Any thoughts on the impact of the svb failure? Are other banks OK? Sky falling? [Edit:] Wells Fargo, Morgan Stanley also shaky? They say not.
JPM or GS will bail this out by Monday morning. All they need to do is hold the bonds to maturity, which is 2-3yrs.
Yep. The big fish rarely drown, they most likely have been short from months ago. It's definitely something to keep a eye on to see how it unfolds. The depositors from ROKU to Robin Hood may not fare so well when they have to disclose exposure. The share holders some of which held large positions may get wiped as well. Although a risky venture, this wasn't a nickel and dime bank that catered to only a few. It helped the DOW puke up 3 months of gains. End of the World, NO
I say they make the depositors whole in this one. If there is any sort of panic that your deposits are not safe in a bank, then we are going to get bank runs all over the place next week.
It won't end well that's for sure. Read quite a bit into it today. Found some interesting information that's surfacing. Guess who sat on the San Fran Federal Reserve,etc,etc. This is the all eyes open moment to see how it's handled. This absolutely isn't one of those " banks go under all the time" moments, this bad boy could crush the markets overnight if it isn't properly handled. The more I read the more interesting it gets. Another bank they own has already had a bank run. Dominoes anyone. The main thing was they had to halt trading Friday. The amount of puts that went instantly ITM overnight was astronomical, not mentioning the ones that cashed in Thursday. Sort of like what GME did to the market had it not been suspended.
Not the taxpayers responsibility to take on bailing out SVB, imo. Maybe I’m naive but this seems relatively limited in the amount of exposure it will create for other banks. For the ‘elite’ banks only to get bailed out also gives them a significant advantage to make riskier bets (and potential make outsized returns) if they know Uncle Sam will back up the freshly minted Benjamins if they miscalculate.
A lot is beginning to trickle out about this bank. Of course who knows how much is accurate and by the same token, how much more might be swept aside. I seen one article stating the bank had been without an official chief risk officer recently for eight months. That sounds like a stupid thing to do, or maybe someone less qualified was filling in....obviously. The current environment is not really conducive to doing dumb things financially. I tend to side a bit with Jwalker on the bailout I suppose. I do feel for some of the lower level folks who are going to miss out on their wages or are wondering when/if they can make it until they do. I know there was talk of bonuses being paid out a few days before, which they claim happens regularly in March....although it looks bad with what has occurred. I don't like it when the honest/innocent folks get the shaft...I'm sure there are some. From an investors point, we just have to wait and see. Whether we think it is a big deal or if we don't...it's out there dominating the headlines for the time being so it is a factor in the near term. I don't see it being old school financial crises type of thing. We have a lot going on right now though and the environment can sometimes feed on it's own fear of the unknown. I'll be glad when we get on down the road and past some of it.
Short term it's a very big deal. The pin drop heard around the World. Bank runs would cripple the banking system. Futures market is going to fun to watch. Cuban and the ones crying for the Government bailout will benefit the most. Let the market crash, it'll sort itself out. Warren probably faxed em a picture of his ass and has the buy team on standby.
SVB staff offered 45 days of work at 1.5 times pay (Reuters). NEW YORK, March 11 (Reuters) - Employees of Silicon Valley Bank were offered 45 days of employment at one and a half times their salary by the Federal Deposit Insurance Corp, the U.S. regulator that took control of the collapsed lender on Friday, according to an email to staff seen by Reuters. Workers will be enrolled and given information about benefits over the weekend by the FDIC, and healthcare details will be provided by the former parent company SVB Financial Group (SIVB.O), the FDIC wrote in an email entitled "Employee Retention" late on Friday. SVB had a workforce of 8,528 at the end of last year.
If they want to trim fat, the regulator could bring in Elon to run it for a week, or so/ It would end up with a far more comfortable payroll of about 1200 people.
The problem is that if you have over $250k in some small bank, you are now encouraged to go and pull your money out and deposit it at a large bank like JPM because they are less likely to have problems. Now if thousands of people are all going to their small regional bank on Monday morning to pull out all their money, thats a domino effect that will wreck hundreds of banks next week. People need to be assured that their $380,000 in savings is safe and is not at risk of going poof. If the Fed of some group of VCs and banks can assure the public of this by tomorrow, there will be a contagion effect.
Regulators close New York’s Signature Bank, citing systemic risk CNBC. U.S. regulators said Sunday that it shut down New York-based Signature Bank, a second financial institution they shuttered after Silicon Valley Bank’s collapse. “We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer,” Treasury, Federal Reserve, and FDIC said in a joined statement.
Another update.... Regulators unveil plan to assure depositors will get money after SVB collapse CNBC Banking regulators devised a plan Sunday to shore up deposits at Silicon Valley Bank, a critical step in stemming a feared panic over the collapsed tech-focused institution. In an anxiously awaited announcement from the Federal Reserve, the central bank said it is creating a new Bank Term Funding Program aimed at safeguarding institutions impacted by the SVB failure. In addition, regulators said depositors at both SVB and Signature Bank in New York, which also has been closed, will have full access to their deposits. A joint statement also said there would be no bailouts and no taxpayer costs associated with any of the new plans. “Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system,” said a joint statement from Fed Chair Jerome Powell, Treasury Secretary Janet Yellen and FDIC Chair Martin Gruenberg. The Fed facility will offer loans of up to one year to banks, saving associations, credit unions and other institutions. Those taking advantage of the facility will be asked to pledge high-quality collateral such as Treasurys, agency debt and mortgage-backed securities. “This action will bolster the capacity of the banking system to safeguard deposits and ensure the ongoing provision of money and credit to the economy,” the Fed said in a statement. “The Federal Reserve is prepared to address any liquidity pressures that may arise.” The Treasury Department is providing up to $25 billion from its Exchange Stabilization Fund as a backstop for the funding program. Along with the facility, the Fed said it will ease conditions at its discount window, which will use the same conditions as the BTFP.
Better put in the emergency call to Joe. Janet spooked a lot of people today. PIN and a couple more left the building, not interested.
Its not a bailout if the FDIC already took control. SVB was done last week, there is no SVB to bailout. The depositors got a bailout, and thats great news for all of us, not the CEO, COO and all the other c-suite and equity holders in SVB which is different from 2008.
