Silicon Valley Bank collapses after failing to raise capital

[AndyFoxy]

By gold and silver. Get cash out of the bank.

[placeholder]

Well, one good thing that will come out of this is that it will undermine support for any loosening of regulations to accommodate crypto.

[eisfeld]

30 minutes ago, AndyFoxy said:

By gold and silver. Get cash out of the bank.

I guess that's one way to force return to office if you pay your employees by handing them little gold nuggets every month. Now you just need to establish an international gold nugget courier system so companies can also pay other companies.

[nigelforbes]

I see that the BOE may step in to guarantee deposits of the UK arm. Failing that, tech start up activity in the country will be decimated, according to a petition received by the Chancellor, whose name rhymes with Hunt. 

 

 

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Silicon Valley Bank paid bonuses to employees hours before shutdown, government seizure

Employees of Silicon Valley Bank got their annual bonuses just hours before the California bank’s shutdown was announced Friday.

The shutdown came on the second Friday of March, historically when the company issued yearly bonuses.

Sources said the bonuses were for work done in 2022 and had already been in process before the collapse, NBC News reported.

https://www.nydailynews.com/news/national/ny-silicon-valley-bank-gives-bonuses-before-shutdown-20230312-mtaxes5chjgyvcagxefra3n6au-story.html

Edited March 12, 2023 by metisdead
After pasting a reply format the text you have pasted. An easy way to do this is to click the "Paste as plain text instead" option at the bottom of the reply box.

[AndyFoxy]

59 minutes ago, eisfeld said:

I guess that's one way to force return to office if you pay your employees by handing them little gold nuggets every month. Now you just need to establish an international gold nugget courier system so companies can also pay other companies.

When the financial systems collapses, I’ll be quite happy to have some gold and silver. Along with other hard assets

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4 minutes ago, AndyFoxy said:

When the financial systems collapses, I’ll be quite happy to have some gold and silver. Along with other hard assets

And when Jesus comes, I'll be glad that I have already acknowledged him as my personal savior. Those predictions of collapse of the financial system have been around since the United States effectively abandoned the gold standard in the 30's and utterly abandoned it in the 70's. What kind of shelf life should such predictions enjoy before they are judged to be bogus? Ever?

[nigelforbes]

5 minutes ago, placeholder said:

And when Jesus comes, I'll be glad that I have already acknowledged him as my personal savior. Those predictions of collapse of the financial system have been around since the United States effectively abandoned the gold standard in the 30's and utterly abandoned it in the 70's. What kind of shelf life should such predictions enjoy before they are judged to be bogus? Ever?

I wouldn't hold your breath, I think Jesus has had a peek and decided we're all a bunch of no-hopers so he's made alternate plans.

Edited March 12, 2023 by nigelforbes

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1 minute ago, nigelforbes said:

I wouldn't hold your breath, I think Jesus has had a peak and decided we're all a bunch of no-hopers so he's made alternate plans.

Well,  Jesus did have this to say about holding gold and similar commodities:

“Do not store up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal.

https://www.bible.com/bible/314/MAT.6.19-21.TLV

I'm taking that as a "NO".

[eisfeld]

14 minutes ago, AndyFoxy said:

When the financial systems collapses, I’ll be quite happy to have some gold and silver. Along with other hard assets

And I assume you stash them in your bunker? We are talking about companies running their day-to-day business and not grandma losing her savings.

[AndyFoxy]

45 minutes ago, eisfeld said:

And I assume you stash them in your bunker? We are talking about companies running their day-to-day business and not grandma losing her savings.

Hard assets. Buy them....if you have the money.

[eisfeld]

2 hours ago, AndyFoxy said:

Hard assets. Buy them....if you have the money.

Can you at least try to form arguments and engage in a discussion or will you just bluntly repeat the same thing?

[AndyFoxy]

6 hours ago, eisfeld said:

Can you at least try to form arguments and engage in a discussion or will you just bluntly repeat the same thing?

I’ll just bluntly repeat the same thing. Hard assets….buy them

[nigelforbes]

Equities took a beating Friday, I'm dreading todays open. ????

[nigelforbes]

"Financial regulators said Sunday night depositors of the failed Silicon Valley Bank will have access to all of their money starting Monday, March 13".

 

https://finance.yahoo.com/news/us-government-guarantees-all-silicon-valley-bank-deposits-money-available-monday-223546372.html

 

As predicted....let's hope that's enough for the markets.

[stevenl]

Apparently it was the second bank to collapse, we're up to 3 now.

https://www.news.com.au/finance/business/banking/us-signature-bank-shut-down-by-regulators-days-after-svb-collapses/news-story/a31b2ad2158151bf91acf811da1be7e6

[nigelforbes]

11 minutes ago, stevenl said:

Apparently it was the second bank to collapse, we're up to 3 now.

https://www.news.com.au/finance/business/banking/us-signature-bank-shut-down-by-regulators-days-after-svb-collapses/news-story/a31b2ad2158151bf91acf811da1be7e6

But depositors there get the same deal, all assets are protected.

[Scott]

US regulators say SVB customers will be made whole as second bank fails

 

In an extraordinary action to restore confidence in America’s banking system, the Biden administration on Sunday guaranteed that customers of the failed Silicon Valley Bank will have access to all their money starting Monday.

In a related action, the government shut down Signature Bank, an SVB rival that was teetering on the brink of collapse in recent days. Signature’s customers will receive a similar deal, ensuring that even uninsured deposits will be returned to them Monday.

https://edition.cnn.com/2023/03/12/investing/svb-customer-bailout/index.html

[nigelforbes]

S&P Futures up 1.45% on the news, phew!

[John Drake]

I don't have nearly enough knowledge about this event to know whether "backstop" equals "bailout." But I do have a question? Is it true that the people getting their deposits back that are over the $250,000 insurance threshold include Oprah, Mark Cuban, Harry and Meghan in addition to all those venture capitalists and tech firms? If so, why? Why are the rules being changed retroactively?  FWIW it sure looks like Mark Cuban did: https://www.thestreet.com/technology/mark-cuban-had-millions-at-failed-silicon-valley-bank

Edited March 13, 2023 by John Drake

[Misty]

15 minutes ago, John Drake said:

I don't have nearly enough knowledge about this event to know whether "backstop" equals "bailout." But I do have a question? Is it true that the people getting their deposits back that are over the $250,000 insurance threshold include Oprah, Mark Cuban, Harry and Meghan in addition to all those venture capitalists and tech firms? If so, why? Why are the rules being changed retroactively?  FWIW it sure looks like Mark Cuban did: https://www.thestreet.com/technology/mark-cuban-had-millions-at-failed-silicon-valley-bank

It sounds like SVB deposit holders were pretty much going to get their money back anyway, and the "systemic risk exemption" being applied in this case is really to calm things down and prevent the situation from snowballing. 

 

The only advantage to deposit holders is they will get their money back sooner rather than later.  I have no doubt some of the deposit holders could be people such as you mention, but some are also companies with employees whose paycheck money would have been caught up in the mess, as well as SVB branches in other countries.

 

SVB reportedly pretty much had enough assets to cover its liabilities.  Its problem was a duration mismatch due to poor bank management decisions, followed by a very rapid run on deposits.  In taking over the bank on Friday, the feds have wiped out shareholders and made an orderly work out possible. Deposit holders would have gotten their money back anyways (as there's apparently pretty much enough to cover them) so quelling the markets and preventing a systemic contagion situation is worth it. 

 

In the aftermath of this fiasco, hopefully bank stress tests will be expanded to include the likes of banks the size of SVB.  Also, hopefully the bank management will pay a real price for the mess that was created.

 

 

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8 hours ago, nigelforbes said:

"Financial regulators said Sunday night depositors of the failed Silicon Valley Bank will have access to all of their money starting Monday, March 13".

 

https://finance.yahoo.com/news/us-government-guarantees-all-silicon-valley-bank-deposits-money-available-monday-223546372.html

 

As predicted....let's hope that's enough for the markets.

I think this was the correct decision. This isn't like the banking collapse of 2008-2009 where bank asset value collapsed due to the mortgage crisis. Most likely there ultimately will be enough in assets left to repay the government. Just so long as stockholders in SVB aren't made whole. In the past, it wasn't just depositors in the major banks that were rescued, but the big banks themselves. This leads investors to believe that they are pretty much bulletproof and leads banks to make risky ventures. It's germane to note that while there was a  banking crisis in the US in 2009, there was no such crisis in Canada where regulations were much stricter.

[candide]

Bernie Sanders says Silicon Valley Bank's failure is the 'direct result' of a Trump-era bank regulation policy

"Signing the bill into law meant that Trump was exempting smaller banks from stringent regulations and loosening rules that big banks had to follow. The law raised the asset threshold for "systematically important financial institutions" from $50 billion to $250 billion.

This meant that the Silicon Valley Bank — which ended 2022 with $209 billion in assets — was no longer designated as a systematically important financial institution. 

https://news.yahoo.com/bernie-sanders-says-silicon-valley-045130094.html

Edited March 13, 2023 by metisdead
Edited as per fair use policy.

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9 hours ago, stevenl said:

Apparently it was the second bank to collapse, we're up to 3 now.

https://www.news.com.au/finance/business/banking/us-signature-bank-shut-down-by-regulators-days-after-svb-collapses/news-story/a31b2ad2158151bf91acf811da1be7e6

Another bank that would have been subject to FDA stress tests if the Republicans had left Dodd-Frank alone. It turns out Signature was heavily invested in cryptocurrency, Not a thing the FDA would have allowed were it subject to the rules imposed by Dodd-Frank. Maybe the minority of Democrats in the Senate who supported weakening Dodd -Frank might support a restrengthening of it. But the House looks like an unassailable obstacle.

[eisfeld]

2 hours ago, John Drake said:

Oprah, Mark Cuban, Harry and Meghan in addition to all those venture capitalists and tech firms

Are you suggesting that celebrities and other people that you don't like should be excluded? What makes their deposits different from aunt Rabarba from around the corner?

 

Edited March 13, 2023 by eisfeld

[eisfeld]

Joint Statement by the Department of the Treasury, Federal Reserve, and FDIC

 

https://home.treasury.gov/news/press-releases/jy1337

 

I believe this is the best outcome anyone could have hoped for. Bad bank goes away (management and shareholders wiped out), depositors who did nothing wrong get made whole and can access their funds after just 3 days and confidence is not tanking which could result in more bank runs.

 

Edited March 13, 2023 by eisfeld

[John Drake]

7 minutes ago, eisfeld said:

Are you suggesting that celebrities and other people that you don't like should be excluded? What makes their deposits different from aunt Rabarba from around the corner?

 

Their deposits are different because they are over the FDIC $250,000 insurance. 

Edited March 13, 2023 by John Drake

[John Drake]

7 minutes ago, eisfeld said:

Joint Statement by the Department of the Treasury, Federal Reserve, and FDIC

 

https://home.treasury.gov/news/press-releases/jy1337

Bailing out the rich and connected. And now every bank in the US is guaranteed to bailout depositors to infinity.

 

[eisfeld]

1 minute ago, John Drake said:

Their deposits are different because they are over the FDIC $250,000 insurance. And btw I see you altered my post in violation of forum rules, because I also included venture capitalists and tech firms in that list. Why?

I did not alter your post. I left venture capitalists and tech firms in the quote, so not sure what you are on about.

 

Let me ask again a bit more clearly: what makes the deposits of the people you listed different from aunt Barbara from around the corner who had $500k in SVB from the sale of her house because she needs the funds for health care and paying for her housing at a elderly care facility?

[John Drake]

Just now, eisfeld said:

I did not alter your post. I left venture capitalists and tech firms in the quote, so not sure what you are on about.

 

Let me ask again a bit more clearly: what makes the deposits of the people you listed different from aunt Barbara from around the corner who had $500k in SVB from the sale of her house because she needs the funds for health care and paying for her housing at a elderly care facility?

Nothing makes "Barbara" different. She is getting a bailout along with the others who shouldn't be, because FDIC plainly told every depositor when they opened their account that FDIC insurance only covered up to $250,000. Why change the rules after the fact? Because a lot of rich, connected people started complaining over the weekend and tried to start a panic.