Silicon Valley Bank Collapse

[Weirfan]

Surprised this hasn't been discussed....a PBD , IMO.

Not everyday we see a run on a "big" US Bank forcing it collapse and be taken over by the FDIC.

The fallout and after shocks remain to be seen, several companies had holdings there, some substantial

These companies held money at Silicon Valley Bank and aren’t sure if they’ll recover the funds
https://www.cnn.com/2023/03/10/busin...ash/index.html

[threeputt]

They were the 16th largest bank in the US, should be an interesting week in the markets!!!

[Bosco]

SVB - hey there market - all is well, nothing to see here n then….we gots some problems

Silvergate Capital is also on the wrong type of fuego

https://markets.businessinsider.com/...ves-2023-3?amp

[Bosco]

Another view on this from the NYT.

https://www.nytimes.com/2023/03/11/t...investing.html

[Chambokl]

I wonder who decided it was a good idea to rollback the bank regulations in 2017 . . . I wonder if it was one of the reason . . .

[Bellyhungry]

Just saw in the news that there will be no bailout by the Feds.

Why do tech companies go to them rather than the traditional much bigger banks?

[Weirfan]

Just saw in the news that there will be no bailout by the Feds.

Why do tech companies go to them rather than the traditional much bigger banks?

No but at least money for depositors will be guaranteed.

"Banking regulators devised a plan Sunday to backstop depositors with money at Silicon Valley Bank, a critical step in stemming a feared panic over the collapsed tech-focused institution.

Regulators said depositors at both SVB and Signature Bank in New York, which also has been closed, will have full access to their deposits.

The Treasury Department said it approved of plans that would unwind both institutions “in a manner that fully protects all depositors.” Those with money at the bank will have full access starting Monday.

The Federal Reserve also said it is creating a new Bank Term Funding Program aimed at safeguarding institutions impacted by the market instability of the SVB failure.

A joint statement also said there would be no bailouts and no taxpayer costs associated with any of the new plans. Shareholders and some unsecured creditors won’t be protected."

US government steps in and says people with money deposited at SVB will be able to access their money
https://www.cnbc.com/2023/03/12/regu...-collapse.html

[unskinnybop99]

Bad news equals buying opportunities...

“Be fearful when others are greedy and greedy when others are fearful.” —Warren Buffett

[Chambokl]

Bad news equals buying opportunities...

“Be fearful when others are greedy and greedy when others are fearful.” —Warren Buffett

In late February, top executives of SVB sold for $4.5 million worth of shares. They seem to know what was coming . . . are they going to jail or just another petty white collar crime . . .

[ace in the hazard]

The feds have closed Signature Bank in NY but have guaranteed that all depositors to both Signature and SVB will be made whole at no cost to taxpayers. It's a pretty neat trick...they effectively wipe out equity and debtholders in the banks, (therefore allowing the market to take it's pound of flesh), and pay out all depositors from a combination of asset sales and a levy on all other banks (to make up any shortfall). This avoids a fire-sale of assets at a massive haircut and (hopefully) stems any possible contagion as the wider market regains confidence. Senior management at both banks are all axed.

[Benz]

The conservatives decry 'government interference' in business until, that is, it's time to ask for a bailout.

[Marty Canuck]

In late February, top executives of SVB sold for $4.5 million worth of shares. They seem to know what was coming . . . are they going to jail or just another petty white collar crime . . .

“Victimless” crime is the word you want JG! If depositors get their funs safely nobody loves a bank!

[Bosco]

Wonder if Silvergate Capital will also get an assist?

[Fredk]

The feds have closed Signature Bank in NY but have guaranteed that all depositors to both Signature and SVB will be made whole at no cost to taxpayers. It's a pretty neat trick...they effectively wipe out equity and debtholders in the banks, (therefore allowing the market to take it's pound of flesh), and pay out all depositors from a combination of asset sales and a levy on all other banks (to make up any shortfall). This avoids a fire-sale of assets at a massive haircut and (hopefully) stems any possible contagion as the wider market regains confidence. Senior management at both banks are all axed.

This is a much better solution than what they did in the banking crisis the last time around.

[Weirfan]

This is a much better solution than what they did in the banking crisis the last time around.

they are most certainly scrambling to save both the financial system and their political lives.

meanwhile DeSantis has the problem that lead to the collapse identified
"Florida Gov. Ron DeSantis, showing his determination to leverage every issue to reinforce a culture-driven narrative for his potential presidential bid, accused SVB executives of being more interested in diversity and inclusion training than high finance."