So, the Fed raised the intrest rate again by a 1/4 of a point.

[Averageman]

Will this cause another series of "SVB like Banks" fail?

I'm betting so, unless they've already taken action, they are kinda screwed...

[tn1911]

It will most certainly put pressure on those banks that went balls deep into treasuries when the fed rate was near zero...

[markm]

I was reading the WSJ article on SVB's scramble to borrow from the banking cartels. They'd probably have been able to cover their butts on their own, but ran out of time. Apparently borrowing that kind of money takes a minute or two.

[yoni]

Every day I see something that is so stupid, that it must be by design.

Destroy the economy, you destroy middle class paving the way for a marxist revolution

[Averageman]

I was reading the WSJ article on SVB's scramble to borrow from the banking cartels. They'd probably have been able to cover their butts on their own, but ran out of time. Apparently borrowing that kind of money takes a minute or two.

That it take time to raise that money is of course going to take time. At this point I would think everyone running a Bank should know exactly where they stood, especially the day after SVB's demise.
I would imagine due to the current enviroment, if you over did it with the bonds, you had better make that known and put on some knee pads and get secured.

[Crow Hunter]

Since the FDIC/FED have said they will back all deposits, it "probably" won't be a problem. Based on my understanding of what happened.

What hit SVB wasn't that they had treasuries with low interest rates (we all have them if you invest in bond market funds), it was that they didn't have them marked to market (actual value) AND once some of their big customers found out that they didn't actually have them valued correctly, panicked, and started pulling all their money out. A lower coupon bond still has value, just not as much as its face value. When everyone started pulling out their money, SVB had to sell those assets to cover and since they weren't valued correctly they didn't have enough money to cover all their deposits and "poof".

Since the "run on the bank" scenario is being back stopped by the government (yay, another banking moral hazard), the likelihood of a run is reduced and hopefully other banks have their assets appropriately valued and have been buying assets to cover their deposits appropriately.

But then again, who knows with the tangled web of crony capitalism.

[markm]

Every day I see something that is so stupid, that it must be by design.

Destroy the economy, you destroy middle class paving the way for a marxist revolution

I don't disagree with this. Between the monumentally retarded waste by the US Legislature and Biden, and the fukkaloids in CA wanting to pay reparations to people who've never been wronged??? You can't tell me that these people are REALLY this fukking incompetent.

However, in SVB's case, I think I believe what one manager wrote.... They were running the bank like a hedge fund, and not like a bank... Greedily putting all their eggs in one basket.

[HKGuns]

Heels up Harris had her money in SVB. I’m sure that didn’t have anything to do with the bail out.

You also won’t see that on the propaganda networks.

Large withdrawals, from wealthy folks who heard they were in trouble made them illiquid, not insolvent. It was the deliberate inaction by the idiots in charge that led to the situation and cascade effect.

[tn1911]

Every day I see something that is so stupid, that it must be by design.

Destroy the economy, you destroy middle class paving the way for a marxist revolution


Naaah... we’re actually getting dumber.

Are we growing more dumber? Americans’ IQ scores drop in four of five measurements

https://studyfinds.org/americans-iq-test-scores-drop/

[john armond]

[QUOTE=markm;3096761]I don't disagree with this. Between the monumentally retarded waste by the US Legislature and Biden, and the fukkaloids in CA wanting to pay reparations to people who've never been wronged??? You can't tell me that these people are REALLY this fukking incompetent.[quote]


It’s not only CA.

Philly is going to pay $1K per month to anyone in select communities that get pregnant. This is on top of all the other .gov assistance they get. All being done to help cure infant mortality.

I guess if you get pregnant on purpose, collect $8-9K then have an abortion at the last minute it can be counted as a pregnancy that didn’t lead to an infant mortality. Rinse and repeat for another $8-9K. “Look at all the pregnancies happening and dead baby numbers have gone down, we solved the problem!!!”

https://nypost.com/2023/03/22/philadelphia-to-pay-pregnant-women-1k-per-month-solvable-crisis/

[Averageman]

At the very same time the Fed is trying to reduce inflation by raising the rate, Biden is continuing to continue to print money like a mad man and spending like crazy.
Now, this can go on only so long, if you think SVB was a lone Bank just being run wrong, and deserved to fail, well some of that may well be true, but the farther out on this limb Biden goes, the more Banks that will fail.
No joke, these three forces, The Fed, the Banks and .gov over spending keep conflicting. The Fed and The .gov overspending wont stop, so where does the pressure go? The Banks.

[DG23]

At the very same time the Fed is trying to reduce inflation by raising the rate, Biden is continuing to continue to print money like a mad man and spending like crazy.
Now, this can go on only so long, if you think SVB was a lone Bank just being run wrong, and deserved to fail, well some of that may well be true, but the farther out on this limb Biden goes, the more Banks that will fail.
No joke, these three forces, The Fed, the Banks and .gov over spending keep conflicting. The Fed and The .gov overspending wont stop, so where does the pressure go? The Banks.

And at the same time we are pushing more and more countries AWAY from our financial institutions / payment systems and wanting to use the the US Dollar in their trade with other countries.

Really brainy on our part... :(

[Buncheong]

Every day I see something that is so stupid, that it must be by design.

Destroy the economy, you destroy middle class paving the way for a marxist revolution

This ^

[utahjeepr]

At the very same time the Fed is trying to reduce inflation by raising the rate, Biden is continuing to continue to print money like a mad man and spending like crazy.
Now, this can go on only so long, if you think SVB was a lone Bank just being run wrong, and deserved to fail, well some of that may well be true, but the farther out on this limb Biden goes, the more Banks that will fail.
No joke, these three forces, The Fed, the Banks and .gov over spending keep conflicting. The Fed and The .gov overspending wont stop, so where does the pressure go? The Banks.

I think most banks are gonna be just fine. It ain't like they were out buying 20 year treasuries at 1%. Losers will be the folks like SVB that ignored traditional risk management practices. They were in trouble for more than a year and had been warned by regulators. They and their big tech pals are still blaming "irresponsible depositors" for pulling their money out of the bank. "We weren't the problem, the customers are the problem." "Progressive" leaning bank management catering to big tech and lefty politics caused the problem.

I still predict that .gov will soon make it harder to move your own money. It's already hard to move big $$$ quickly and the powers that be would rather protect their friends than folks like you and me.

[FromMyColdDeadHand]

I think most banks are gonna be just fine. It ain't like they were out buying 20 year treasuries at 1%. Losers will be the folks like SVB that ignored traditional risk management practices. They were in trouble for more than a year and had been warned by regulators. They and their big tech pals are still blaming "irresponsible depositors" for pulling their money out of the bank. "We weren't the problem, the customers are the problem." "Progressive" leaning bank management catering to big tech and lefty politics caused the problem.

I still predict that .gov will soon make it harder to move your own money. It's already hard to move big $$$ quickly and the powers that be would rather protect their friends than folks like you and me.

Is it public record of who bought long 10,20,30 years US govt bonds? I thought that insurance companies paired the bond length to the time frame of the policy, so that to me would mean that some things like life insurance might have an issue.

But as you or someone else pointed out, this is only an issue if you have to liquidate the bond. A 30yr treasury that bottomed out between 2-3% a few years ago, it’s net present value 5 years in if rates go to 6%… 8%… that kind of delta from low to high is what we looked at in the early 80s- and they went to almost 16%..

When I took my finance class, it was closer to when people still used slide rulers than to today. (For the truly math challenged, I mean the 90s). I can use Excel to add, subtract, multiply AND divide…

[utahjeepr]

Is it public record of who bought long 10,20,30 years US govt bonds? I thought that insurance companies paired the bond length to the time frame of the policy, so that to me would mean that some things like life insurance might have an issue.

But as you or someone else pointed out, this is only an issue if you have to liquidate the bond. A 30yr treasury that bottomed out between 2-3% a few years ago, it’s net present value 5 years in if rates go to 6%… 8%… that kind of delta from low to high is what we looked at in the early 80s- and they went to almost 16%..

When I took my finance class, it was closer to when people still used slide rulers than to today. (For the truly math challenged, I mean the 90s). I can use Excel to add, subtract, multiply AND divide…

I'm not educated enough to understand who was buying those long terms at 2% or even less in 21. I certainly don't know why anyone would purchase a long bond at that rate. Makes no sense to me. I'd have held off or bought shorter term. Gotta be a reason, I just don't get it.

I mean sure 2% beats nothing but why lock in for 20-30 years at the lowest rates in history? Got me, but somebody bought em.