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> 1. Some mighty people/companies will bail out all depositors Yeah, I'm sure Elon Musk can just write a check to cover this... oh, wait. Seriously, who do yo
by UncleOxidant 4y ago
> 1. Some mighty people/companies will bail out all depositors
Yeah, I'm sure Elon Musk can just write a check to cover this... oh, wait.
Seriously, who do you think would have the capital to swoop in here and cover something north of $170B in shortfall? Especially right now given that money is pretty tight everywhere.
- celestialcheese 4y agoWhere are you getting 170b in shortfall?
- UncleOxidant 4y agoIn one of the other threads discussing this SVB was said to have ~$200B in assets, 93% of which were not covered by FDIC. That actually comes out to $186B.
- jakozaur 4y agoThe shortfall is much smaller. The challenge is $80Bln mortgage-backed securities, which they likely have to sell at a 20-30% markdown and cover that.
- woeirua 4y agoThis is the real question. How much are those MBS worth on the open market? Their value decreases every day as the fed keeps raising rates. I don't think anyone can really say what kind of hole SVB might be in right now.
- fairity 4y agoOnce its becomes more clear how much SVB assets can be sold for and along what time frame, there will be plenty of firms willing to either: 1) purchase receivership certificates at a discount to expected value 2) issue bridge loans to cover the expected value of receivership certificates. It's not a bail out in the sense of free money. It's a bail out in the sense of a short term loan, just like after the GFC.