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

[MJ DeMarco]

https://twitter.com/i/web/status/1634850919555932160

View: https://twitter.com/GrahamStephan/status/1634850919555932160?s=20

https://twitter.com/i/web/status/1634385155061084161

View: https://twitter.com/CapaTosta122/status/1634385155061084161?s=20

https://twitter.com/i/web/status/1634904598409277440

View: https://twitter.com/Reuters/status/1634904598409277440?s=20

 

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[loop101]

SVB is on the top right. Not very big, but systemic collapses always start with something that should not have been able to bring down the system.

 

[NeoDialectic]

https://twitter.com/i/web/status/1634850919555932160

View: https://twitter.com/GrahamStephan/status/1634850919555932160?s=20

https://twitter.com/i/web/status/1634385155061084161

View: https://twitter.com/CapaTosta122/status/1634385155061084161?s=20

https://twitter.com/i/web/status/1634904598409277440

View: https://twitter.com/Reuters/status/1634904598409277440?s=20

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... -

 

[Subsonic]

https://twitter.com/i/web/status/1634850919555932160

View: https://twitter.com/GrahamStephan/status/1634850919555932160?s=20

https://twitter.com/i/web/status/1634385155061084161

View: https://twitter.com/CapaTosta122/status/1634385155061084161?s=20

https://twitter.com/i/web/status/1634904598409277440

View: https://twitter.com/Reuters/status/1634904598409277440?s=20

I'll call a big domino effect. Silvergate happened as well recently. Lucky for me german banks never crash xd.

 

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[MJ DeMarco]

Regulators close New York's Signature Bank, citing systemic risk

www.cnbc.com

Oddly, the S&P Futures are higher.

 

[ZackerySprague]

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]

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.

 

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[loop101]

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]

Yellen bails them out.

BREAKING: U.S. Treasury To Back Silicon Valley Bank Deposits - Breaking911

Washington, DC — The following statement was released by Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg: Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our...

breaking911.com

 

[Vigilante]

https://twitter.com/i/web/status/1634850919555932160

View: https://twitter.com/GrahamStephan/status/1634850919555932160?s=20

https://twitter.com/i/web/status/1634385155061084161

View: https://twitter.com/CapaTosta122/status/1634385155061084161?s=20

https://twitter.com/i/web/status/1634904598409277440

View: https://twitter.com/Reuters/status/1634904598409277440?s=20

Beware of the Ides of March. - William Shakespeare

 

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[JordanK]

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!

 

[loop101]

Bill Ackman explains the government did the right thing, and only bailed out the depositors. Futures are still up. Considering Forbes named SVB one of the Top 5 banks about a week ago, it seems premature to think everything is fixed now.

https://twitter.com/i/web/status/1635109889302315008

View: https://twitter.com/BillAckman/status/1635109889302315008

 

[Vigilante]

https://twitter.com/i/web/status/1634850919555932160

View: https://twitter.com/GrahamStephan/status/1634850919555932160?s=20

https://twitter.com/i/web/status/1634385155061084161

View: https://twitter.com/CapaTosta122/status/1634385155061084161?s=20

https://twitter.com/i/web/status/1634904598409277440

View: https://twitter.com/Reuters/status/1634904598409277440?s=20

 

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[loop101]

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

 

[JordanK]

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]

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]

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.

 

[Antifragile]

https://home.treasury.gov/news/press-releases/jy1337

 

[loop101]

Patrick Boyle is one of the smartest YT commentators on finance and trading. He occasionally slips in some sardonic humor in to his dead-pan deliveries. Here are his comments on SVB.

View: https://www.youtube.com/watch?v=GdfYnqyu7v8

 

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[AllenCrawley]

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:

Silicon Valley Bank (SVB) FAQ

On Friday March 10, 2023, the United States (U.S.) Federal Regulators shut down the Silicon Valley Bank (SVB). You can use this FAQ to help you navigate changes to your business that resulted from the bank shut down.

help.shopify.com

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

Etsy begins processing seller payments via alternative partners after delays caused by SVB implosion

Etsy is starting to process payments via its other payment partners this morning following the collapse of Silicon Valley Bank.

techcrunch.com

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.

 

[loop101]

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.

Privatizing Profits and Socializing Losses Definition

Privatizing profits and socializing losses recognizes company earnings as shareholder property and losses as the responsibility of society.

www.investopedia.com

 

[Skroob]

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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[TheLearner]

Credit Suisse next to fall? Silicon Valley Bank stock sales probed as Credit Suisse failure predicted – latest

 

[YanC]

Credit Suisse next to fall? Silicon Valley Bank stock sales probed as Credit Suisse failure predicted – latest

That would be a hell of a different story than SVB. Credit Suisse is a systemic bank. As are Deutsche Bank and UniCredit. From their 2007 top, these are respectively down 98%, 89% and 92%. I would love to have a look at what they are holding in their balance sheet... Must be quite a thing to see !

 

[MJ DeMarco]

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]

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.

 

[loop101]

Moody's is downgrading their ranking for the entire US banking system to "Negative".

Moody's cuts outlook on U.S. banking system to negative, citing 'rapidly deteriorating operating environment'

The firm, part of the big-three rating services, said it was making the move in light of key bank failures.

www.cnbc.com

 

[thechosen1]

Regulators close New York's Signature Bank, citing systemic risk

www.cnbc.com

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]

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:

KPMG in the spotlight over Silicon Valley Bank, Signature Bank audits

Erik Gordon, professor at the University of Michigan’s Ross School of Business: 'The timing is spectacularly embarrassing for KPMG'

www.fnlondon.com

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

SVB had no risk chief through much of 2022, proxy statement shows

Last year, Silicon Valley Bank’s risk committee doubled the number of meetings it held, suggesting board-level concern over the bank’s financial position.

www.bankingdive.com

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]

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.