Silicon Valley Bank Run!!

[NowhereMan]

Mar 13 , 2023

Accountant: 5 Reasons To Be Seriously Concerned
Silicon Valley Bank Run

$42 Billion in Withdrawals from a bank with only $209 billion in assets is the textbook case of a bank run.
The FDIC has stepped in to guarantee those deposits but their money is seriously limited.

https://www.youtube.com/embed/DNdyaWA1drc

[NowhereMan]

Mar 13, 2023

Silicon Valley Bailout

Anyhow, let’s go over the issues at Silicon Valley Bank,
try and understand how banks work, look at the news from last night,
and try to imagine how things might work out going forward.

https://www.youtube.com/embed/GdfYnqyu7v8

[NowhereMan]

Mar 13, 2023

USA BANK RUN PANIC as Third Bank COLLAPSES in 5 Days.

Signature Bank Closed by FDIC after BANK RUN

https://www.youtube.com/embed/_bUcyfvysWo

[NowhereMan]

Mar 13, 2023

The Fed just did a MASSIVE Bailout........

https://www.youtube.com/embed/U_vOBM_Jm5g

The only ones who suffer from inflation are us ordinary people, thats the exact goal!

Banks going under: “we need help!”
Fed: “money printer go brrrrr!!”

Average Americans: “a loaf of bread is $25, homelessness is everywhere and people are living on credit. We need help!”

Fed: “no hablo inglés”............

[NowhereMan]

Bank Stock watch, how low can they go?



















Buyer beware....

==========================


13th March, 2023 23:57 IST

Complete Meltdown In US Markets: Trading In Over 30 Banks Halted After Shares Slump

The collapse of the Silicon Valley Bank after a failed capital raise has triggered concerns among investors about risks to other banks from sharp rate hikes.

https://www.republicworld.com/business-n...eshow.html

 

[Sami aka Roxi]

Mar 13, 2023

The Fed just did a MASSIVE Bailout........

https://www.youtube.com/embed/U_vOBM_Jm5g

The only ones who suffer from inflation are us ordinary people, thats the exact goal!

Banks going under: “we need help!”
Fed: “money printer go brrrrr!!”

Average Americans: “a loaf of bread is $25, homelessness is everywhere and people are living on credit. We need help!”

Fed: “no hablo inglés”............

[ELIAKIM]

Our bank is a community bank, it was started by the community in which the bank began. They're very choosy about who they allow to have a bank account. 

[Saul Goode]

With the failures of Silicon Valley Bank (SVB) and Signature Bank we’ve seen the second and third largest bank failures of all time happen within a week. There seem to be two logical questions to be asked. How did this happen? Should we be concerned?
To address the first question, we need to go back to recent history and the low interest rates that were used to stimulate economic activity throughout the pandemic. The low rates had far reaching impacts, with one of the most important being the creation of a boom cycle for tech companies. These tech companies made up a huge portion of the depositors at SVB, which created excessive concentration risk for the bank. Banks like JP Morgan and Bank of America have about 30% of their deposits from retail clients like you and I. SVB on the other hand had only 2.7% of their deposits from stickier retail depositors like us. This created the environment for a failure, but the catalyst of the failure was disastrous risk management on the part of the bank. Banks are required to hold a certain portion of their assets in highly liquid investments, like US treasury bonds. Typically, when banks make these investments, they hedge the risk of interest rates rising. The term “hedge” simply means that they protect themselves from taking losses in the event that rates increase and hurt the value of their bond portfolios. SVB did not do this. On top of the lack of hedging, SVB held a relatively large portion of their assets in securities like treasuries and mortgage backed bonds. In fact, 55.4% of their total assets were in these types of securities, compared to 22.2% on average for other institutions. This meant that just like many of us last year, SVB lost money on their investment portfolio as the Federal Reserve hiked rates to combat inflation. At the same time, their client base made up of tech companies began to withdraw cash because their access to other forms of funding diminished as rates went higher. Once the inflows from tech companies turned into outflows, SVB was in real trouble and eventually failed. Signature Bank had similar issues after a bet on cryptocurrency banking went south and depositors quickly withdrew funds in the aftermath of the SVB collapse.

The second question is really the most important- should we be concerned? The short answer is “no”. The biggest potential concern would be the risk of contagion from these banks failing, but as was highlighted in the previous paragraph, other large US banking institutions are not in the same situation as SVB. After the Great Financial Crisis in 2008, regulations have made banks’ balance sheets much stronger. The large US banks have a much more diverse funding base and prudent risk management procedures. With the joint measures from the Treasury Department, Federal Reserve and FDIC, depositors at SVB and Signature Bank will be made whole. This move protects many businesses that stood to lose significant amounts of money and more importantly gives confidence to depositors at other banks that they do not need to rush to withdraw funds.

[ELIAKIM]

With the failures of Silicon Valley Bank (SVB) and Signature Bank we’ve seen the second and third largest bank failures of all time happen within a week. There seem to be two logical questions to be asked. How did this happen? Should we be concerned?
To address the first question, we need to go back to recent history and the low interest rates that were used to stimulate economic activity throughout the pandemic. The low rates had far reaching impacts, with one of the most important being the creation of a boom cycle for tech companies. These tech companies made up a huge portion of the depositors at SVB, which created excessive concentration risk for the bank. Banks like JP Morgan and Bank of America have about 30% of their deposits from retail clients like you and I. SVB on the other hand had only 2.7% of their deposits from stickier retail depositors like us. This created the environment for a failure, but the catalyst of the failure was disastrous risk management on the part of the bank. Banks are required to hold a certain portion of their assets in highly liquid investments, like US treasury bonds. Typically, when banks make these investments, they hedge the risk of interest rates rising. The term “hedge” simply means that they protect themselves from taking losses in the event that rates increase and hurt the value of their bond portfolios. SVB did not do this. On top of the lack of hedging, SVB held a relatively large portion of their assets in securities like treasuries and mortgage backed bonds. In fact, 55.4% of their total assets were in these types of securities, compared to 22.2% on average for other institutions. This meant that just like many of us last year, SVB lost money on their investment portfolio as the Federal Reserve hiked rates to combat inflation. At the same time, their client base made up of tech companies began to withdraw cash because their access to other forms of funding diminished as rates went higher. Once the inflows from tech companies turned into outflows, SVB was in real trouble and eventually failed. Signature Bank had similar issues after a bet on cryptocurrency banking went south and depositors quickly withdrew funds in the aftermath of the SVB collapse.

The second question is really the most important- should we be concerned? The short answer is “no”. The biggest potential concern would be the risk of contagion from these banks failing, but as was highlighted in the previous paragraph, other large US banking institutions are not in the same situation as SVB. After the Great Financial Crisis in 2008, regulations have made banks’ balance sheets much stronger. The large US banks have a much more diverse funding base and prudent risk management procedures. With the joint measures from the Treasury Department, Federal Reserve and FDIC, depositors at SVB and Signature Bank will be made whole. This move protects many businesses that stood to lose significant amounts of money and more importantly gives confidence to depositors at other banks that they do not need to rush to withdraw funds.

I think it was also triggered by big tech companies seeing the writing on the wall, they started to announce large staff layoffs, 1,000s of staff in every big tech company. Also Elon has shown the investors how much waste there is in big tech due to woke ideologies. So portfolio managers were advising against investing in SVB.

[ELIAKIM]

News in the UK, HSBC holdings have bought the London branch of SVB for £1 = $1.20. 



That news was mentioned on the start of this video with Piers Morgan.