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Message
re: Main Street is bailing out risky banks again; this time it's Menlo Park instead of Wall St
Posted on 3/13/23 at 9:05 am to chinhoyang
Posted on 3/13/23 at 9:05 am to chinhoyang
quote:
I seem to recall some pundit (years ago) warning about these giant banks and the problems that will occur when one fails.
One of the major issues of this potential crisis is making the giant banks the only banks.
I don't think that solution is what you are hoping for.
This post was edited on 3/13/23 at 9:06 am
2
Posted on 3/13/23 at 9:07 am to geauxtigers87
quote:
this is fricking bullshite. everyone should be up in arms over this but instead most people are content with getting crumbs from our corrupt government table
Yeah. And we have people obtuse enough to argue that these fees won't be passed onto customers. Most banks don't have 90% of depositors beyond FDIC limits like SVB did.
I understand the pragmatism on trying to draw a circle around SVB and trying to isolate it to prevent runs on other banks. But at some point we can't ignore moral and ethical concerns of having to bail out a bunch of wealthy institutions for making unnecessarily risky decisions.
This post was edited on 3/13/23 at 9:09 am
Posted on 3/13/23 at 9:09 am to member12
quote:
Most banks don't have 90% of depositors beyond FDIC limits like SVB did.
This becomes somewhat irrelevant when more banks fail.
How many banks can fail before FDIC runs out of money?
Posted on 3/13/23 at 9:10 am to member12
quote:
But at some point we can't ignore moral and ethical concerns of having to bail out a bunch of wealthy institutions
The institution is dead. Stock is worthless. Executives are professionally and financially destroyed.
The UK arm of SVB was just bought for like 1 pound
Posted on 3/13/23 at 9:10 am to BigPerm30
quote:
It’s social media stupidity. If the banking system in America collapses the whole world is fricked.
Yeah, I just hope people don’t freak because of what they read in social media and run on the banks. SVB and Signature have a lot of high risk investments and are heavily tied to crypto and whatnot. I mean, SVB marketed itself as a bank for startups. This is something to watch carefully, but people shouldn’t be freaking out that the big guys or the old banks are going to collapse.
Posted on 3/13/23 at 9:12 am to High C
Just found out that SVB was one of the start up investors to the new company I just went to. Manager says it’s fine.
What is this life.
What is this life.
Posted on 3/13/23 at 9:12 am to Roll Tide Ravens
quote:
SVB and Signature have a lot of high risk investments and are heavily tied to crypto and whatnot.
Signature? Yes.
SVB was hurt by the opposite of high risk investments, US treasuries.
Posted on 3/13/23 at 9:13 am to member12
quote:
But at some point we can't ignore moral and ethical concerns of having to bail out a bunch of wealthy institutions for making unnecessarily risky decisions.
The lesson learned is there's really little risk. That's not good for any system.
It does make you understand the cries of the Bolsheviks a little better. Its rigged for investors.
Posted on 3/13/23 at 9:13 am to SlowFlowPro
quote:
The alternative is potential collapse of civilization
Most people know the difference from the end of civilization and the "yelling fire in a theater" routine to panic people enough to accept a bail out for a bunch of rich assholes in Melo Park.
Too bad you aren't most people.
Posted on 3/13/23 at 9:14 am to frequent flyer
We are doing some risk assessment right now with accounts to make sure we are ok. It’s probably not needed based on who we bank with, but taking the opportunity to do it regardless.
Posted on 3/13/23 at 9:14 am to member12
quote:
"yelling fire in a theater" routine to panic people enough to accept a bail out for a bunch of rich assholes in Melo Park.
Yep, I've had enough of it. shite or get off the pot.
Posted on 3/13/23 at 9:21 am to SlowFlowPro
quote:
One of the major issues of this potential crisis is making the giant banks the only banks.
I hope not.
COVID should have (but I'm sure did not) taught us the importance of having local businesses. I still remember when there were local dairies and bakeries in any decent sized town. Now, we have longer supply lines and we should have learned how those supply chains have risks.
Posted on 3/13/23 at 9:23 am to chinhoyang
quote:
I still remember when there were local dairies and bakeries in any decent sized town. Now, we have longer supply lines and we should have learned how those supply chains have risks.
Anything "too big to fail" should be broken up. Nothing should be too big to fail.
Posted on 3/13/23 at 9:33 am to Roll Tide Ravens
quote:
If you just go to Google and type “Are banks” you see predicted results like: “Are banks collapsing?” or “Are other banks going to collapse?”.
This shite RIGHT HERE is how social media is driving public opinion. Google isn't predicting based off of previous searches. They are predicting off of algorithyms written by people sitting in CA (and elsewhere) in open collusion with our government. Just take a look at the Congressional hearings where they are openly stating they meet WEEKLY with the FBI and other government agencies.
This isn't tinfoil hat bullshite. It's real.
Posted on 3/13/23 at 9:42 am to goofball
quote:
And they are charging other FDIC insured banks special fees to cover the gap. Read the articles posted about this.
And that special assessment will get passed onto the customers of those banks.
This is what I find extremely frustrating.
I understand the pressure to nip this in the bud and reduce the chance of runs at other banks. But I also think that there's a lot of noise created by Silicon Valley VC's and startups now so they can scare the government and taxpayers into a bail out.
That's a risk I'd take right now. I'd tie a rope around FDIC insured accounts and cover them immediately. Then I'd have the FDIC liquidate all assets of SVB, using the proceeds to cover the uninsured depositors. They would need to expect that this process could take a few weeks and they may have to take a haircut if there is a shortfall.
If there's any gap, I wouldn't touch it. Some lessons need to be learned the hard way. That means some CFO's need to have a much deeper, closer relationship with banking partners that hold $500 million of their cash (like ROKU for instance).
Posted on 3/13/23 at 9:44 am to tigerbandpiccolo
quote:
Just found out that SVB was one of the start up investors to the new company I just went to. Manager says it’s fine.
So they were investing directly into startups, which have a high failure rate?
I've heard this, but it's sort of glossed over in the media. I know they had bad luck with long term bonds from 3-4 years ago now being sort of weak sauce on their books with the rate hikes. But direct investment into silicon valley start ups would be risky move for a bank like this IMO.
Posted on 3/13/23 at 9:50 am to RogerTheShrubber
quote:
Yep, I've had enough of it. shite or get off the pot.
If you run a tech company and keep millions of operating cash in a bank, you better be watching that bank. If you are big enough, maybe you should have a board seat.
A lot of banks will issue riskier loans on the condition that you move your deposits to them. A good CFO would be watching what that bank does very closely.
There were some bank failures in the 1980s in my area when the oil industry collapsed, but most of them weathered the storm well. It was not uncommon for oil companies to have board seats on the banks they used - some of them even owned a good part of the bank.
Posted on 3/13/23 at 9:53 am to Triggerr
quote:
We are doing some risk assessment right now with accounts to make sure we are ok. It’s probably not needed based on who we bank with, but taking the opportunity to do it regardless.
And the secret is that you and those banks are still making educated guesses. You can categorize based on estimated risk, but you are still guessing.
The problem with SVB is that they were likely working in a much riskier swimming pool than you are - and they were making guesses too. That enhanced risk goes for their depositors, their investments, and the entities that they were loaning money to. Most Silicon Valley startups fail. The ones that don't usually take years to flourish.
This post was edited on 3/13/23 at 9:54 am
Posted on 3/13/23 at 10:19 am to frequent flyer
The Big Short 2
Posted on 3/13/23 at 10:28 am to goofball
quote:
This is what I find extremely frustrating.
I understand the pressure to nip this in the bud and reduce the chance of runs at other banks. But I also think that there's a lot of noise created by Silicon Valley VC's and startups now so they can scare the government and taxpayers into a bail out.
100% this.
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