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

[Everyman]

My crystal ball says:

This is all planned of course. The owners of the FED decide when, where and what they want to do with money supply. They know everything about every bank and balance.

That event led to the creation of the Fed. So if we do have a crash NOW, I wonder what is the NEXT institution folks
will come up with...

The plan is to create the CBDC, issued by the FED, take over other banks directly or indirectly, so everyone has their account with them and to control the digital fiat money supply (they cannot control physical money the same way hence we will see two systems in a couple of years, same as in communist countries).*

"Give me control of a nations money supply, and I care not who makes it’s laws" (Rockefeller or Rotschild?)

This is just a small step.

Depends. Because 20 years ago Hussain stopped using the FED dollar and started using EURO for oil payments. Look what happened in 2003. Same with Gaddaffi - he wanted to create a single African currency based on gold... same story. Only 2011. But look now - 2019 - 2023. More and more countries are moving away from the FED dollar to settle trade...

*But I heard stories from Sweden that they tried cashless there and ended up in disaster. Look India 2016. These are 'exercises'

 

[Andy Black]

Tried that as one of my first businesses. Way too saturated. Haha.

I know a guy who sells custom t-shirts. I think he spends over $700k/mth on Facebook Ads.

 

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[Kevin88660]

I don't think anyone really takes China, Russia, India or the Middle Eastern countries seriously as an alternative to American dominance. You know what you get with the Americans... everyone likes to give out about them but if you play within their rules you can be highly successful (i.e Ireland poaching a lot of their multinationals)

The Chinese Silk Road financing scheme has been revealed to be a debt trap play. China doesn't reveal accurate information about its economy, currency or in the case of the pandemic its health information.

The Russians are a gas station and arms manufacturer with not much else. They want to destroy the system completely not entice people to join theirs.

India isn't developed enough yet but could elevate themselves in years to come. They don't seem to want to rule over a system though and favor neutrality like a big Ireland.

Frédéric Pierucci - Wikipedia

en.m.wikipedia.org

 

[Xeon]

India isn't developed enough yet but could elevate themselves in years to come. They don't seem to want to rule over a system though and favor neutrality like a big Ireland.

They exert influence through their CEOs. Who do you think head many of America's big tech?

 

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[Kevin88660]

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 to buy 65 billion pounds of UK bonds to stem rout

The Bank of England stepped into Britain's bond market to stem a market rout, pledging to buy around 65 billion pounds ($69 billion) of long-dated gilts after the new government's tax cut plans triggered the biggest sell-off in decades.

www.reuters.com

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.

 

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[Antifragile]

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.

 

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[ZF Lee]

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.

 

[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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[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.

 

[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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[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

 

[TheLearner]

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

 

[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

 

[ZackerySprague]

View: https://www.youtube.com/watch?v=oHjDCC6Vigc

 

[Andreas Thiel]

I keep reading that it is a get woke, go broke story. Does anybody have more info about what exactly they did wrong?
Have not read of anything specific that says the greed was off the charts or that there was extreme negligence.
Just that startups withdrew a lot of money in a short amount of time. Was the whole premise wrong (catering to risky startups)? Are there examples of woke moves that got them in trouble?

 

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[greg218]

Well they did donate over $70 million to BLM and other social related causes

BLM Funding Database - The American Way of Life

You can view our article introducing the database here: Americans Deserve To Know Who Funded BLM Riots | Opinion (newsweek.com) .entry-header { display: none; }

dc.claremont.org

 

[BizyDad]

Well they did donate over $70 million to BLM and other social related causes

BLM Funding Database - The American Way of Life

You can view our article introducing the database here: Americans Deserve To Know Who Funded BLM Riots | Opinion (newsweek.com) .entry-header { display: none; }

dc.claremont.org

View attachment 47653

On the forum since 2011. This is your third comment and your first reaction score. Congrats.

I have to ask, why have you been lurking so long?

 

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[Everyman]

I don't see what more power they could even get. They have it all.

One reason, I mention above, one of many.

They also fight over control 'between themselves' - so FED owners can only control where they can force the Gov to send the US Army / Navy (to be precise) to 'implement democracy'. USA is in decline, steady or not, decline, and we now again have oligopoly (don't know if correct term) instead of hegemony on the globe.

So they don't have it all because the greedy monkeys control less and less. They might have it all in the US, but are losing power everywhere else hence these hmm... events... One explanation of course. Not definite and not 'know it all'...

With a stroke of a pen they can make banks insolvent, push your monthly payments up so high that your assets are stripped from you... increase the power of the dollar and bankrupt indebted countries then seize their physical assets as payments....

But they have to be careful. Because it might escalate, and if it escalates too much they might actually loose too much.

China is only waiting, India too, Russia too etc etc... Iran, Saudi Arabia, Turkey... So many countries. While everyone only see Ukraine, the same might happen in Texas or Mexico (uuuuuu I know)... The system is so interconnected that everyone wants to weaken everyone but not as much to create a huge crisis that could end up don't know where... So balancing...

 

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[Kevin88660]

I keep reading that it is a get woke, go broke story. Does anybody have more info about what exactly they did wrong?
Have not read of anything specific that says the greed was off the charts or that there was extreme negligence.
Just that startups withdrew a lot of money in a short amount of time. Was the whole premise wrong (catering to risky startups)? Are there examples of woke moves that got them in trouble?

View: https://youtu.be/sRhFjpYERa4

 

[JordanK]

One reason, I mention above, one of many.

They also fight over control 'between themselves' - so FED owners can only control where they can force the Gov to send the US Army / Navy (to be precise) to 'implement democracy'. USA is in decline, steady or not, decline, and we now again have oligopoly (don't know if correct term) instead of hegemony on the globe.

So they don't have it all because the greedy monkeys control less and less. They might have it all in the US, but are losing power everywhere else hence these hmm... events... One explanation of course. Not definite and not 'know it all'...



But they have to be careful. Because it might escalate, and if it escalates too much they might actually loose too much.

China is only waiting, India too, Russia too etc etc... Iran, Saudi Arabia, Turkey... So many countries. While everyone only see Ukraine, the same might happen in Texas or Mexico (uuuuuu I know)... The system is so interconnected that everyone wants to weaken everyone but not as much to create a huge crisis that could end up don't know where... So balancing...

I don't think anyone really takes China, Russia, India or the Middle Eastern countries seriously as an alternative to American dominance. You know what you get with the Americans... everyone likes to give out about them but if you play within their rules you can be highly successful (i.e Ireland poaching a lot of their multinationals)

The Chinese Silk Road financing scheme has been revealed to be a debt trap play. China doesn't reveal accurate information about its economy, currency or in the case of the pandemic its health information.

The Russians are a gas station and arms manufacturer with not much else. They want to destroy the system completely not entice people to join theirs.

India isn't developed enough yet but could elevate themselves in years to come. They don't seem to want to rule over a system though and favor neutrality like a big Ireland.

 

[Xeon]

Meh, who cares if billions were lost. They had a diverse workforce that checked all the boxes.

Speaking of diversity, if anyone has used free stock photo sites like pexels.com or unsplash.com, you'll have notice that these sites have gone woker and woker in terms of the demographics of the people in the stock photos. They're reaching a point where the models in the stock photos are no longer an accurate representation of reality, but just thrown in there for wokeness.

 

[Xeon]

You honestly don't notice anything remotely wrong with this kind of phrasing? Is this just an American way of looking at the world

"America is the main character of the world." - JohnnyBoy, 2022

 

[ZF Lee]

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 !

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:

Exclusive-UBS seeks about $6 billion in government guarantees for Credit Suisse deal -source By Reuters

Exclusive-UBS seeks about $6 billion in government guarantees for Credit Suisse deal -source

www.investing.com

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

Warren Buffett in Contact With Biden Team on Banking Crisis

Berkshire Hathaway Inc.’s Warren Buffett has been in touch with senior officials in President Joe Biden’s administration in recent days as the regional banking crisis unfolds.

www.bloomberg.com

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?

How Warren Buffett rescued US biggest banks from financial crisis

Warren Buffett, the Oracle of Omaha's frugal decision has helped two big banks overcome the crisis during their worst period.

www.livemint.com

 

[Xeon]

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:

Exclusive-UBS seeks about $6 billion in government guarantees for Credit Suisse deal -source By Reuters

Exclusive-UBS seeks about $6 billion in government guarantees for Credit Suisse deal -source

www.investing.com

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

Warren Buffett in Contact With Biden Team on Banking Crisis

Berkshire Hathaway Inc.’s Warren Buffett has been in touch with senior officials in President Joe Biden’s administration in recent days as the regional banking crisis unfolds.

www.bloomberg.com

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?

How Warren Buffett rescued US biggest banks from financial crisis

Warren Buffett, the Oracle of Omaha's frugal decision has helped two big banks overcome the crisis during their worst period.

www.livemint.com

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?

 

[Kevin88660]

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.

 

[Kevin88660]

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.

 

[MJ DeMarco]

Regulators close crypto-focused Signature Bank, citing systemic risk

U.S. regulators on Sunday shut down New York-based Signature Bank in a bid to prevent the spreading banking crisis.

www.cnbc.com

Oddly, the S&P Futures are higher.

 

[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.