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The amount of the potential losses on the uninsured deposits was a very small fraction of $150B.
by ericd 4y ago
The amount of the potential losses on the uninsured deposits was a very small fraction of $150B.
- vintermann 4y agoWas it? I think I read somewhere that this bank had an unusually large share of depositors over the deposit insurance limit, or in other words a high share of uninsured deposits.
- lordnacho 4y agoYes but that doesn't mean they would lose everything over the insured limit. If I owe you 1M but only have 950k to give you that's a lot better than having only 100k, in which case you'd end up with 250k.
- yawpitch 4y agoOk, but assuming the numbers above are correct, 150B in uninsured deposits - 5B in market cap firesale = 145B that SVB apparently didn’t have the cash on hand to repay. If every depositor walks in first thing Monday morning and withdraws their bad bet in their (apparently single) chosen bank’s management, the customers of all other banks are now on the hook for 145B… which ultimately means everyone on the planet can expect to pay more for their haircuts.
- lordnacho 4y agoHuh, are the assets only trading at 5B? I thought it was much closer to 150B?
- jsjohnst 4y agoNo, GP is just foolishly conflating liabilities and assets and bank deposits and enterprise value among other issues if you read this and their other comments. tl;dr - GP doesn’t have a clue what they are saying.
- jsjohnst 4y agoWith the number of ELI5 guides all over the internet on the SVB situation, this level of willful ignorance you displayed here is just sad. Seriously, stop talking out your arse and go educate yourself, even a little, first.
- yawpitch 4y agoWell, you seem like a thoroughly pleasant ~human~ being to be around. Let’s just sit back and see how this all plays out.