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

Anything related to investing, including crypto

MJ DeMarco

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NeoDialectic

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Im not an expert and this is just my off the cuff thoughts, but my 2c.....

I'm guessing the govt will go with the typical "rugged capitalism for the poor, socialism for the rich" option and help the bank and rich depositors. I have never seen so many libertarians completely and unironically flop on their positions online as I have seen this weekend. Of course they have their reasons of why their situation is different.....Don't we all!

I do empathize with the depositors though, as people don't exactly expect a large bank to go under. It's probably a good idea to revamp the FDIC system.....it's not realistic for bigger companies to have small balances, and regular checking accounts shouldn't be considered a risk asset. They probably need to raise their limits but charge either the depositor or bank for it....

- in regards to your exqct question, I would guess a nothingburger for systemic effects, but a big deal in the online community and those effected...especially since a big portion of those effected are the loud people online... -
 
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MJ DeMarco

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ZackerySprague

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I heard a few more banks were having trouble Silvergate and Signature Banks on a Twitter live call.

These were apparently banks that was apart of Crypto.
 

loop101

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SVB's impact on the USDC "stablecoin" has been telling. I've heard people say it was "impossible" for a stablecoin to lose value because it was pegged to the USD. I guess they didn't account for the bank taking their USD. Looks like it might recover via bailout.

1678661139449.png
 
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loop101

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I heard a few more banks were having trouble Silvergate and Signature Banks on a Twitter live call.

These were apparently banks that was apart of Crypto.
Silvergate folded on Monday. SVB folded on Friday.
 

loop101

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Yellen bails them out.

 

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JordanK

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Signature Bank failed a few hours ago.

Now a bailout is announced.

Will it all be a nothing or will it be wild!?!?

Tune in tomorrow to find out!
 

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JordanK

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European Bank Stocks getting hammered.
Credit Suisse (Switzerland)
UniCredit (Italian)
The two standouts.

Hour and a half till the real fireworks begin in New York.
 

socaldude

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The +1.5% gains seem to have evaporated. Monday should be interesting.

LOL at one point basically a VIX spike of 3 points while /ES was up 10 handles. That’s really rare.

The VIX futures curve flattened yesterday when Yellen spoke. Before that it looked…interesting.

The LIBOR interbank rates are not budging.
 
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Greg Behnke

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Counter-party risk of bank system failing is something most haven't considered. Many have woken up to that reality this weekend. This is why diversification of assets across assets classes.
 

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AllenCrawley

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For those with your websites on Shopify. I believe SVB is one of 12 banks that Shopify uses so they are not as exposed as I thought they may have been. However, take a read of the SVB Faq they put up:

Selling on Etsy? You may have already received an email about your deposits being on hold but looks like they found alternative processors:

Selling on Faire.com? Seems like everything will be ok (for now?) in receiving your deposits as they were able to transfer monies from SVB to JPMorgan Chase.
Screenshot 2023-03-13 at 1.22.14 PM.png
 

loop101

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I don't believe this crisis is over. You can't go from "These are the best banks in the world." to "Total financial collapse!!!" in 24 hours, and then back to "Never mind, everything is fine again.", without something or someone being fundamentally wrong.

I heard a phrase today that seems appropriate, "Privatizing profits, and socializing losses."
  • Privatizing profits and socializing losses is the consequence of allowing shareholders to benefit from company earnings while making society responsible for their losses.
 
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Skroob

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I don't believe this crisis is over. You can't go from "These are the best banks in the world." to "Total financial collapse!!!" in 24 hours, and then back to "Never mind, everything is fine again.", without something or someone being fundamentally wrong.
You can, when most of that is the extremist hyperbole narrative the media spits out to sell ads.

They were never the best banks in the world, they had fundamental lending issues that got revealed when the tide went out. It was never total financial collapse, because not all banks had that much exposure. Everything is not fine again, because the people who make all the major monetary policy decisions in the country world are going to keep putting their thumbs on the scales to try to "fix" things.

The thing that is fundamentally wrong is centralized control over money and monetary policy, and it doesn't seem likely to get any better. Best thing for us to do personally is insulate ourselves from it as much as possible. Don't keep all your eggs in one bank, don't keep all your money in one investment or currency or crypto token.
 
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YanC

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MJ DeMarco

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I wasn't worried until I just heard a politician say "The banking system is safe" -- now I'm worried.

Anything these F*ckers say cannot be trusted.
 
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socaldude

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I wasn’t expecting anything interesting to happen until maybe a year later. I figured that would be enough to “see” an impact on earnings and balance sheets.

But, let’s look at the facts. They haven’t even raised interest rates a whole lot and these banks already failed. That’s laughable and concerning. And they still haven’t brought inflation down. Cry me a freaking river.

My guess is this is indicative of a deeper issue in the financial banking sector where balance sheets where structured and engineered for 0% rates.

Also Barney Frank author of the Dodd-Frank act was on the board of signature bank. OMG LOL what a bunch of clowns.

I don’t trust the system and I don’t trust the information they give out on the media. These “people” are crooked and reckless and it never hurts to be prepared and skeptical.
 
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loop101

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Guest-5ty5s4

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Oddly, the S&P Futures are higher.
I know the gains disappeared already, but my (gloomy, dismal) take on this is that any time something bad happens in the economy, it is bullish, because it means the Fed is going to inject more liquidity to artificially prop everything up.

Because we don't have "rugged capitalism," we have monetary socialism. Everything below that just looks like capitalism.
 
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ZF Lee

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When one of the Big Four accounting firms gives SVB and Signature Bank the green light...and everyone
gets blindsided...you have to start wondering WHAT ELSE the accounting firms have missed on the other companies they audit:


SVB was also running without a risk officer for a long time:


You'd expect these to be simple, commonplace safety measures. But they were not kept in place.

I used to shake my head at the folks who say buy-and-hold is dead, but I am beginning to see why they might
think that way. How can you trust in fundamentals when the entire auditing system is F*cked?
 

Andreas Thiel

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The best argument for a nothingburger scenario so far has been that the SVB really might be different. If cryptocurrency exposure of startups was the main reason that led to problematic levels of withdrawals, then the same thing might not be happening at that many other banks!?

That is not my verdict, just something to think about.
 

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