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Now had those bankers listened to Paul Pelosi this would not have happened.

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I worked at the FHLB of NY in the 80's. It's usually real estate. Unrestrained toxic home loans turned into AAA derivatives. How can this be, we gained 200 employees overnight when the S&L regulators were folded into the FHLB system.

After the bloodbath (liquidating the belly up S&L banks) the RTC was formed (huge money wash) we lost those 200 employees over night.

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Originally Posted by OldmanoftheSea
Some 37,4xx accounts of 143,8xx (business accounts?) Are over the FDIC limit on average by $4.25m each meaning of the 176 or so billion of deposits only 21 billion is FDIC insured. If those are business accounts then expect at least 15,000 or so companies to hit the rocks.

Silicon Valley Bank (SVB) Fails, Now the Idiots Are Considering a Taxpayer Bailout

Now, as ridiculous as this sounds outside Silicon Valley, the powers that be are concerned about a ‘contagion‘ effect, and openly discussing the need for a taxpayer funded bailout. Blood-boiling doesn’t even begin to describe the sensation.

Let the Silicon Valley companies who started with the funds from the bank sell some of their capitalization on the market and finance the bailout themselves. After all, this is one interconnected system of lenders, borrowers and investors. This is not a crisis for the guy making their catered lunches, mowing their lawns, or washing their clothes.

https://theconservativetreehouse.co...iots-are-considering-a-taxpayer-bailout/

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Originally Posted by GeoW
Kids playing loose and free with other people's money. Not much different than Sam Bankman-Fried.

You are wrong about the kids part but right about at least one very important characteristic between SVB and FTX. Here is SVB's boomer CEO, any guesses as to what he and SBF have in common?

A little hint: 24 hours before SVB collapsed, after he had been selling off his shares in the bank for more than 2 weeks, he assured customers their funds were safe and there was no reason to pull them out.

[Linked Image from reuters.com]

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Buy Treasury bonds....the country is only $31 trillion dollars in debt. Everything is smoke and mirrors.


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Originally Posted by Stickfight
Originally Posted by GeoW
Kids playing loose and free with other people's money. Not much different than Sam Bankman-Fried.

You are wrong about the kids part but right about at least one very important characteristic between SVB and FTX. Here is SVB's boomer CEO, any guesses as to what he and SBF have in common?

A little hint: 24 hours before SVB collapsed, after he had been selling off his shares in the bank for more than 2 weeks, he assured customers their funds were safe and there was no reason to pull them out.

[Linked Image from reuters.com]
Azzhole needs to hung by the neck till dead.


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Back when Corp's issued stock certificates, you received some poor quality toilet paper for your money, now your buying air and a promise, keep shoveling money into the market and keep your head in the sand and go enjoying life. Rio7

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Bank's plan: Hire minorities that will invest in long term gov bonds.


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The man who makes no mistakes does not usually make anything.-- Edward John Phelps
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I haven't seen any suggestion of fraud up to this point. Just reserves held in low yielding marketable securities in the new era of a 5% yield resulting in liquidating at a loss. Add in a good old fashioned run on the bank and presto! Not sure ANY bank could stand a run on deposits if everyone wanted to exit at the same time.
School me if I'm wrong but the depositors shouldn't make out too bad, even if over 250K. Now the shareholders are a completely different story.

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Seems that Uncle Sugar is going to make good the depositors in SVB. Market futures up, Bitcoin up.....for now.

https://www.foxbusiness.com/politic...ut-approach-silicon-valley-bank-collapse


"Men must be governed by God or they will be ruled by tyrants". --- William Penn

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Originally Posted by BC3
I haven't seen any suggestion of fraud up to this point. Just reserves held in low yielding marketable securities in the new era of a 5% yield resulting in liquidating at a loss. Add in a good old fashioned run on the bank and presto! Not sure ANY bank could stand a run on deposits if everyone wanted to exit at the same time.
School me if I'm wrong but the depositors shouldn't make out too bad, even if over 250K. Now the shareholders are a completely different story.
I think you are correct, bc3. No fraud, just extremely poor bond portfolio risk management. Something they should be good at after 30 years (or more). Then there is the bad optics of the bonuses that went out Thursday.

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wow this showed up fast!


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Originally Posted by BeerWhisperer
Originally Posted by BC3
I haven't seen any suggestion of fraud up to this point. Just reserves held in low yielding marketable securities in the new era of a 5% yield resulting in liquidating at a loss. Add in a good old fashioned run on the bank and presto! Not sure ANY bank could stand a run on deposits if everyone wanted to exit at the same time.
School me if I'm wrong but the depositors shouldn't make out too bad, even if over 250K. Now the shareholders are a completely different story.
I think you are correct, bc3. No fraud, just extremely poor bond portfolio risk management. Something they should be good at after 30 years (or more). Then there is the bad optics of the bonuses that went out Thursday.
No risk management officer since april 2022 and the chief administrative officers last employer...Lehman brothers.


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I do not know if any one here will understand this , but I will throw it out here.

SVB took in a large amount of deposits, not out of the ordinary,as time went quickly by they could not loan enough to balance.

Someone , bank officers now gone, made the decision to buy long term bonds. As the fed RAPIDLY raised rates , to thwart inflation, the bonds value decreased.

SVB had to sell bonds at undrvalued prices to stay afloat.This quickly changed their bottom line to negative.

Also, ESG funds entered into the picture on a smaller scale . ESG Funds are money losers.

There are other factors . However, this is basically what happened. Had SVB been at 80% > 20 % ratio, in time their play on bonds would have played out but they were top

heavy to began with.

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Originally Posted by Bristoe
Silicon Valley Bank opened in 1983 to service new startups in the tech industry. California's high taxation is causing new tech startups to locate in other areas.

Basically, Silicon Valley Bank lost its customer base.

It's California. The entire state is in decline. The California banks will fail along with everything else.

SVB's customer base was not necessarily all California. SVB had a great headquarters location to access tech VC and PE funds so there was (is) heavy deposit base from CA for that reason. They operate in many states (not just CA) and have possibly the best commercial treasury management system in the country and therefore attracted deposits from private equity and real estate funds from all over the nation because fund managers care about treasury management systems. If what has been reported is correct, around 90% of the deposits were over the FDIC $250K limit, likely because fund managers tend to keep pretty hefty deposits on hand.

My understanding is that multiple dominos fell to make this collapse happen: deposit base decreasing because of weakness in the tech sector and leadership not getting ahead of that phenomenon, making the "safe" decision to load up on Treasuries at 80 bps yield a few years ago, having to sell those treasuries at a discount recently because of increased yields in those markets, stock price plummeting as a result of these actions, VC / PE / CRE fund managers encouraging each other to pull deposits, etc.

Some of these issues originate with the Fed pushing interest rates to control inflation. I'm sure there are other banks that hold Treasuries that can't sell them without taking a loss as SVB was forced to do. Also, mortgages and home loans are a related category. I'm sure some banks are holding low-yielding "jumbo" mortgages on book that they can't exit without taking a loss. Other problems right now could include developers not being able to exit construction loans because they underwrote lower interest rates and a handful of issues in CRE markets with certain product types that may see assets end up in bank OREO departments.

Unless they pull a rabbit out of a hat, which they might, the Fed appears to me to be in a position where they can keep raising rates and risk additional bank failures or they can start dropping rates in which case they will have to deal with additional inflation. Somewhat of an intellectually interesting conundrum with major consequences whatever they decide. With that said, they have pulled a few rabbits out of hats over the years. Two I can think of off the top of my head were Operation Twist 50 or 60 years ago and how they used QE in 2008.

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More old news, but interesting.


Israelis 2 largest banks were able to transfer 1 billon $ out of SVB between the time the bank failed and the Feds took over.

It pays to pay attention.

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I bought 130 shares at .13 cents each.. It is now 2 bucks. I wonder if it will go up . It is possible that it will delist thought, right?


But the fruits of the spirit is love, joy, peace, patience, kindness, goodness,faithfulness, Gentleness and self control. Against such things there is no law. Galations 5: 22&23
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