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Thread: SVB: One of Silicon Valley’s top banks fails; assets are seized

  1. #61
    Quote Originally Posted by Swordsmyth View Post
    We believe our lying eyes...



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  3. #62
    Quote Originally Posted by Swordsmyth View Post
    We believe our lying eyes...

  4. #63
    Quote Originally Posted by acptulsa View Post
    I take it that was 50 minutes before new york signature bank went under ( third largest US bank failure four days after second largest US bank failure)
    Last edited by oyarde; 03-13-2023 at 08:31 AM.
    Do something Danke

  5. #64
    Quote Originally Posted by Krugminator2 View Post
    SVB and Signature bank went under. Equity and bond holders are getting zero. Management lost their jobs. So there isn't an incentive to go full retard.
    That's true but on the other hand there's pressure for the banks to offer higher yields so eventually they will go full retard or they'll go under.



    Quote Originally Posted by Krugminator2 View Post
    But that is whole problem with fractional reserve banking. There is no free market solution. It is why Rothbard thought fractional reserve banking should be outlawed as the least bad option. You had three bank failures this week. If you don't take action now, there is going to be infinitely more costly action taken later when people panic pull money out.

    Interest rates have gone up rapidly and most bank assets are at lower rates. How many other vulnerable banks would there be if people want to cash out in mass and those other banks have to sell assets at a loss? It sounds great to just let the world go to hell. That's how you end up with a stock market that drops 95% and people waiting in soup lines like the Great Depression. Banks should probably be treated like utilities and be a boring heavily regulated business under the current system. If you have an alternative free market solution that works, I would love to hear. Rothbard thought every action by government was socialism. But he made one pretty big exception with banking.
    Outlawing fractional reserve banking makes no sense to me, why not let the customers decide? As long as the bank is not lying about its position.

    You were wrong about QE not causing inflation and you're going to be wrong about the price inflation being temporary. As soon as the Fed does a hard pivot commodities are going to make all time highs and price inflation will as well.



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  7. #65
    A good explanation of what happened to SVB:




    https://youtu.be/t5w5mk1_K3A
    __________________________________________________ ________________
    "A politician will do almost anything to keep their job, even become a patriot" - Hearst

  8. #66
    Quote Originally Posted by devil21 View Post
    ... Fed will value SPV collateral (Treasuries and MBS, etc) at mark-to-fantasy values, not mark-to-market values. ...

    What could possibly go wrong?

  9. #67
    Quote Originally Posted by acptulsa View Post
    Cramered

  10. #68
    Quote Originally Posted by Bern View Post
    Cramered
    BTW, I can't find that tweet on Cramer's feed. It's either been deleted or the image is a joke/photoshop.

  11. #69

  12. #70
    Michael Burry: 'We Found Our Enron'

    https://www.msn.com/en-us/money/mark...19e501bc&ei=60

    Quote Originally Posted by timosman View Post
    This is getting silly.
    Quote Originally Posted by Swordsmyth View Post
    It started silly.
    T.S. Eliot's The Hollow Men

    "One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors." - Plato

    We Are Running Out of Time - Mini Me

    Quote Originally Posted by Philhelm
    I part ways with "libertarianism" when it transitions from ideology grounded in logic into self-defeating autism for the sake of ideological purity.

  13. #71
    __________________________________________________ ________________
    "A politician will do almost anything to keep their job, even become a patriot" - Hearst

  14. #72
    Quote Originally Posted by Madison320 View Post


    You were wrong about QE not causing inflation and you're going to be wrong about the price inflation being temporary. As soon as the Fed does a hard pivot commodities are going to make all time highs and price inflation will as well.
    Not that it matters couldn't have been more right. It almost reads like I had a crystal ball. And it wasn't me. I just listened to a handful of monetarists Jeremy Siegel, Steve Hanke and Scott Sumner and ripped their ideas off. It isn't even worth arguing.

    From March 2021 when inflation was 2% (responding to your posts from then)

    Quote Originally Posted by Krugminator2 View Post
    M2 growth and expectations for future M2 growth determine inflation.

    Between 2009 and 2019, M2 money only grew at 5% annually. The economy grew at 2.5% annually over time, so the M2 growth rate minus economic growth roughly matched the inflation rate. So that explains the low inflation rate.

    M2 grew at 26% since Covid hit last year and is projected to grow by double digits in 2021. Higher inflation is a certainty this time. Part of the reason it has been slow to show up is because people have been slow to anticipate inflation because there have been so many inflationistas the last 11 years. This time actually is different. And once the psychology changes people will start to bid up prices.

    Growth in M2 doesn't have to match the inflation rate if people anticipate the Fed dramatically slowing the growth in M2 in the future. Expectations of monetary policy are far more influential than the current stance of money policy.
    Quote Originally Posted by Krugminator2 View Post
    I think the Fed will be reluctant to tighten if inflation runs at even 4%. I think they will call it make up inflation for running below 2% for so long.

    M2 grew at 26% last year. M4 which apparently is a better metric grew at 28%. M2 is on pace to grow at well into double digits this year. So far markets aren't sending a clear inflation signal. Been wrong on soybeans, oats, and silver. I did just buy some palladium tonight. Maybe I am stubborn but really think inflation is going to be a thing and I think the Fed will be slow to do anything about it.
    Last edited by Krugminator2; 03-13-2023 at 10:41 AM.



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  16. #73
    Quote Originally Posted by Krugminator2 View Post
    Not that it matters couldn't have been more right. It almost reads like I had a crystal ball. And it wasn't me. I just listened to a handful of monetarists Jeremy Siegel, Steve Hanke and Scott Sumner and ripped their ideas off. It isn't even worth arguing.

    From March 2021 when inflation was 2% (responding to your posts from then)
    Yeah, but by then it was too late. I'm talking about a year earlier when covid hit and you were calling for 6 trillion in QE. Your theory is that M2 just magically goes up for no apparent reason.

    Do you think inflation is under control now and not going to be a problem for the next few years?


    Edit: I went and looked up the cpi numbers. The cpi started rising a couple months BEFORE you predicted it to rise!!! You need a new crystal ball.

    https://www.bls.gov/charts/consumer-...line-chart.htm
    Last edited by Madison320; 03-13-2023 at 10:58 AM.

  17. #74
    Quote Originally Posted by Madison320 View Post
    Yeah, but by then it was too late. I'm talking about a year earlier when covid hit and you were calling for 6 trillion in QE. Your theory is that M2 just magically goes up for no apparent reason.

    Do you think inflation is under control now and not going to be a problem for the next few years?


    Edit: I went and looked up the cpi numbers. The cpi started rising a couple months BEFORE you predicted it to rise!!! You need a new crystal ball.

    https://www.bls.gov/charts/consumer-...line-chart.htm

    1. Wasn't even close to too late. Inflation expectations were still low single digits. The Fed eased for another 14 months after I wrote that. Expectations have a large influence on inflation. You live on an isolated island society with $1 million in circulation. Someone drops another $1 million on the island. Is that always inflationary? If the people on the island think that new money is permanently in circulation prices will double quickly. If people think someone will take back the $1million they dropped on the island in a few months it will have no impact on prices.

    2. I have no idea what inflation will be years down the road. That is impacted by future policy decisions. Hanke thinks 2-5% by year end. https://www.wsj.com/articles/high-in...ction-e2259a30

    3. The official CPI numbers that had already been released would have been either 1.4% or 1.7%. What more do you want? Not only that, it was based off this article which was written in February of that year which is when I first mentioned it.

    Last edited by Krugminator2; 03-13-2023 at 12:33 PM.

  18. #75
    Good 'ol Massie. Look at the 7 million views.

    Quote Originally Posted by timosman View Post
    This is getting silly.
    Quote Originally Posted by Swordsmyth View Post
    It started silly.
    T.S. Eliot's The Hollow Men

    "One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors." - Plato

    We Are Running Out of Time - Mini Me

    Quote Originally Posted by Philhelm
    I part ways with "libertarianism" when it transitions from ideology grounded in logic into self-defeating autism for the sake of ideological purity.

  19. #76
    Quote Originally Posted by Krugminator2 View Post
    1. Wasn't even close to too late. Inflation expectations were still low single digits. The Fed eased for another 14 months after I wrote that. Expectations have a large influence on inflation. You live on an isolated island society with $1 million in circulation. Someone drops $1 million on the island. Is that always inflationary? If the people on the island think that money is permanently in circulation prices will double quickly. If people think someone will take back the $1million they dropped on the island in a few months it will have no impact on prices.
    2.

    3. The official CPI numbers that had already been released would have been either 1.4% or 1.7%. What more do you want? Not only that, it was based off this article which was written in February of that year which is when I first mentioned it.
    Ok, so you agree that if the fed doesn't reduce its balance sheet prices have a long way to go up, right?

    You keep skipping the part where you were calling on the fed to print 6 trillion in early 2020. That's when it was too late.

    So what do you think is going to happen with prices (specifically housing, energy, food) over the next few years?

    Assuming they use the current methodology I think the CPI will be well north of 10% and commodities like copper, wheat, oil will all be at record highs.

  20. #77
    WHAT IF I TOLD YOU

    THE REAL REASON SILICON VALLEY BANK WAS FIRST

    IS BECAUSE THEY ARE THE ELITES AND WERE TIPPED OFF
    "When Sombart says: "Capitalism is born from the money-loan", I should like to add to this: Capitalism actually exists only in the money-loan;" - Theodor Fritsch

  21. #78
    https://twitter.com/catturd2/status/1635249281161646080

    Quote Originally Posted by Swordsmyth View Post
    We believe our lying eyes...

  22. #79
    Quote Originally Posted by Swordsmyth View Post
    We believe our lying eyes...

  23. #80
    Quote Originally Posted by nobody's_hero View Post
    If SVB is that solvent, wouldn't it be appetizing to someone else wanting to buy it out?

    Kinda like when the major mortgage lenders got propped up in 2008. (not exactly the same, but bear with me) When someone who fails gets propped up, doesn't it cause a missed opportunity for competitors who might have a had an opportunity to 'buy in'?

    I feel like we're dancing the 'too big to fail' dance again. Seems what we really mean is: 'too big to be bought out by a competitor who could manage things better.'

    And conversely, if SVB is just downright toxic and no one wants to buy it, that in itself is a red flag, and it makes you wonder if there shouldn't perhaps be more stipulations if a bank is going to be FDIC insured.

    If some yokel starts up a bank tomorrow does he just automatically get FDIC insured? (asking honestly, I don't know how it all works)
    Great point. According an article posted above, it happened too quickly for a buyer. But we know that SVB had plenty of assets, even if they weren't liquid, and they had to take a loss to sell some of them. The price of bonds did not go to zero. And their Mortgage Backed Securities (MBS) were not in a crisis at this point. The housing market did not collapse.

    Quote Originally Posted by CCTelander View Post
    https://apnews.com/article/svb-fed-b...6cd120aa9b7966

    Shortly before noon, the FDIC moved to shutter the bank. Notably, the agency did not wait until the close of business, which is the typical approach. The FDIC could not immediately find a buyer for the bank’s assets, signaling how fast depositors cashed out.
    Last edited by Brian4Liberty; 03-13-2023 at 01:29 PM.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.



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  25. #81
    Quote Originally Posted by Snowball View Post
    WHAT IF I TOLD YOU

    THE REAL REASON SILICON VALLEY BANK WAS FIRST

    IS BECAUSE THEY ARE THE ELITES AND WERE TIPPED OFF
    There's no doubt that what we are seeing right now is a panic. Panics are irrational.

    Peter Theil may have triggered the panic, because he saw that SVB was having problems with large transactions, and pulled all of his money out:

    Peter Thiel's Founders Fund had no cash left in Silicon Valley Bank by Thursday as it began to unravel, Bloomberg reported.

    A source told Bloomberg the PayPal cofounder's fund had moved to close its exposure to the failing bank after running into problems using SVB's services.

    The venture capital group had been engaging in a "capital call" — where it asked investment partners to send funds to invest in a company — by transferring funds to its Silicon Valley Bank account. However, the funds didn't immediately go through as expected.

    Following the withdrawals, the fund no longer had any exposure to SVB as of Thursday morning, the unnamed source told Bloomberg. It wasn't clear whether the transfers happened on that day, or earlier.

    SVB's share price collapsed after it revealed a $1.8 billion loss Thursday following a $21 billion fire sale of its fixed-income portfolio.

    An attempt to raise $2.3 billion to cover those losses failed and the Federal Deposit Insurance Corporation shut it down and took control of customer deposits Friday.
    ...
    https://www.businessinsider.com/pete...-report-2023-3
    It's not just bank withdrawals, it's panic selling of bank stocks. And when that happens, cui bono? No doubt the (elite?) short sellers have been going crazy since last week. It's a downward spiral of greed and panic.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  26. #82
    Quote Originally Posted by acptulsa View Post
    Panic has set in. Cui bono?
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  27. #83

    https://twitter.com/RepThomasMassie/...10094132076544
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  28. #84

    https://twitter.com/USAB4L/status/1635367730059837441
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  29. #85
    Charlie Gasparino on Fox Business is saying that SVB took huge risks with loans (to venture capital groups and private equity firms), so much that they should have been considered a VC firm themselves instead of an FDIC insured bank.

    A lot of the stock in SBV was owned by Vanguard, Black Rock, etc. ETFs. So a lot of mom & pop investors (and probably pension funds) lost money on this collapse.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  30. #86
    Quote Originally Posted by Madison320 View Post
    Yeah, but by then it was too late. I'm talking about a year earlier when covid hit and you were calling for 6 trillion in QE. Your theory is that M2 just magically goes up for no apparent reason.

    Do you think inflation is under control now and not going to be a problem for the next few years?


    Edit: I went and looked up the cpi numbers. The cpi started rising a couple months BEFORE you predicted it to rise!!! You need a new crystal ball.

    https://www.bls.gov/charts/consumer-...line-chart.htm
    Inflation will stop because the economy will freeze. Transaction volumes and hiring will creep to a halt. Already happening.
    "When Sombart says: "Capitalism is born from the money-loan", I should like to add to this: Capitalism actually exists only in the money-loan;" - Theodor Fritsch

  31. #87
    Quote Originally Posted by Brian4Liberty View Post

    https://twitter.com/RepThomasMassie/...10094132076544
    This is about right , the good banks will pay the FDIC by charging customers more
    Do something Danke

  32. #88
    Quote Originally Posted by nobody's_hero View Post
    If SVB is that solvent, wouldn't it be appetizing to someone else wanting to buy it out?

    Kinda like when the major mortgage lenders got propped up in 2008. (not exactly the same, but bear with me) When someone who fails gets propped up, doesn't it cause a missed opportunity for competitors who might have a had an opportunity to 'buy in'?

    I feel like we're dancing the 'too big to fail' dance again. Seems what we really mean is: 'too big to be bought out by a competitor who could manage things better.'

    And conversely, if SVB is just downright toxic and no one wants to buy it, that in itself is a red flag, and it makes you wonder if there shouldn't perhaps be more stipulations if a bank is going to be FDIC insured.

    If some yokel starts up a bank tomorrow does he just automatically get FDIC insured? (asking honestly, I don't know how it all works)
    Quote Originally Posted by Brian4Liberty View Post
    Great point. According an article posted above, it happened too quickly for a buyer. But we know that SVB had plenty of assets, even if they weren't liquid, and they had to take a loss to sell some of them. The price of bonds did not go to zero. And their Mortgage Backed Securities (MBS) were not in a crisis at this point. The housing market did not collapse.
    Two rumors on Fox Business today:

    - The last time JP Morgan and others bought failing banks, they got screwed. Massive liabilities. Likewise SVB appears to have a lot of bad loans out, on top of declining assets (long term debt instruments).

    - Elizabeth Warren's associates are preventing the approval of a buy-out.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.



  33. Remove this section of ads by registering.
  34. #89
    Quote Originally Posted by Snowball View Post
    Inflation will stop because the economy will freeze. Transaction volumes and hiring will creep to a halt. Already happening.
    It's a myth that recession stops inflation. It's true that people spend less during a recession but they also produce less stuff. And governments tend to run much bigger deficits therefore print more money in recession. Look at countries that have had high to hyper-inflation. Their economies are always screwed up.

  35. #90
    I’d Buy That for a Dollar!
    9 MIN AGORobert Aro
    What a weekend! On Sunday morning Treasury Secretary Janet Yellen told CBS there would be no bailouts. Later that day the Fed declared Quantitative Easing to infinity and beyond.

    What’s going on?

    Quite simply: the Fed is willing to overpay for debt (again). They call it the Bank Term Funding Program (BTFP), and as far as one can tell, its dollar value is limitless. The term sheet reads:

    Program: To provide liquidity to U.S. depository institutions, each Federal Reserve Bank would make advances to eligible borrowers, taking as collateral certain types of securities.

    And who is eligible?

    Any U.S. federally insured depository institution (including a bank, savings association, or credit union) or U.S. branch or agency of a foreign bank…

    Basically everyone (i.e., not you or main street, just financial institutions) can take part in this legal counterfeiting operation.
    Continued at link: https://mises.org/power-market/id-buy-dollar
    Quote Originally Posted by timosman View Post
    This is getting silly.
    Quote Originally Posted by Swordsmyth View Post
    It started silly.
    T.S. Eliot's The Hollow Men

    "One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors." - Plato

    We Are Running Out of Time - Mini Me

    Quote Originally Posted by Philhelm
    I part ways with "libertarianism" when it transitions from ideology grounded in logic into self-defeating autism for the sake of ideological purity.

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