The Entrepreneur Forum | Financial Freedom | Starting a Business | Motivation | Money | Success

Welcome to the only entrepreneur forum dedicated to building life-changing wealth.

Build a Fastlane business. Earn real financial freedom. Join free.

Join over 80,000 entrepreneurs who have rejected the paradigm of mediocrity and said "NO!" to underpaid jobs, ascetic frugality, and suffocating savings rituals— learn how to build a Fastlane business that pays both freedom and lifestyle affluence.

Free registration at the forum removes this block.

The SVB (Silicon Valley Bank) Failure, Nothingburger? Or More?

Anything related to investing, including crypto

Kevin88660

Platinum Contributor
FASTLANE INSIDER
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
118%
Feb 8, 2019
3,457
4,078
Singapore
We may have to change the title of this thread with Credit Suisse instead of SVB. Regulators, SNB and UBS are apparently negotiating to bail it somehow and prevent a disaster.

Credit Suisse is almost 3 times as big as Lehman Brothers was when it declared bankruptcy, almost 10 times bigger than SVB. It is also a systemic bank.

If there is no positive outcome before markets open, tomorrow may be an interesting day !
I am not too worried as they can just buy whatever that fails with unlimited cash that could be minted our of thin air.

Central banks have a lot of tools these days. They can even do targeted asset purchase, leaving interest rate high as it is now.

A lot people are speculating if companies are failing this will force Fed to ease. Not true, they can keep rates high while buying whatever that is too big to fail.


Bank of England started bond buying last year to save their own debt issue.

Easing and rescue for the “ICU patients”, tightening for everyone else to fight inflation.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.
Last edited:

Kevin88660

Platinum Contributor
FASTLANE INSIDER
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
118%
Feb 8, 2019
3,457
4,078
Singapore
Deflation is not a big problem. Because money can be printed to save whoever that is too big to fail.

Bankruptcy and companies going under due to insolvency and liquidity issue are all “deflationary problem” that can be solved easily with a Fed announcement.

The real power is inflation because it puts a cap on the limitation of Fed’s printing power. As Alan Greenspan summed it up “We can guarantee all liabilities but not their purchasing power”.

Centrals banks can do broad spectrum tightening to fight inflation while doing target spots “QE” to bail out entities in trouble. So companies going down is not a big issue.

Real issue is still inflation figures not coming down.
 
Last edited:

Xeon

All Cars Kneel Before Pagani.
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
191%
Sep 3, 2017
2,427
4,628
Singapore
Yes, probably we could update the thread title to '2008 Crisis 2.0' or something like that...

I'm a bit surprised though how fast they are arranging buyouts and stuff:

Not to forget the US higher-ups are consulting Warren Buffett AGAIN on supporting the banks:


This SOOO feels like the repeat of the aftermath of the 2008 crisis, and Buffett did profit handsomely for his
help back then. He came up with the idea of lobbing them cash, as opposed to buying their assets. Rather controversial, but when off-balance sheet items are exploding everywhere...are ya really gonna buy turds?



Assuming this is a repeat of the 2008 crisis but several times worse, do you suggest to withdraw cash from banks and keep the amount at home in case the collapses spread to other banks in the world?
 

Antifragile

Progress not perfection
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
453%
Mar 15, 2018
3,709
16,813
Deflation is not a big problem. Becauae money can be printed to save whoever is too big to fail.

Bankruptcy and companies going under due to insolvency and liquidity issue are all “deflationary problem” that can be solved easily with a Fed announcement.

The real power is inflation because it puts a cap on the limitation of Fed’s printing power. As Alan Greenspan summed it up “We can guarantee all liabilities but not their purchasing power”.

Centrals banks can do broad spectrum tightening to fight inflation while doing target spots “QE” to bail out entities in trouble. So companies going down is not a big issue.

Real issue is still inflation figures not coming down.

The real potential problem is Stagflation

In economics, stagflation or recession-inflation is a situation in which the inflation rate is high or increasing, the economic growth rate slows, and unemployment remains steadily high. It presents a dilemma for economic policy, since actions intended to lower inflation may exacerbate unemployment.

We aren’t there yet. And it looks like hyperinflation is more likely. If they keep printing USD to cover for bank systemic failures.

And the world reserve currency status is now at risk.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

Kevin88660

Platinum Contributor
FASTLANE INSIDER
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
118%
Feb 8, 2019
3,457
4,078
Singapore
The real potential problem is Stagflation

In economics, stagflation or recession-inflation is a situation in which the inflation rate is high or increasing, the economic growth rate slows, and unemployment remains steadily high. It presents a dilemma for economic policy, since actions intended to lower inflation may exacerbate unemployment.

We aren’t there yet. And it looks like hyperinflation is more likely. If they keep printing USD to cover for bank systemic failures.

And the world reserve currency status is now at risk.
Similar to oil shocks in the 70s now we have the war in Europe and global supply chain still recovering from pandemic crisis.

If supply side issue persists, even if we reduced demand through rate hike, inflation will stay, hence the phenomenon of stagflation could come. A lot of economic pain to trade off for a little drop in CPI.

Over the long term I think supply side induced inflation problem will go away. The countries that involved in the war will run out of ammunition/men real soon. War is a fact-finding process of how long both sides can sustain the pain.

China is looking to boost its economy now after the end of locked down. The global capacity for production is like a monster compared to the 70s. A few Chinese coastal cities can produce all the toys, clothes and furnitures in excess of global demand literally.

Dollar as the reserve currency will lose some market share to Rmb and gold. Euro and Yen are probably just as problematic.
 

ZF Lee

Legendary Contributor
EPIC CONTRIBUTOR
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
180%
Jul 27, 2016
2,840
5,113
25
Malaysia
Assuming this is a repeat of the 2008 crisis but several times worse, do you suggest to withdraw cash from banks and keep the amount at home in case the collapses spread to other banks in the world?
Depositors should be covered by the FDIC standard of $250,000.

Malaysia also has similar protections of RM250,000 coverage per depositor per member bank.
I see Singapore is around $75,000 per depositor per bank too?

Key here I think is to not keep all your eggs in one bank alone, as the startup folks who were deep in SVB found out.
 

Xeon

All Cars Kneel Before Pagani.
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
191%
Sep 3, 2017
2,427
4,628
Singapore
Depositors should be covered by the FDIC standard of $250,000.

Malaysia also has similar protections of RM250,000 coverage per depositor per member bank.
I see Singapore is around $75,000 per depositor per bank too?

Key here I think is to not keep all your eggs in one bank alone, as the startup folks who were deep in SVB found out.


In Singapore, it's $75,000 but I doubt the gov will have enough $ to cover everyone if there's a bank run lol.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

Kevin88660

Platinum Contributor
FASTLANE INSIDER
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
118%
Feb 8, 2019
3,457
4,078
Singapore
In Singapore, it's $75,000 but I doubt the gov will have enough $ to cover everyone if there's a bank run lol.
Government can always print to solve SGD-denominated debt problems if there are any.

But anyway Singapore banks are quite prudently run in general.

MAS (Sg central bank) has been raising the standard on TDSR for going back as early as 2016.

Never underestimate the SG Kiasi mindset that is permeated across large organizations. We build drainage size capable of defending once in a 50 years flood.
 
Last edited:

Post New Topic

Please SEARCH before posting.
Please select the BEST category.

Post new topic

Guest post submissions offered HERE.

Latest Posts

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Ideas needing execution, more!

Join Fastlane Insiders.

Top