4 ms·

Taxpayer money won't be required here. SVB will get sold to a bigger bank. Providing short-term liquidity will be profitable for the taxpayer.

jonstewart 4y ago
It didn’t seem probable at the time, but the taxpayer did pretty well with all the bailouts in 2008.
- bagels 4y ago
  Of banks or of auto manufacturers?
  - somsak2 4y ago
    The government made quite a bit of money in profit overall. Auto manufacturers were <15% of the total amount. https://projects.propublica.org/bailout/ https://projects.propublica.org/bailout/
    - Scoundreller 4y ago
      Did they? Making a 17% return over 13 years on the riskiest “investments” imaginable (think: injections that the market said “fuck no!” to) is an atrocious return, and a net loss after accounting for inflation. It’s a bit unclear because some of those loans were paid back years ago, but even if it works out to be over 6 or 7 years, it’s still pretty bad. Gov should have juiced its returns by requiring 100% equity wipeouts in exchange for gov’s ultra-high-risk loans/investments.
ttul 4y ago
I believe SVB is done. It won’t be sold. They wound it up. It’s over.
- vineyardmike 4y ago
  Almost certainly not. SVB the company is basically killed. It's true, if you're an investor/owner in the bank, your equity is probably worth ~$0. The bank is owned by the FDIC and is being managed as a new bank. Even if company SVB is worth ~$0 in equity if the parts are sold on the market, they're still a business... so they have some intrinsic value to the future income. That means there is value in buying the company, at the right price. The hole in there books would have to be bigger than the value of their future cash flow for there to be no reason to buy it. Beyond that, there's some value for a bank to buy it because the FDIC approached them. Because there is tremendous value for everyone in the stability of the system.
  - ttul 4y ago
    I rest my case.

jonstewart 4y ago

It didn’t seem probable at the time, but the taxpayer did pretty well with all the bailouts in 2008.

bagels 4y ago
Of banks or of auto manufacturers?
- somsak2 4y ago
  The government made quite a bit of money in profit overall. Auto manufacturers were <15% of the total amount. https://projects.propublica.org/bailout/ https://projects.propublica.org/bailout/
  - Scoundreller 4y ago
    Did they? Making a 17% return over 13 years on the riskiest “investments” imaginable (think: injections that the market said “fuck no!” to) is an atrocious return, and a net loss after accounting for inflation. It’s a bit unclear because some of those loans were paid back years ago, but even if it works out to be over 6 or 7 years, it’s still pretty bad. Gov should have juiced its returns by requiring 100% equity wipeouts in exchange for gov’s ultra-high-risk loans/investments.

ttul 4y ago

I believe SVB is done. It won’t be sold. They wound it up. It’s over.

vineyardmike 4y ago
Almost certainly not. SVB the company is basically killed. It's true, if you're an investor/owner in the bank, your equity is probably worth ~$0. The bank is owned by the FDIC and is being managed as a new bank. Even if company SVB is worth ~$0 in equity if the parts are sold on the market, they're still a business... so they have some intrinsic value to the future income. That means there is value in buying the company, at the right price. The hole in there books would have to be bigger than the value of their future cash flow for there to be no reason to buy it. Beyond that, there's some value for a bank to buy it because the FDIC approached them. Because there is tremendous value for everyone in the stability of the system.
- ttul 4y ago
  I rest my case.