Silicon Valley Bank Run!!

[counterintelligence]

So we didn't pass the esg/woke finance bill that Joe Bite Me wanted, so now there's a Rollercoaster domino effect, bank run starting the very next day?

[Gold Mule]

So we didn't pass the esg/woke finance bill that Joe Bite Me wanted, so now there's a Rollercoaster domino effect, bank run starting the very next day?

There is a sort of run ... already started

[ELIAKIM]

So we didn't pass the esg/woke finance bill that Joe Bite Me wanted, so now there's a Rollercoaster domino effect, bank run starting the very next day?

In the meantime, Biden has done a deal with Rishi Sunak and Australia for nuclear submarines to be built in England. 

China accuses US, UK and Australia of 'going down a dangerous path' with historic nuclear sub deal as security minister Tom Tugendhat says Beijing IS a 'threat'

• China has hit back after AUKUS nuclear submarine deal was sealed in San Diego 
  https://www.dailymail.co.uk/news/article...-path.html

[Wingsprint]

Roger Babson

Roger Babson - Wikipedia

On September 5, 1929, he gave a speech in which he proclaimed, "Sooner or later a crash is coming, and it may be terrific."[5] Later that day, the stock market declined by about 3%.[6][7] This became known as the "Babson Break." The Wall Street Crash of 1929 and the Great Depression soon followed.

[counterintelligence]

https://www.ntd.com/shareholder-lawsuit-...07182.html

Shareholder lawsuit accuses SVB executives of fraud.

[counterintelligence]

https://www.ntd.com/banking-panic-unlike...07175.html

Banking panic unlikely as conditions surroundings SVB collapse different from 2008.

[ELIAKIM]

Spoiler

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”.

Spoiler

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.

This exactly.  

I actually talked to my financial advisor today.   And while I do not agree with his line of thinking sometimes, he has been with our family for 30 years, and always has steer us in the right direction.  He basically said what you are telling us,  furthermore he explain the silicone bank was heavily invested in digital or cripto currency, that it has no hard assets backing, hence the main reason they went into trouble.  He told me not to worry.

And I said, but I read this, and I read that!  But Chase and BOA!  He literally asked me if I was a conspiracy theorist.     I told him I proudly often wear a tin foil hat.

Has I understand it, SVB was cash rich that's why they invested 50% of liquid capital into bonds. Lenders from all over Europe and UK were pleased to give their funding investment to big tech via SVB.   EU lenders should be investing in EU companies. Same with the UK, they should be investing in homegrown companies. Otherwise Bill Gates etc has a stranglehold on the tech industry.

[counterintelligence]

Spoiler

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”.

Spoiler

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.

This exactly.  

I actually talked to my financial advisor today.   And while I do not agree with his line of thinking sometimes, he has been with our family for 30 years, and always has steer us in the right direction.  He basically said what you are telling us,  furthermore he explain the silicone bank was heavily invested in digital or cripto currency, that it has no hard assets backing, hence the main reason they went into trouble.  He told me not to worry.

And I said, but I read this, and I read that!  But Chase and BOA!  He literally asked me if I was a conspiracy theorist.     I told him I proudly often wear a tin foil hat.

Has I understand it, SVB was cash rich that's why they invested 50% of liquid capital into bonds. Lenders from all over Europe and UK were pleased to give their funding investment to big tech via SVB.   EU lenders should be investing in EU companies. Same with the UK, they should be investing in homegrown companies. Otherwise Bill Gates etc has a stranglehold on the tech industry.

Because of a crypto crash they want to use this as a reason to move us to digital currency?




The lunacy of government never ceases to amuse.

[counterintelligence]

https://www.ntd.com/federal-reserve-prom...07197.html

Federal Reserve promises review of SVB collapse.

https://m.youtube.com/watch?v=KIx5hX9ck-E

https://www.ntd.com/fed-caught-in-a-bind...07099.html

Feds caught in a bind trying to maintain publics trust.

[ELIAKIM]

REVEALED: Only ONE member of failed SVB's board had a career in investment banking - and the rest were Obama, Clinton mega-donors who 'grieved' when Trump won including one who went to Shinto shrine 'to pray'

• Tom King, 63, was the only member of the Silicon Valley Bank board who had experience in investment banking
  
  
• The others were major Obama and Clinton mega-donors, including who cried when Trump won in 2016
  
  
• The board is now being investigated for its failure to act ahead of the bank's collapse, as some argue it was[b] too focused on being woke [/b]
  https://www.dailymail.co.uk/news/article...nking.html