stock market was up today...

[85SugarVol]

. SVB doubled in size almost in a little over a year. Oversight clearly didn’t keep up with growth.

Investing with SVB was clearly a status sought out by many across the country.

Exactly what SVB was invested in doesn’t seem to have been a big priority.

 

[DC_Vol]

Everyone knew that. Everyone.

Not very good people on staff if they are developing their strategy and risk profile around government talking points.

An intern economist could have told them you cannot do what did in 2020 without inflation. Inflation is about two things: money supply and productivity. 2020 money supply went up. Productivity declined. The only thing to soak up the mismatch is inflation. It’s an economic certainty.

 

[red butler]

Apparently they let them all expire. Definition of eye off the ball.

I know. I was waiting to see if he knew that.

Thanks. Did not know that. They do look pretty stupid and I learned something today.

 

[W.TN.Orange Blood]

 

[85SugarVol]

I originally said 20-30% haircut for uninsured deposits.
10-15% losses probably strikes a good balance.

Simply guaranteeing everything is not sustainable, and will lead to more failures.

While acknowledging that the precise math is not immediately clear, Phillips estimated that the uninsured depositors could face losses of between 10 and 15 percent from the returns on the sales of these assets, which would be difficult for them but not catastrophic for the economy.

 

[Rasputin_Vol]

 

[Rasputin_Vol]

I don't know why anybody would by a 20 year bond at low interest. That never made sense to me. Are banks limited on what they can invest in though?

Dude, you know that no one with sense is buying low interest 20 year notes. Remember Operation Twist?

 

[Orangeburst]

Dude is the LG of the Financial world

 

[85SugarVol]

I’m still waiting for someone to explain why SVB let their hedges expire.

You know, the instruments that were already in place that could have mitigated this?

 

[Vol737]

Lifelines for everyone! Credit Suisse gets $54B. First Republic get $30B.

Markets improve on reports of lifelines to First Republic and Credit Suisse — NBC News

Bank Crisis: First Republic Bank Flies On $30 Billion Rescue, Regional Banks Reverse

 

[Velo Vol]

Any number of derivatives based contracts could have helped to mitigate this.

For pennies on the dollar they could have done this? Why did they not?

Or even spread their treasury maturities out so the portfolio wasn't heavily 10 year.

 

[volfanhill]

Lifelines for everyone! Credit Suisse gets $54B. First Republic get $30B.

Markets improve on reports of lifelines to First Republic and Credit Suisse — NBC News

Bank Crisis: First Republic Bank Flies On $30 Billion Rescue, Regional Banks Reverse

It's not the government doing the back up so this is great news

 

[Thunder Good-Oil]

That guy is a bigger clown than Cramer. “I think he had a show Mad Money. I not even sure they have that show anymore.” 30 seconds later he shows a clip of Cramer with a “Mad Money” bug in the lower left corner.

 

[85SugarVol]

Or even spread their treasury maturities out so the portfolio wasn't heavily 10 year.

That would have helped as well.

 

[85SugarVol]

It's not the government doing the back up so this is great news

It’s not the government here. Which is really good news.

Sounds like the Swiss Central Bank is backstopping Credit Suise.

 

[MurphyVol]

It's not the government doing the back up so this is great news

Exactly

 

[SpaceCoastVol]

Dude is the LG of the Financial world

He's gone rather lefty. Years ago I think he had some good advice and was actually a pretty good teacher of investment principles, but something happened. I think too much time around the leftist networks.

 

[VolStrom]

He's gone rather lefty. Years ago I think he had some good advice and was actually a pretty good teacher of investment principles, but something happened. I think too much time around the leftist networks.

I remember about 10 years ago he was pushing my former company hard and had our CEO on frequently. About a week or two later, the CEO gets fired for gross negligence and the stock tanks and never another word from this idiot.

 

[Fun coupon VOL]

In case anyone wants to know where inflation is going and how big the bubble is going to get.

 

[W.TN.Orange Blood]

 

[Thunder Good-Oil]

Surprisingly the regional bank ETF (KRE) is only off about 15%. IAT is a similar ETF.

 

[Fun coupon VOL]

Billionaire investor Bill Ackman says US banks depositing $30 billion into First Republic creates a 'false sense of confidence'

Anyone who bought hoping for a bump better have got it.

 

[Vol737]

Interesting take. Fed late on the front end, overcorrected on the back end and here we are. It’s the Dutch roll of economics. I sure don’t expect a rate cut, but would probably be wise to pause.

'Someone needs to tell Jerome Powell that this is not a kill-at-all-costs mission.' Cut interest rates now to prevent a full-blown banking crisis.

 

[AM64]

Interesting take. Fed late on the front end, overcorrected on the back end and here we are. It’s the Dutch roll of economics. I sure don’t expect a rate cut, but would probably be wise to pause.

'Someone needs to tell Jerome Powell that this is not a kill-at-all-costs mission.' Cut interest rates now to prevent a full-blown banking crisis.

It would all probably make a lot more sense if we didn't treat money like a commodity, stocks like a product, and banks weren't viewed as just another business - just can't see banks as a normal business traded on the stock market making any kind of sense. Banks are a particular problem. Owners are due profit when the bank operates profitably, but the real obligation should always be to the depositor. Stocks are always a risk; deposits in a bank aren't intended to be a risk; otherwise, we should just lock up our own cash at home and banks would not exist - and neither would available cash for reasonable loans.

Money is a medium of exchange, products are what a business produces and sells, stocks are an investment that companies can draw on and a source of dividends to investors when the business is doing it's thing well - stocks weren't meant as chips for Las Vegas East, and banks were meant to hold money in accounts and make sound loans based on deposits they hold (or more basically to keep the economy fluid).

 

[Go aeiou]

It would all probably make a lot more sense if we didn't treat money like a commodity, stocks like a product, and banks weren't viewed as just another business - just can't see banks as a normal business traded on the stock market making any kind of sense. Banks are a particular problem. Owners are due profit when the bank operates profitably, but the real obligation should always be to the depositor. Stocks are always a risk; deposits in a bank aren't intended to be a risk; otherwise, we should just lock up our own cash at home and banks would not exist - and neither would available cash for reasonable loans.

Money is a medium of exchange, products are what a business produces and sells, stocks are an investment that companies can draw on and a source of dividends to investors when the business is doing it's thing well - stocks weren't meant as chips for Las Vegas East, and banks were meant to hold money in accounts and make sound loans based on deposits they hold (or more basically to keep the economy fluid).

Deposits are at risk anywhere you keep it. The first obligation of the bank is to obey all bank laws and rules and then to the owners of the bank. OTOH, like any business keeping customers happy is necessary.
Money anywhere is at risk as is any other asset.. You can keep it at home, and almost cetainly lose as inflation eats away. If someone (i.e. a bank)pays you to use your money they will accept risk to make a larger return than what you are being paid, but you are taking a risk in order to earn money on your money. The depositor even has the benefit of $250K of insurance.(Needs to be raised)

Many stocks don't pay dividends, and couldn't be issued unless there is a way to make a profit. They are meant to be chips. The buyer of a stock believes the price will go up, and the seller thinks it will go down.