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Was reading about that last night and I thought the same thing . Let’s see how big a house of cards this crypto market really is …
heh..
Silicon Valley Bank is shut down by regulators, FDIC to protect insured deposits
https://www.cnbc.com/2023/03/10/silicon-valley-bank-is-shut-down-by-regulators-fdic-to-protect-insured-deposits.html
This is a very ominous sign, Bank might have had too much exposure to Mortgage backed securities, allegedly. A run on funds, perhaps fallout from FTX Crypto connections forced them to sell the mortgage backed securities at losses. That's my layperson understanding. The rise in interest rates by the fed makes many of the lower interest rate mortgage backed securities Duds
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Here's a good short explainer thread.
Seems like the usual Tech Circle jerk, where people attach huge value to what something might be,instead of what it is, without realising you can turn it off at the wall.
Lets hope the contagion doesnt spread , or morelike, lets hope they dont use it as a catalyst to make stuff happen.
It appears that a lot of the SVB top brass managed to off their shares before the news broke... imagine my lack of surprise.
The official PR from FDIC…
https://www.fdic.gov/news/press-releases/2023/pr23016.html
WASHINGTON – Silicon Valley Bank, Santa Clara, California, was closed today by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect insured depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DIN
. At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank.
All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.
Silicon Valley Bank had 17 branches in California and Massachusetts. The main office and all branches of Silicon Valley Bank will reopen on Monday, March 13, 2023. The DINB will maintain Silicon Valley Bank’s normal business hours. Banking activities will resume no later than Monday, March 13, including on-line banking and other services. Silicon Valley Bank’s official checks will continue to clear. Under the Federal Deposit Insurance Act, the FDIC may create a DINB to ensure that customers have continued access to their insured funds.
As of December 31, 2022, Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits. At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers.
Customers with accounts in excess of $250,000 should contact the FDIC toll–free at 1-866-799-0959.
The FDIC as receiver will retain all the assets from Silicon Valley Bank for later disposition. Loan customers should continue to make their payments as usual.
Silicon Valley Bank is the first FDIC–insured institution to fail this year. The last FDIC–insured institution to close was Almena State Bank, Almena, Kansas, on October 23, 2020.
FDIC: PR-16-2023
It sounds like Oprah Winfrey and Harry and Meghan had gone in big with SVB as its a full on ESG bank.
Except ESG doesnt make bank, so they invested in stuff that hemorrages cash for fun, and wonder why it all folded.
Lots of celebs lost big.
Oh dear
How sad
Never mind.
Too Funny
It also looks like their Regulatory Risk assessor spent more time on LGBTQ -teapot stuff than actually doing the job she was paid to do .
So GET WOKE GO BROKE seems to be in full effect.
it would be funny, but you know the taxpayer will end up bailing the useless fuckers out.
Isn't it weird how only losses are socialized, but profits go to a relatively small group of people?
The Fed and the rest of the muckity mucks in the know don’t want you to know how how precarious the banking and monetary system is at the moment. If John Q Public gets nervous and starts making runs on the banks, there will be more to go down. I guarantee you the big wigs in the banking industry are not sleeping well this weekend, fearful of what is going to happen Monday morning. We could see the SHTF almost any moment from now through the next couple of months. Everything I read and watch says to keep enough cash and supplies on hand to make it for a few weeks or a month just in case. Things will eventually get better but it will get worse before it gets better. Big money (people and institutions with LOTS of money) have been moving to metals for a little while. Our financial system is getting ready to go through some changes. Be prepared.
From what ive seen in 2018 the regulations in the Dodd-Frank act were loosened for banks carrying between 100 and 250 billion dollars of assets/deposits so that they didn't have to submit to a yearly stress test and didn't have to have as much cash on hand.
Supposedly they bought a bunch of 1-2% Treasury notes and mortgages before the interest rates went up.
Peter Thiel told all his Founders Fund partners to withdraw their accounts and there was 50 or 60 billion dollars trying to be pulled out on Thursday or Friday, but a bunch of the executives of the bank sold stock on Thursday so insiders knew what was up.
Alot like 2008 the bankers will be our downfall with their jackassery.
Ok, everyone JUST STOP IT!
Janet Yellen says everything is OK. Nothing to see here. Heck, we’re not even going have to bail this bank out. Just heard her say so!
Not really much of a gambler, but my thought is someone will just bail this bank out, big tech, big hedge fund, private equity something like that. The real question is will there be others?
Good news the liberal execs cashed out their stock and gave bonuses leading up to the collapse..
As we’ve been saying thru-out the entire Biden Epic Fail…
You can’t make this shit up!
Pit Row
Early knows…
Follow the banking & other so-called “Financial Regulations” if you want to see exactly how and why the dominoes fall the way they do.
Go back to when they passed Gramm‐Leach‐Bliley Act in 1999 and they began letting the banks and huge financial entities have a virtual free-rein and minimal holdings versus the requirements & regulations that had been in place per Glass-Steagall Act of 1933.
The fine folks at CATO will call you a simpleton when you “follow the money” from the passage of Gramm‐Leach‐Bliley to the money all just…”disappearing” by 2008 due to…and get this….all because of “sub-prime” mortgages…of-course! Yup. Follow the DEREGULATION of GLB in 1999…to all that deregulated money disappearing inside of 10 years.
Of course
If you read all the way thru that…
She’s spent time amongst “The Great Rule Makers of the Modern Financial Era”.
Our money to the rescue once again.
We certainly don't want any of those donors to be in financial stress so close to an upcoming money gathering, oops my bad, election season.
Peter Thiel started the bank run. He's been a major political backer lately, check out who is guys are.
Well, the UK division just sold for about a buck and a quarter. For real $1.21. With my vast portfolio, I can go by 10 banks this morning.
But I'd have to forgo buying a dozen eggs. I think I'd rather eat breakfast. LOL
TM
You left out a few details....
1. Bank plays stupid games
2. Bank wins stupid prizes
3. Bank required to report stupid prizes
4. Smart money catches wind of stupid prizes on bank balance sheet
5. Smart money tells friends
The bank run was started by the bank and their actions.
Look at my other posts in this thread.
Do you know what happened Thursday?
Sounds like they got caught up in the interest rate hikes.
Something about their loans were done when interest was low, and when the feds raised the rates, it all came crumbling down.
From what I understand they were heavily invested in long bonds and mortgage back securities, two things that have gotten absolutely decimated over the last year. That in and of itself really isn't criminal and I can guarantee that there are plenty of other institutions that would get caught with their pants down in the same investments if the tide were to go out a bit further, but insiders pulling their money and selling stock just prior to the collapse isn't going to go well.
Banks are really only allowed to invest in certain assets to get yield on their deposits, with bonds being the primary option since they are considered safe, so it wouldn't surprise me at all of a lot of major institutions are sitting on massive unrealized losses at the moment. This is fine if the bonds are held to maturity, but if there is a run on the bank and the institution is forced to liquidate their holdings in order to meet customer demands it forces those unrealized losses to become realized as the bonds are sold at a steep loss. To me it doesn't necessarily seem like they did anything grossly negligent or wrong, our entire banking system is not set up for a panic and bank run of that magnitude and with bond yields spiking over the last year a lot of institutions have got to be sweating right now.
The article I read "yahoo news" stated he had instructed people earlier in the week to put money IN SVB, but they were experiencing difficulties so they changed direction and moved them away. Sounds like SVB started the problem where as your statement makes it sound like PT started the problem.
"Founders Fund acted in other ways to move its business away from SVB. On Thursday, as the bank was beginning to unravel, the firm started what’s known as a capital call. That’s a run-of-the-mill activity in the venture capital world, in which a VC firm asks its investors, or limited partners, to send it money in order to make investments in startups — the core function of most VC firms. It began by asking those backers to transfer the funds to accounts at SVB, as it has done for years, the person said.
But the firm learned that its limited partners were encountering issues using SVB services as they tried to transfer the funds — they weren’t immediately going through as expected, the person said.
Quickly, Founders Fund asked its investors to transfer the money to other banks instead. The fund acted to ensure that startup funding deals that were slated to close in the coming days were not delayed, the person said."
¯\_(ツ)_/¯
https://www.fastcompany.com/90864395/silicon-valley-bank-an-its-a-wonde…
The run began on Thursday, after a powerful Silicon Valley VC—Peter Thiel’s Founders Fund—had begun advising its portfolio companies to withdraw their money from SVB, sources told Fast Company. Other VCs soon caught wind of the advisory and began advising their own portfolio companies to withdraw funds from SVB, the people said. As the withdrawals accelerated, the bank began taking steps to stem the tide and preserve its solvency—just like George Bailey did in the 1946 classic It’s a Wonderful Life.
close
SVB Financial Group CEO Greg Becker seemed to be reading from director Frank Capra’s script when he uttered the fateful words “stay calm” during a Thursday conference call with customers, as fears over the bank’s solvency grew. Those words probably only increased depositors’ anxieties. And the withdrawals likely continued to snowball.
“The whole thing was predicated on a few folks who put out calls to make withdrawals,” Spencer Greene, a general partner at the venture fund TSVC, tells Fast Company. “I think the folks who made those calls weren’t correct on the facts, but once the thing got going it was hard to stop.” In other words, before the run started there was not sufficient evidence to suggest the bank was facing serious solvency issues.
Not that Founders Fund acted irrationally. It had reason to be watching the bank’s business closely. SVB, which specializes in serving tech startups, has suffered from the downturn of the general tech economy that started last year. VC funding has dried up in most sectors, and now many startups are in belt-tightening mode, trying to cut down on expenses and making more frequent withdrawals from the bank to make payroll and cover other costs of doing business.
For Founders Fund, the last straw may have come on Wednesday. “The tipping point came when they announced that in order to fund the increased withdrawals they would be raising additional capital from other investors,” says Columbia University Business School professor Dan Wang. SVB said as much in a Securities and Exchange Commission filing Wednesday. “When a bank does that it can be taken as a signal that there’s something wrong,” Wang says.
And from a strategic point of view, Founders Fund actually had little to lose in making its advisory to its portfolio companies,” Greene points out. “They still did the right thing rationally, even if they perceived only a 1% risk.” If they were right, they may have just saved their portfolio companies’ businesses, he explains. If they were wrong, all that happens is that their portfolio companies move their money to other banks.
Before Founders Fund acted, SVB’s liquidity was not in serious question. The bank did indeed have plentiful assets, but they were not liquid assets that could be paid out immediately. The bank owned mortgages, bonds, and loans—assets that are collectible later (when they’re paid off by borrowers). But in our super-connected age, a little fear—even unfounded fear—can go a long way. And fast.
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