10 ms·

I think this might be the beginning. I think various funds (public or private) which have capitals stored in SVB is gonna be in a lot of trouble. Every investme

by aynyc 4y ago

I think this might be the beginning. I think various funds (public or private) which have capitals stored in SVB is gonna be in a lot of trouble. Every investment firms are probably scanning their portfolios and business cash lines to see how much they are impacted by SVB and similar banks. I wouldn't be surprised to see a run on banks in the next few days/weeks if additional rumors (true or not) come out. Edit: didn't want to reply to everyone. 1. SVB probably thought they are in good shape, like every bank out there. 2. Even if the deposits are OK by early next week. Every banks/firms/funds will need to start reviewing their books and see what exposures they have. Even the slightest "issue" will trigger a bank run. Tolerance is really low at this point.

slaymaker1907 4y ago
After the GFC, banks and investment firms had to get really good at computing risk and impact from events like this so it probably won’t be too long.
AdamJacobMuller 4y ago
Monday will tell. FDIC will have done enough rough accounting to roughly get an idea of how much money large depositors will actually get. It's also entirely possible a deal gets worked out over the weekend that results in all cash depositors being whole at a new bank. Monday will tell.
- sp332 4y ago
  Oh, did they? I hadn't seen that yet.
  - gotoeleven 4y ago
    [flagged]
  - sp332 4y ago
    Ok it was late and I misread GP as saying they had already done it.
notch898a 4y ago
This is good for centralized finance.
FormerBandmate 4y ago
This is how financial crises start. IndyMac ($40 billion) went under in July 2008 which caused tension, and then Lehman fell apart two months later which led to 15 institutions failing in a matter of weeks. There are other financial institutions that are suffering. We could definitely see cascades among some of the weaker banks
- koolba 4y ago
  Bear Stearns was even earlier that same year. It’s like that old quote about going bankrupt, first it happened slowly, then suddenly.
  - toomuchtodo 4y ago
    https://www.youtube.com/watch?v=gUkbdjetlY8 https://www.youtube.com/watch?v=gUkbdjetlY8
    - koolba 4y ago
      If you’re gonna shop Cramer clips, might as well show his take on SVB from about a month ago: https://twitter.com/WatcherGuru/status/1634246217226919937 https://twitter.com/WatcherGuru/status/1634246217226919937 (Spoiler: should have bought the inverse Cramer ETF…)
  - mftb 4y ago
    "How did you go bankrupt?" Bill asked. "Two ways," Mike said. "Gradually and then suddenly." --Ernest Hemingway, The Sun Also Rises
- pcdoodle 4y ago
  If you were ultra paranoid, what other institution types would be advisable to exit? Could this impact investments in the market?
  - saurik 4y ago
    How paranoid would you have to get before you'd be willing to convert all your money to crypto? ;P
pcurve 4y ago
I think most SVB depositors will be OK. I'm wondering about what's going to happen to similar banks.
chasd00 4y ago
I just got an email from Mercury saying they’re well capitalized and all is well. “ I want to assure you that Mercury is in a strong financial position (profitable and well-capitalized), and we have a number of ways that we keep deposits on Mercury safe:” Uhoh.
- Spivak 4y ago
  Is there any bank out there that can survive a panic bank run?
  - qzw 4y ago
    Yes, if you count central banks and don’t mind hyperinflation. But that’s probably not what you’re asking. I don’t think any ordinary commercial or retail bank could survive a run without outside help.
  - guestbest 4y ago
    Sure, as long as the bank makes a cryptocurrency to back up deposits
  - metalspot 4y ago
    JP Morgan Chase, Bank of America, Citibank, and anyone else who will be bailed out by the fed. But seriously, the problem with SVB was that their assets are trash and everyone knew it. If their assets were actually worth what they claimed they would have no problems.
    - funstuff007 4y ago
      I don't know about that. I think it's more that they never hedged their interest rate risk (or they invested in assets that were too long duration).
    - skeeter2020 4y ago
      This is not the same situation as dogshit assets from the sub-prime crisis; the bonds are not "trash" in the sense people are thinking, but long-term, lower interest instruments. As interest rates have risen they are a relatively poorer invesment, but still have the long-term (illiquid) value of the underlying asset less the curret rate to return differential. It's inaccurate to say they mis-stated the value of their assets.
maxerickson 4y ago
SVB had to know they were in trouble. The problem they had in some sense boils down to being caught holding the bag (they had a huge amount of securities that declined in price as interest rates rose).
Gustomaximus 4y ago
What does a bank run look like at this level of corporate holdings? They can hardly ask for a few hundred million in cash. Are they moving money from one bank to another, spreading money across banks to reduce single points of failure. Maybe buying bonds, gold or other more secure investments? Roll the dice on crypt as if it does have a moment to shine this is it.
alanfranz 4y ago
Can you run away from all banks, though? Where do you put the money?
- dieselgate 4y ago
  I don’t know details but maybe local credit union

by aynyc 4y ago

slaymaker1907 4y ago

After the GFC, banks and investment firms had to get really good at computing risk and impact from events like this so it probably won’t be too long.

AdamJacobMuller 4y ago

Monday will tell. FDIC will have done enough rough accounting to roughly get an idea of how much money large depositors will actually get. It's also entirely possible a deal gets worked out over the weekend that results in all cash depositors being whole at a new bank. Monday will tell.

sp332 4y ago
Oh, did they? I hadn't seen that yet.
- gotoeleven 4y ago
  [flagged]
- sp332 4y ago
  Ok it was late and I misread GP as saying they had already done it.

notch898a 4y ago

This is good for centralized finance.

FormerBandmate 4y ago

This is how financial crises start. IndyMac ($40 billion) went under in July 2008 which caused tension, and then Lehman fell apart two months later which led to 15 institutions failing in a matter of weeks. There are other financial institutions that are suffering. We could definitely see cascades among some of the weaker banks

koolba 4y ago
Bear Stearns was even earlier that same year. It’s like that old quote about going bankrupt, first it happened slowly, then suddenly.
- toomuchtodo 4y ago
  https://www.youtube.com/watch?v=gUkbdjetlY8 https://www.youtube.com/watch?v=gUkbdjetlY8
  - koolba 4y ago
    If you’re gonna shop Cramer clips, might as well show his take on SVB from about a month ago: https://twitter.com/WatcherGuru/status/1634246217226919937 https://twitter.com/WatcherGuru/status/1634246217226919937 (Spoiler: should have bought the inverse Cramer ETF…)
- mftb 4y ago
  "How did you go bankrupt?" Bill asked. "Two ways," Mike said. "Gradually and then suddenly." --Ernest Hemingway, The Sun Also Rises
pcdoodle 4y ago
If you were ultra paranoid, what other institution types would be advisable to exit? Could this impact investments in the market?
- saurik 4y ago
  How paranoid would you have to get before you'd be willing to convert all your money to crypto? ;P

pcurve 4y ago

I think most SVB depositors will be OK. I'm wondering about what's going to happen to similar banks.

chasd00 4y ago

I just got an email from Mercury saying they’re well capitalized and all is well. “ I want to assure you that Mercury is in a strong financial position (profitable and well-capitalized), and we have a number of ways that we keep deposits on Mercury safe:” Uhoh.

Spivak 4y ago
Is there any bank out there that can survive a panic bank run?
- qzw 4y ago
  Yes, if you count central banks and don’t mind hyperinflation. But that’s probably not what you’re asking. I don’t think any ordinary commercial or retail bank could survive a run without outside help.
- guestbest 4y ago
  Sure, as long as the bank makes a cryptocurrency to back up deposits
- metalspot 4y ago
  JP Morgan Chase, Bank of America, Citibank, and anyone else who will be bailed out by the fed. But seriously, the problem with SVB was that their assets are trash and everyone knew it. If their assets were actually worth what they claimed they would have no problems.
  - funstuff007 4y ago
    I don't know about that. I think it's more that they never hedged their interest rate risk (or they invested in assets that were too long duration).
  - skeeter2020 4y ago
    This is not the same situation as dogshit assets from the sub-prime crisis; the bonds are not "trash" in the sense people are thinking, but long-term, lower interest instruments. As interest rates have risen they are a relatively poorer invesment, but still have the long-term (illiquid) value of the underlying asset less the curret rate to return differential. It's inaccurate to say they mis-stated the value of their assets.

maxerickson 4y ago

SVB had to know they were in trouble. The problem they had in some sense boils down to being caught holding the bag (they had a huge amount of securities that declined in price as interest rates rose).

Gustomaximus 4y ago

What does a bank run look like at this level of corporate holdings? They can hardly ask for a few hundred million in cash. Are they moving money from one bank to another, spreading money across banks to reduce single points of failure. Maybe buying bonds, gold or other more secure investments? Roll the dice on crypt as if it does have a moment to shine this is it.

alanfranz 4y ago

Can you run away from all banks, though? Where do you put the money?

dieselgate 4y ago
I don’t know details but maybe local credit union