I saw it was happening, haven't had a chance to look into it at all. Its... something.
Its systemic, though.
I saw it was happening, haven't had a chance to look into it at all. Its... something.
Its systemic, though.
In reply to Mr_Asa :
Same dude that dumped 3.5M in stock a couple weeks ago.
In reply to Opti :
Not surprised.
Surprised this isn't being talked of more....
https://www.frbsf.org/our-district/leadership/azher-abbasi/
How did HE wind up in the position he's in... that's what I want to know. F'n bachelor of science degree in computer information systems from the University of Phoenix.
you can't make this E36 M3 up, folks.
If you're wondering how that relates... SF Fed is the primary federal regulator for SVB, as well as Silvergate, amongst others.
Opti said:In reply to Mr_Asa :
Same dude that dumped 3.5M in stock a couple weeks ago.
Yep. Something here doesn't smell right.
.....aaand they paid bonuses to some of their employees right before the bank was seized. Something smells funny here.
https://www.axios.com/2023/03/11/silicon-valley-bank-paid-bonuses-fdic
"Low mileage, fully optioned and well maintained Luxury vehicle for sale. Has a rod knock"
Going to guess someone buys this parts-car of a bank by end of today. To the right buyer this might be a gold mine. Wont be announced, but I assume the taxpayer will have to de-risk the sale with some of their own cash. "Too big to fail" and "Too big to indict" are pretty much baked into the cultural tapestry.
My understanding is that SVB was using a different risk profile than most banks would. Perhaps having no Cheif Risk Officer for several months wasn't the best approach?
In reply to Mr_Asa :
I believe that guy shouldn't be allowed to run the cash register at a fast food restaurant after this.
Snowdoggie (Forum Supporter) said:.....aaand they paid bonuses to some of their employees right before the bank was seized. Something smells funny here.
https://www.axios.com/2023/03/11/silicon-valley-bank-paid-bonuses-fdic
By paid bonuses, I'd bet they went into the employees accounts, which are now useless, kind of funny.
NOHOME said:"Low mileage, fully optioned and well maintained Luxury vehicle for sale. Has a rod knock"
Going to guess someone buys this parts-car of a bank by end of today. To the right buyer this might be a gold mine. Wont be announced, but I assume the taxpayer will have to de-risk the sale with some of their own cash. "Too big to fail" and "Too big to indict" are pretty much baked into the cultural tapestry.
Consequences are for Little people.
AAZCD-Jon (Forum Supporter) said:NOHOME said:"Low mileage, fully optioned and well maintained Luxury vehicle for sale. Has a rod knock"
Going to guess someone buys this parts-car of a bank by end of today. To the right buyer this might be a gold mine. Wont be announced, but I assume the taxpayer will have to de-risk the sale with some of their own cash. "Too big to fail" and "Too big to indict" are pretty much baked into the cultural tapestry.
Consequences are for Little people.
AIUI, in a sale like this the shareholders get nothing. SVB has failed, the owners in it lose their investment, and the govt-arranged sale is about freeing up the depositors' money as soon as possible. From what I've read SVB has lots of assets and those depositors will probably get 90-95 cents on the dollars or more, but it will take months. That's too long for a lot of those depositors, all their money is tied up in SVB and by the end of next week they'll have trouble making payroll.
So if a sale like this happens then it isn't about "too big to fail", it's about bailing out the little people -- the small businesses and employees thereof who will otherwise be bankrupt and out of a job.
As for prosecution -- indicting someone for investing in US T-bills doesn't really sound like something the government is likely to want to do. :)
They followed the conventional safe asset approach straight off the cliff.
"Bonds are safe haven" has been the conventional wisdom since the early 1980s. That is only true in a stable or falling interest rate world. We are no longer in that environment.
These guys should have been smarter than this.
If I am remembering what I read correctly, their chief risk officer resigned in April 2022 and they didn't hire a new one until Jan2023. Following this one closely.
I don't expect it to be the end of the line, but who knows where it will end. The banking industry has been extremely leveraged for the last several years, so almost any disruption has the potential to destroy massive swaths of money.
Opti said:In reply to Mr_Asa :
Same dude that dumped 3.5M in stock a couple weeks ago.
If he is an executive at a publicly held company, he legally, has no control of that, for obvious reasons. I believe they (the independant financial managers) also have to declare those sales well ahead of time.
This whole thing smacks as another situation of a bank taking on a lot of high risk products to maximize profits (and obviously maximize risk). I believe WaPo did the same thing.
In reply to AAZCD-Jon (Forum Supporter) :
Should write that line into the national anthem! Or at least formalize it by scribbling it into the Constitution.
Apparently there will be no bailout for the bank.
For some reason I have doubts.
Likely outcome is that FDIC's standard operating procedure works as it has so many time in the past and they have a buyer before end of day today (auction started yesterday), with depositors getting either par or *very* close to it. That is not a bailout, that's the system working as intended. What people are complaining about (mostly the hypocritical libertarian tech-bro VCs) is that this leaves shareholders largely high and dry, because, well, the shareholders own and essentially "run" the company by approving the leadership. If *they* are made whole (which Yellen says will not happen), *that* would be a bailout.
SVBs assets are intact and of high quality, they just are illiquid due to their long duration and return rates that are far below what can be gotten currently.
In reply to CLH :
Agree with all of that, hopefully that is how it shakes out. And if they do let the shareholders fail, that could be a healthly warning shot to the rest of the finance industry that this time it's different and they should check their books.
triumph7 said:In reply to 1988RedT2 :
I watched Kramer for a while and then watched his recommended stock picks consistently underperform if not crash.
I watched him for a time, simply because he was funny to watch. It got old. And his record speaks for itself.
Here is the reality of the current state of the economy.
1) There are ZERO banks that can survive a run on the bank in the US. Not one is safe. It's all relative. If everyone goes and asks for their cash the economy would be decimated and never recover. It would have to be rebuilt from scratch. There have been infinite things done that got it to this point. The problem is that the FED is always reacting, guessing and just trying to prevent the next crisis.
2) You all still fail to understand the implication of all of the debts in the world, inflation, and the future. The only comment I've ever made that a small fraction of you understand is that the entire economy is debt based. That debt is dependent on future payments too often from people that can't vote and aren't even born yet.
3) Cozy fact for you about the current US debt of $30+ trillion. No one seems to understand the sheer magnitude of this debt. If you confiscate every piece of currency on the planet, dollars, yen, euros, yuan, renmibi, rubles, dinar... all of it, you cannot repay the US national debt. If confisicate every ounce of gold on the planet and every ounce of silver, put them in a pile, you can't pay it.
The economy depends on the very people participating in it to be ignorant of basic fact and simple mathematics. If everyone knew how this all worked, #1 would happen. The banking system cannot survive #1 and that's why people high up are freaking out.
I'm not freaking out even a little. I'm going to go have another cocktail. I know #1 will happen, I just can't tell you when. It might be tomorrow. It might be 1000 years from now, but it will happen. We've all seen individuals do it. We've all seen Argentina, Zimbabwe and Venezuela do it. Remember when it happens (and it will) you will need water, food and shelter; that's it.
The system is only designed to benefit a small group and none of us are in it. Have a nice day and enjoy the show.
Oh and for the record, this is exactly why I am against large central bank digital currencies, but those are coming too. I won't be surprised if this isn't used to further that goal too.
In reply to AnthonyGS (Forum Supporter) :
Why would you compare the US national debt to a metal who's only usefulness is it conducts electricity and doesn't tarnish? Might as well compare it to the value of all the diamonds in the world.
In reply to CLH :
Since "investing" and "gambling" are essentially the same thing, this is how it should work out. Depositors should be made whole or at least as much as liquidated assets allow. Investors spun the wheel with the knowledge that a total loss was acceptable, so it is what it is.
NOHOME said:In reply to CLH :
Since "investing" and "gambling" are essentially the same thing, this is how it should work out.
Investing is about being rewarded for providing VC and taking risk...it's a healthy component in an economic system that benefits all of society.
Gambling is a pure greed play that doesn't even make a pretense of serving a purpose.
I don't know if you intended it but your comment about "how it should work out" reads like you have some animosity towards investors. If that's the case, I'm sorry you feel that way...we provide the VC that creates jobs and drives upward wage pressure...we provide the VC that drives innovation and keeps the U.S. competitive...our profits are shared through taxes so others are benefiting even though they've done absolutely nothing to earn it.
Anyway, the weeks to come will be interesting as we see if SVB is an outlier or an omen.
AnthonyGS (Forum Supporter) said:2) You all still fail to understand the implication of all of the debts in the world, inflation, and the future. The only comment I've ever made that a small fraction of you understand is that the entire economy is debt based. That debt is dependent on future payments too often from people that can't vote and aren't even born yet.
You aren't very persuasive when you start by insulting the person you're trying to persuade.
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