7 ms·

SVB fallout. Trading in First Republic, Signature Bank, other banks halted

10 points by O__________O 4y ago

PaulHoule 4y ago
There are two stories circulating around SVB. (1) That it is about their investments in bonds going bad because of increasing interest rates (2) That (1) is the straw that broke the camel's back but the real problem is that SVB has a lot of bad loans on their books. If it is really about (1), well, lots of other banks have a huge exposure to bonds too and other banks could be affected too. We'll see how it plays out in the next week and beyond.
- hnthrowaway0315 4y ago
  I have yet to read about anyone discussing their hedging strategy regarding the bonds. Theoretically, I couldn't imagine that risk control doesn't ring a bell if a bank has a large one side exposure to anything, even treasury bonds. I think maybe reading the financial reports can reveal more as I expect to read about credit derivatives.
  - PaulHoule 4y ago
    Circa 2000 I was at my broker and interest rates were high so I was interested in CD's and walked into to the regional bank in the office next door, picked up the annual report, liked what I saw and bought shares in Tompkins Financial Corporation which have beat the S&P 500 and paid good dividends. As I see it TMP does well by its employees, customers, community, and also treats me very well as a shareholder. One of my relatives signs off on the books for TMP. She can't tell me anything that she can't tell everyone else, but I've asked her about the question of "what happens if interest rates go up?" and I can say I like what I've been told.
  - rasz 4y ago
    >risk control maybe they gave that to Chief Administrative Officer Joseph Gentile, formerly CFO of Lehman Brothers
- infotogivenm 4y ago
  The numbers I have seen put SVB at 56% exposed to long term bonds, vs closer to 20% at other banks. Is there another type of exposure I am missing?
nightmarish 4y ago
https://youtube.com/watch?v=XTXNqfUWT5E https://youtube.com/watch?v=XTXNqfUWT5E
- version_five 4y ago
  That was some kind of choir video, is that what you meant to post?
  - nightmarish 4y ago
    Yes. If you are not aware of the music piece “Hall of the Mountain King”, a few small and quiet initial notes lead to a cascading torrent of choral tones and heavy dynamics. Similar to this financial situation, we are hearing some of the first opening notes.
    - version_five 4y ago
      Thanks, I'd heard that song before but I didn't know the name.
    - Asparagirl 4y ago
      I think the strings are warming up... https://twitter.com/Dr_PhillipB/status/1634632068058722304 https://twitter.com/Dr_PhillipB/status/1634632068058722304
- salawat 4y ago
  Brought a smile to my face, because I was just thinking the same thing.

10 points by O__________O 4y ago

There are two stories circulating around SVB. (1) That it is about their investments in bonds going bad because of increasing interest rates (2) That (1) is the straw that broke the camel's back but the real problem is that SVB has a lot of bad loans on their books. If it is really about (1), well, lots of other banks have a huge exposure to bonds too and other banks could be affected too. We'll see how it plays out in the next week and beyond.

hnthrowaway0315 4y ago
I have yet to read about anyone discussing their hedging strategy regarding the bonds. Theoretically, I couldn't imagine that risk control doesn't ring a bell if a bank has a large one side exposure to anything, even treasury bonds. I think maybe reading the financial reports can reveal more as I expect to read about credit derivatives.
- PaulHoule 4y ago
  Circa 2000 I was at my broker and interest rates were high so I was interested in CD's and walked into to the regional bank in the office next door, picked up the annual report, liked what I saw and bought shares in Tompkins Financial Corporation which have beat the S&P 500 and paid good dividends. As I see it TMP does well by its employees, customers, community, and also treats me very well as a shareholder. One of my relatives signs off on the books for TMP. She can't tell me anything that she can't tell everyone else, but I've asked her about the question of "what happens if interest rates go up?" and I can say I like what I've been told.
- rasz 4y ago
  >risk control maybe they gave that to Chief Administrative Officer Joseph Gentile, formerly CFO of Lehman Brothers
infotogivenm 4y ago
The numbers I have seen put SVB at 56% exposed to long term bonds, vs closer to 20% at other banks. Is there another type of exposure I am missing?

nightmarish 4y ago

https://youtube.com/watch?v=XTXNqfUWT5E https://youtube.com/watch?v=XTXNqfUWT5E

version_five 4y ago
That was some kind of choir video, is that what you meant to post?
- nightmarish 4y ago
  Yes. If you are not aware of the music piece “Hall of the Mountain King”, a few small and quiet initial notes lead to a cascading torrent of choral tones and heavy dynamics. Similar to this financial situation, we are hearing some of the first opening notes.
  - version_five 4y ago
    Thanks, I'd heard that song before but I didn't know the name.
  - Asparagirl 4y ago
    I think the strings are warming up... https://twitter.com/Dr_PhillipB/status/1634632068058722304 https://twitter.com/Dr_PhillipB/status/1634632068058722304
salawat 4y ago
Brought a smile to my face, because I was just thinking the same thing.