SIVB

JM485 wrote:

Before we get too far down the anti-woke rabbit hole let's take a look at a few aspects of what caused this and why it could...

Before we get too far down the anti-woke rabbit hole let's take a look at a few aspects of what caused this and why it could end up being systemic if left unchecked.  This goes way beyond the narrative that a lot of you are trying to latch onto, and this has nothing to do with one team or another but a broken financial system at large.  This is how things played out as I understand it:

 

- Banks are highly regulated in what they are allowed to invest in.  After the GFC bank investments came under massive scrutiny and for good reason, we narrowly avoided a complete global meltdown due to over leverage in the real estate market.  Now, with that said, banks handle deposited funds by either lending them out, or investing in assets such as treasuries.  Banks are highly encouraged to invest in "risk free" treasuries because they are generally considered the safest and most liquid assets in the world, plus they offer some kind of yield (this has been depressed over the last 15 years or so, but more on that later)

 

- Now, let's say you're a bank that has a high exposure to tech investments (such as SV and you need to hedge that exposure, what do you do?  You buy long duration treasuries.  What does the Fed incentivize you to do?  Buy long duration treasuries.  So, I don't think it's too far fetched to say that the decision to hold long duration treasuries from a risk management perspective makes sense, especially given a risk-free yield.  But, because that yield has been so depressed over the last decade or more, to get any kind of real return banks have had to get more and more levered, which increases risk.

 

- Ok, so the Fed has incentivized banks to hold long duration treasuries (remember the talks of yield curve control just 24 months ago?), but uh oh, now we have an inflation problem!  Don't worry though, we'll just raise interest rates at the fastest pace in history to combat the problem that we created, and in turn send bond yields into the relative stratosphere.  What does that do to value of existing treasuries?  You guessed it, they took a massive nose dive, to the point where 2022 was the worst year for bonds in recorded history.  Hmm, so now all of those bonds held by banks (and it's all of them) are now worth just a fraction of what they were purchased for, but that shouldn't be a problem because they'll just be held to maturity and the losses never realized, right?

 

- That is, unless a panic ensues and deposits are withdrawn.  Now, those bonds that were being held at an unrealized loss on the balance sheet are forced into liquidation to raise capital to meet withdraws, making those losses very real.  The effect snowballs, and pretty soon the bank can't meet customer needs so the problem gets exponentially worse.  That's essentially in a nutshell what happened here as I understand it.  This wasn't due to "woke investing" or "rich people being shady", this is a systemic problem and I can all but guarantee that we are going to see similar defaults if the bank runs get out of control.  There is not way that even the large banks don't have massive unrealized bond losses on their balance sheets, but the bigger ones can weather the storm while the smaller regional banks are going to be under massive pressure.  

 

In the end I have a feeling that we're going to see even more centralization within the banking industry as larger banks take over the smaller regional ones during the crisis.  The market cap percentage of regional banks vs national ones has been in a very steady decline over the last 40 years and this will play directly into that trend with mergers and accuisitions.  The Fed now has a choice to begin easing monetary supply again to depress bond yields, or stay on the hiking path and hope that the systemic risk is concentrated in smaller banks.  To me the only real way out of this mess is crypto, but that's a whole new can of worms to dive into.  

JM485 wrote:

Before we get too far down the anti-woke rabbit hole let's take a look at a few aspects of what caused this and why it could...

Before we get too far down the anti-woke rabbit hole let's take a look at a few aspects of what caused this and why it could end up being systemic if left unchecked.  This goes way beyond the narrative that a lot of you are trying to latch onto, and this has nothing to do with one team or another but a broken financial system at large.  This is how things played out as I understand it:

 

- Banks are highly regulated in what they are allowed to invest in.  After the GFC bank investments came under massive scrutiny and for good reason, we narrowly avoided a complete global meltdown due to over leverage in the real estate market.  Now, with that said, banks handle deposited funds by either lending them out, or investing in assets such as treasuries.  Banks are highly encouraged to invest in "risk free" treasuries because they are generally considered the safest and most liquid assets in the world, plus they offer some kind of yield (this has been depressed over the last 15 years or so, but more on that later)

 

- Now, let's say you're a bank that has a high exposure to tech investments (such as SV and you need to hedge that exposure, what do you do?  You buy long duration treasuries.  What does the Fed incentivize you to do?  Buy long duration treasuries.  So, I don't think it's too far fetched to say that the decision to hold long duration treasuries from a risk management perspective makes sense, especially given a risk-free yield.  But, because that yield has been so depressed over the last decade or more, to get any kind of real return banks have had to get more and more levered, which increases risk.

 

- Ok, so the Fed has incentivized banks to hold long duration treasuries (remember the talks of yield curve control just 24 months ago?), but uh oh, now we have an inflation problem!  Don't worry though, we'll just raise interest rates at the fastest pace in history to combat the problem that we created, and in turn send bond yields into the relative stratosphere.  What does that do to value of existing treasuries?  You guessed it, they took a massive nose dive, to the point where 2022 was the worst year for bonds in recorded history.  Hmm, so now all of those bonds held by banks (and it's all of them) are now worth just a fraction of what they were purchased for, but that shouldn't be a problem because they'll just be held to maturity and the losses never realized, right?

 

- That is, unless a panic ensues and deposits are withdrawn.  Now, those bonds that were being held at an unrealized loss on the balance sheet are forced into liquidation to raise capital to meet withdraws, making those losses very real.  The effect snowballs, and pretty soon the bank can't meet customer needs so the problem gets exponentially worse.  That's essentially in a nutshell what happened here as I understand it.  This wasn't due to "woke investing" or "rich people being shady", this is a systemic problem and I can all but guarantee that we are going to see similar defaults if the bank runs get out of control.  There is not way that even the large banks don't have massive unrealized bond losses on their balance sheets, but the bigger ones can weather the storm while the smaller regional banks are going to be under massive pressure.  

 

In the end I have a feeling that we're going to see even more centralization within the banking industry as larger banks take over the smaller regional ones during the crisis.  The market cap percentage of regional banks vs national ones has been in a very steady decline over the last 40 years and this will play directly into that trend with mergers and accuisitions.  The Fed now has a choice to begin easing monetary supply again to depress bond yields, or stay on the hiking path and hope that the systemic risk is concentrated in smaller banks.  To me the only real way out of this mess is crypto, but that's a whole new can of worms to dive into.  

TDeath21 wrote:

President Biden: "Investors in the banks will not be protected. They knowingly took a risk and when the risk didn't pay off, the investors lose their...

President Biden:

"Investors in the banks will not be protected. They knowingly took a risk and when the risk didn't pay off, the investors lose their money. That's how capitalism works."

People with accounts there are still protected and will not lose any of their money.

TDeath21 wrote:

President Biden: "Investors in the banks will not be protected. They knowingly took a risk and when the risk didn't pay off, the investors lose their...

President Biden:

"Investors in the banks will not be protected. They knowingly took a risk and when the risk didn't pay off, the investors lose their money. That's how capitalism works."

People with accounts there are still protected and will not lose any of their money.

TeamGreen wrote:

But, how do we explain the insuring of accounts beyond the FDIC cap…? Why is this happening? Who benefits? How is it that The President can...

But, how do we explain the insuring of accounts beyond the FDIC cap…?

Why is this happening?

Who benefits?

How is it that The President can just reach into the FDIC coffers and give money beyond the written rule? 

What the fuck is going on…really…?

Brad460 wrote:

The CEO donated to Biden and Schumer..he will be just fine. He will get to keep his bonuses and money he made cashing in his stock...

The CEO donated to Biden and Schumer..he will be just fine. He will get to keep his bonuses and money he made cashing in his stock knowing it was going crash..

 

eddie wrote:

I wonder if any politicians cashed out before the crash … 

JM485 wrote:

Before we get too far down the anti-woke rabbit hole let's take a look at a few aspects of what caused this and why it could...

Before we get too far down the anti-woke rabbit hole let's take a look at a few aspects of what caused this and why it could end up being systemic if left unchecked.  This goes way beyond the narrative that a lot of you are trying to latch onto, and this has nothing to do with one team or another but a broken financial system at large.  This is how things played out as I understand it:

 

- Banks are highly regulated in what they are allowed to invest in.  After the GFC bank investments came under massive scrutiny and for good reason, we narrowly avoided a complete global meltdown due to over leverage in the real estate market.  Now, with that said, banks handle deposited funds by either lending them out, or investing in assets such as treasuries.  Banks are highly encouraged to invest in "risk free" treasuries because they are generally considered the safest and most liquid assets in the world, plus they offer some kind of yield (this has been depressed over the last 15 years or so, but more on that later)

 

- Now, let's say you're a bank that has a high exposure to tech investments (such as SV and you need to hedge that exposure, what do you do?  You buy long duration treasuries.  What does the Fed incentivize you to do?  Buy long duration treasuries.  So, I don't think it's too far fetched to say that the decision to hold long duration treasuries from a risk management perspective makes sense, especially given a risk-free yield.  But, because that yield has been so depressed over the last decade or more, to get any kind of real return banks have had to get more and more levered, which increases risk.

 

- Ok, so the Fed has incentivized banks to hold long duration treasuries (remember the talks of yield curve control just 24 months ago?), but uh oh, now we have an inflation problem!  Don't worry though, we'll just raise interest rates at the fastest pace in history to combat the problem that we created, and in turn send bond yields into the relative stratosphere.  What does that do to value of existing treasuries?  You guessed it, they took a massive nose dive, to the point where 2022 was the worst year for bonds in recorded history.  Hmm, so now all of those bonds held by banks (and it's all of them) are now worth just a fraction of what they were purchased for, but that shouldn't be a problem because they'll just be held to maturity and the losses never realized, right?

 

- That is, unless a panic ensues and deposits are withdrawn.  Now, those bonds that were being held at an unrealized loss on the balance sheet are forced into liquidation to raise capital to meet withdraws, making those losses very real.  The effect snowballs, and pretty soon the bank can't meet customer needs so the problem gets exponentially worse.  That's essentially in a nutshell what happened here as I understand it.  This wasn't due to "woke investing" or "rich people being shady", this is a systemic problem and I can all but guarantee that we are going to see similar defaults if the bank runs get out of control.  There is not way that even the large banks don't have massive unrealized bond losses on their balance sheets, but the bigger ones can weather the storm while the smaller regional banks are going to be under massive pressure.  

 

In the end I have a feeling that we're going to see even more centralization within the banking industry as larger banks take over the smaller regional ones during the crisis.  The market cap percentage of regional banks vs national ones has been in a very steady decline over the last 40 years and this will play directly into that trend with mergers and accuisitions.  The Fed now has a choice to begin easing monetary supply again to depress bond yields, or stay on the hiking path and hope that the systemic risk is concentrated in smaller banks.  To me the only real way out of this mess is crypto, but that's a whole new can of worms to dive into.  

eddie wrote:

I wonder if any politicians cashed out before the crash … 

jchek779 wrote:

Gavin Newsome

TDeath21 wrote:

President Biden: "Investors in the banks will not be protected. They knowingly took a risk and when the risk didn't pay off, the investors lose their...

President Biden:

"Investors in the banks will not be protected. They knowingly took a risk and when the risk didn't pay off, the investors lose their money. That's how capitalism works."

People with accounts there are still protected and will not lose any of their money.

TDeath21 wrote:

President Biden: "Investors in the banks will not be protected. They knowingly took a risk and when the risk didn't pay off, the investors lose their...

President Biden:

"Investors in the banks will not be protected. They knowingly took a risk and when the risk didn't pay off, the investors lose their money. That's how capitalism works."

People with accounts there are still protected and will not lose any of their money.

Bill_Carroll wrote:

Ironic LMAO!   https://www.thegatewaypundit.com/2023/03/barney-frank-the-namesake-of-the-behemoth-dodd-frank-legislation-on-board-of-failed-signature-bank/ "Frank left the House and was assigned to the Board of Signature Bank.  This bank was little known until a couple of years...

Ironic LMAO!   https://www.thegatewaypundit.com/2023/03/barney-frank-the-namesake-of-t…

"Frank left the House and was assigned to the Board of Signature Bank.  This bank was little known until a couple of years ago when the bank decided to kick President Trump out of the bank by closing his accounts.  This was a political move and it has now come back to haunt the bank."

jeffro503 wrote:

I guess one of the things SIVB donated money to was "Black lives matter "......73 Million dollars actually. They failed , other banks jump in and...

I guess one of the things SIVB donated money to was "Black lives matter "......73 Million dollars actually.

They failed , other banks jump in and fail.......and we pay for it.

Tax payers , customers of the bank , paid BLM 73 million dollars.

Even if you're like me , and hate BLM with every fiber of my being , in the long run , they forced me to give BLM money. That is just ONE outfit they donated too. How many more were there?

 

jeffro503 wrote:

I just don't get the entire picture. Just 3 years ago , we had a strong border , one of the strongest economies ever , other...

I just don't get the entire picture.

Just 3 years ago , we had a strong border , one of the strongest economies ever , other countries around the world respected us. Now we're in financial collapse , border is wide open , we look weak to other countries.......on top of being on the verge of WW3 , and if that isn't enough , a possible "bird flu " , with a 60% death rate may sweep across the planet.

I can't put the blame on just one person. I'm just saying , this world seems to be going to shit. Like real fast , complete shit. Even if I unplug from watching the news , everyone else still does. So I hear it , see it , I can't get away from it.

Burying my head in the sand doesn't make it better.....and listening to it , is even worse.

NvHermit wrote:

Weak ?

You guys sound weak letting these libtards cornhole you like this.

Stop being pussies and revolt, take your country back

 

NvHermit wrote:

Weak ?

You guys sound weak letting these libtards cornhole you like this.

Stop being pussies and revolt, take your country back

 

Muttly wrote:

You’re sounding waaay too aggressive for a pothead. Have you been outside today? 

NvHermit wrote:

Weak ?

You guys sound weak letting these libtards cornhole you like this.

Stop being pussies and revolt, take your country back

 

NvHermit wrote:

Weak ?

You guys sound weak letting these libtards cornhole you like this.

Stop being pussies and revolt, take your country back

 

jeffro503 wrote:

Rick , go smoke a big fatty, go kill something and then cook up something good like you know how too.    Unfortunately, some of us...

Rick , go smoke a big fatty, go kill something and then cook up something good like you know how too. 

 

Unfortunately, some of us have to live around this stupid shit. We should all be as lucky to live out in the middle of nowhere and not worry about it. Which isn't possible for some of us. 

NvHermit wrote:

Weak ?

You guys sound weak letting these libtards cornhole you like this.

Stop being pussies and revolt, take your country back

 

jeffro503 wrote:

Rick , go smoke a big fatty, go kill something and then cook up something good like you know how too.    Unfortunately, some of us...

Rick , go smoke a big fatty, go kill something and then cook up something good like you know how too. 

 

Unfortunately, some of us have to live around this stupid shit. We should all be as lucky to live out in the middle of nowhere and not worry about it. Which isn't possible for some of us.