell would have to print another $20 out of thin air and that might cause the inflation to go up.
|
|
|
03-12-2023, 12:09 PM
|
#205
|
Thinks s/he gets paid by the post
Join Date: Jan 2013
Location: SoCal, Lausanne
Posts: 4,408
|
Quote:
Originally Posted by bmcgonig
Depends what she means by bailout. There’s no agreed definition.
|
I can't see a scenario where account holders who exceeded the FDIC limits will be made whole. That did not happen in 2008/2009. I can't see treasury infusing capital and making SVB a viable bank again. The assets SVB are holding are safe treasuries but they never counted on the duration risk in a rising rate environment. While most individual investors would never lock 1.79% for 10 years or 1.25% for 30 years, it's pretty tragic that a Bank would lock tens of billions in low coupon debt without interest rate hedges at those long durations. These were not exactly low wage employees making those decisions.
|
|
|
03-12-2023, 12:17 PM
|
#206
|
Recycles dryer sheets
Join Date: Dec 2016
Location: New England
Posts: 357
|
Quote:
Originally Posted by underwrite
Say the baby boomers that have gotten the country into 30 trillion dollars in debt. Current and future generations thank you.
|
Well I’m not a boomer so doesn’t apply to me. And I’m quite certain we’ll be in debt way after I’m gone. Socialist utopia and all. 🤷🏼*♂️
|
|
|
03-12-2023, 12:18 PM
|
#207
|
Full time employment: Posting here.
Join Date: Jan 2013
Posts: 616
|
Quote:
Originally Posted by pb4uski
I disagree. If you have raised $10, $30 or $50 million then you sould be able to afford a decent CFO who would know enought to assess the risk. To me this goes to prove that brokered money market funds are safer than bank deposits in excess of the FDIC limit. With the former, at least there are rules that result in prudent asset/liability matching via the various don't break the buck rules. As we now know and should have known, deposits in excess of the FDIC limit are at risk. Besides, there are products out there where you have you money deposited at one bank but the underlying deposits are spread out to stay within the FDIC limits.
NFW we taxpayers should be guaranteeing deposits greater than $250k or bailing out depsositors who ignored the coaverage limits.
Now all of that said, I think that many of the uninsured depositors will be made whole or close through the runoff of SVB's assets after then insured depositors are paid.
|
I would argue that the $250k FDIC limit should be raised or at least be indexed to inflation. $250k in 2011 (when the limit was permanently raised) is not the same as $250k today.
|
|
|
03-12-2023, 12:19 PM
|
#208
|
Full time employment: Posting here.
Join Date: Mar 2019
Posts: 749
|
Quote:
Originally Posted by Freedom56
I can't see a scenario where account holders who exceeded the FDIC limits will be made whole.
|
Me either but stranger things have happened. In order for that to happen Congress would have to change the law that governs the FDIC which is not at all likely to happen. The FDIC cannot simply decide to hand out money over the $250K limit.
|
|
|
03-12-2023, 12:23 PM
|
#209
|
Thinks s/he gets paid by the post
Join Date: Jan 2013
Location: SoCal, Lausanne
Posts: 4,408
|
Janet Yellen on Face the Nation.
|
|
|
03-12-2023, 12:23 PM
|
#210
|
Thinks s/he gets paid by the post
Join Date: Aug 2009
Posts: 1,577
|
Quote:
Originally Posted by jldavid47
Just what we need. More bank runs. Just what I would expect from Vulture Capitalists. The administration should declare a bank holiday to prevent this from happening. Most of these banks will be fine unless there is a run on their assets.
|
They’re right. What else can they do. No one in their right mind will leave uninsured money with regionals now unless the FDIC number is raised Sunday night for all except SVB.
There were quite a few VC’s on Wednesday or Thursday that said they were not going to take their money out. Then there were the Peter Thiels who did. Who looks smart now? And I have no love for Thiel.
|
|
|
03-12-2023, 12:45 PM
|
#211
|
Recycles dryer sheets
Join Date: Mar 2022
Posts: 72
|
No bank including big 4 could stand a 25% runoff in 2 days. Nor is there need to have that.
This is now vulture’s circling. They are most like shorting like crazy.
|
|
|
03-12-2023, 12:45 PM
|
#212
|
Recycles dryer sheets
Join Date: Oct 2007
Location: Georgetown
Posts: 423
|
Now they are telling about a form of bailout; i.e., make depositors whole. Report is that will support the other small and regional banks. A lot of horse crap to me. If no buyer steps forward it means that there is nothing worthwhile to buy and SVB should follow in the footsteps of Enron and others that have conducted gross fiscal mismanagement.
Marc
__________________
"Adventure is just bad planning"
Roald Amundsen
|
|
|
03-12-2023, 12:57 PM
|
#213
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2011
Posts: 8,362
|
Quote:
Originally Posted by Spock
A very short stroll through FB this morning implies that tomorrow/next week is going to be a $h!+ show. Everybody and their dog is moving their money from "little" bank A (SVB was the 15th? largest bank) to big bank B. Sounds benign but that is a run on the little banks. SVB is just the fuse.
Who's placing bets on another Black Monday and a banking holiday by Weds/Thurs in celebration of St. Patricks Day?
|
So...........I read this as a "buying opportunity" coming in the next three or six weeks. Wait for the smoke to clear in the next two weeks and then go shopping?
I did quite well three years ago this month during the Covid dip.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
|
|
|
03-12-2023, 01:18 PM
|
#214
|
Full time employment: Posting here.
Join Date: Jun 2014
Posts: 518
|
Quote:
Originally Posted by Freedom56
I can't see a scenario where account holders who exceeded the FDIC limits will be made whole. That did not happen in 2008/2009. I can't see treasury infusing capital and making SVB a viable bank again. The assets SVB are holding are safe treasuries but they never counted on the duration risk in a rising rate environment. While most individual investors would never lock 1.79% for 10 years or 1.25% for 30 years, it's pretty tragic that a Bank would lock tens of billions in low coupon debt without interest rate hedges at those long durations. These were not exactly low wage employees making those decisions.
|
This is what I don't even understand. Even I knew that I wanted to shorten my duration, because I knew that interest rates were rising, so I kept half my fixed income bucket in money market funds, despite very low interest rates.
It seems to be that they got greedy and/or they needed to keep up their projected net interest income so they purchased longer term bonds.
The treasury and fed should look at the balance sheet of the individual banks and see how much interest rate risks they hold, before they raise interest rates more.
|
|
|
03-12-2023, 01:25 PM
|
#215
|
Thinks s/he gets paid by the post
Join Date: Feb 2021
Posts: 2,328
|
Quote:
Originally Posted by luckydude
I would argue that the $250k FDIC limit should be raised or at least be indexed to inflation. $250k in 2011 (when the limit was permanently raised) is not the same as $250k today.
|
I was wondering that. I thought it’s been 250K for a long time. The government makes this same mistake over and over and over. They set a number and fail to add inflation indexing. So 10 or 15 or 20 years later, we’re still only allowed to put $2,000 in our IRAs as was the case for many years.
|
|
|
03-12-2023, 01:26 PM
|
#216
|
Full time employment: Posting here.
Join Date: Jun 2014
Posts: 518
|
Quote:
Originally Posted by marko
So...........I read this as a "buying opportunity" coming in the next three or six weeks. Wait for the smoke to clear in the next two weeks and then go shopping?
I did quite well three years ago this month during the Covid dip.
|
SBNY's put option for $65 strike price (current $70) now cost $17 for a 3 month option. It's going to be bloody on Monday.
I would not try to catch this falling knife quite yet. We should expect the big banks to go up, once the fear slowly goes away from the moving deposits.
|
|
|
03-12-2023, 01:30 PM
|
#217
|
Full time employment: Posting here.
Join Date: Jun 2014
Posts: 518
|
There is an easy, cumbersome fix. The fed cuts interest rates to 0 %. Do a risk assessment of bonds in all the banks balance sheet and identify those who are weak. Let them re-caliber for a rising interest rate environment and then slowly raise them again.
|
|
|
03-12-2023, 01:36 PM
|
#218
|
Recycles dryer sheets
Join Date: Oct 2007
Location: Georgetown
Posts: 423
|
Quote:
Originally Posted by Toocold
There is an easy, cumbersome fix. The fed cuts interest rates to 0 %. Do a risk assessment of bonds in all the banks balance sheet and identify those who are weak. Let them re-caliber for a rising interest rate environment and then slowly raise them again.
|
This is in jest, right?
__________________
"Adventure is just bad planning"
Roald Amundsen
|
|
|
03-12-2023, 01:42 PM
|
#219
|
Full time employment: Posting here.
Join Date: Jun 2014
Posts: 518
|
Quote:
Originally Posted by Marc
This is in jest, right?
|
Yes, correct.
I do think though that they should do a risk assessment on the balance sheet, very similar to 2008. This will at least given them visibility on how big the systematic risk there may be.
|
|
|
03-12-2023, 01:48 PM
|
#220
|
Administrator
Join Date: Apr 2006
Posts: 22,973
|
If I were looking to short, I might look at Ally. As of their December 31, 2022 10K ( https://d18rn0p25nwr6d.cloudfront.ne...4b69d8a58d.pdf), their unrealized losses on "available for sale" securities appear to be about 20% of their Tier 1 capital (compare the AFS delta 2021 to 2022 on page 117 to Tier 1 capital on page 101. (- $4 billion/$19.2 billion)
That is worse than SIVB, where unrealized AFS losses were about 10% of Tier 1 capital ( https://d18rn0p25nwr6d.cloudfront.ne...468971b386.pdf) (compare Footnote 3 on page 49 to Tier 1 capital on p.84 (-$1.7 billion/$17.5 billion)
The depositor profile between the two may be sufficiently different that it is not a problem, but it could drive the market on Monday.
Or I could be all wet in my interpretation of the numbers.
__________________
Living an analog life in the Digital Age.
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|