Posted on 03/12/2023 10:40:08 AM PDT by marcusmaximus
We all feel for her tearful situation.😭
Her estimated new worth two years ago was 2.5 Billion Dollars.
If she loses a portion she will be back to picking up returnable bottles and cans for deposit money. And selling used wheel covers at her old stand.
To AOC: Nope.
And the Electoral College charges too much tuition.
See my post above but that was kind of my point and/or question.
Is this about the “stock value” or the actual value of assets?
Did they sell deposits at a loss to try and shore up stock value? If so, that is not my problem or yours and people should have paid more attention. I am having a hard time figuring out how this bank was the first to pop given that they had so much cash flow in and out in comparison to smaller banks. It sounds like the people running it were woke morons.
While I am not usually a fan of “new laws or regulations” I would not mind seeing a law or regulation that EVERY SINGLE EXECUTIVE in a financial institution that goes broke requiring government intervention should have to return every single penny of any bonus that they accrued to depositors.
Perhaps that would create a reverse incentive for sound behavior versus poor decisions and bad promises so that you can get big bonuses.
This happened on a much bigger scale in the 2008 housing bubble crash with Freddie and Fannie where the Clintonistas running the scams walked away with over 100 million in bonuses based on lying about the health of their mortgage portfolio and not only were they not prosecuted - they kept the bonus money even as taxpayers foot the bill for that insanity (for the “too big to fail people”)
I got out of that bank..when I started hearing rumors.
That lying prick John McCain...was knee deep in shit then..but of course got out of it.
“That lying prick John McCain...was knee deep in shit then..but of course got out of it.”
I’m thinking that we may know why now - there was NO BETTER Neocon in Congress - they needed him to stay there, at least until Linda was up to the task.
Thanks for 31 - I should have read that because I had the same question
Lookner coming up
Now on Rumble video
Silicon Valley Bank Collapse: Government Action Today? - LIVE Breaking News Coverage
https://rumble.com/v2ctw5w-silicon-valley-bank-collapse-government-action-today-live-breaking-news-cov.html
“””I’m no expert on these matters, but it seems to me that the easiest course of action from the Federal government would be to have the U.S. Treasury buy all of SVB’s bond holdings out on a dollar-for-dollar basis.”””
Are you saying that the FED should buy the SVB bond holdings at par???? Even though those bonds are now only worth 60% or less of their par value?????
Please explain.
The problem with SVB is not that they dealt with their clients fraudulently, but that their risk management was awful.
But Congress and the free spending Biden administration are ULTIMATELY the culprit here.
It’s all an extension of Fed policy to curb inflation, reversing a 13-year zero-rate policy. And why did inflation occur? Isn’t it because of the massive increase in government spending, which resulted in huge printing of money ?
This of course pushed up rates in the middle and right side of the yield curve, devaluing existing bond holdings locked into older rate patterns. Investors noticed and then depositors too. The high-flying institution that specialized in providing liquidity in industries that have lost their luster suddenly found itself very vulnerable.
In addition, the SVB and probably other banks were exposed with a portfolio of collateralized mortgage obligations and mortgage-backed securities. But with rates rising, those are coming under stress too as high leverage in housing and real estate become untenable amidst falling valuations. Borrowers are finding themselves under water and that in turn adds to stress on lenders.
And where did SVB, and the entire banking industry, get the funds to bulk up their portfolios with such debt holdings? You guessed it: STIMULUS PAYMENTS!’
Hundreds of Billions flooded in and it had to be parked somewhere making some return. At the time it seemed like a good deal, until Fed policy changed.
Immense government spending which produced debt that was quickly monetized and eventually caused inflation, prompting the Fed to reverse course with the largest/fastest rate increases in history. And guess what? IT’s STILL GOING ON!
This destabilized (or restabilized) production structures away from the right side of the yield curve toward the left, shifting capital in search of return to the consumer-goods sector. Labor has begun to follow, thus creating a surplus of resources in information tech and a shortage in retails.
It was always naïve to think that this shift would take place without touching the banking institutions that shoveled leverage in the direction of industries that thrived during lockdowns but are cutting back massively.
$42 billion in deposits were drained on Thursday during the bank run
Yes.
That's exactly what the FED was doing for more than a decade before that -- artificially keeping U.S. Treasury rates low by buying them at rates no investor would ever accept.
I agree to you to a point, but will never sacrifice the status of America as a culturally western country to $$$$$ or meritocracy. We used to ban Asian immigration to the country for a few reasons.
Watch Asian dramas. You’ll see that tiger moms are not the exception but the rule. Children are trained from babyhood to do nothing but study until they finish high school, if not going further, or college. Minimum social activities. No dating. Almost no life except passing exams. A child that can support itself well, can also support its parents’ old age.
It’s not that the culture is genetically smarter, it’s just that the lack of social security has created social requirements to push each individual toward as much success as possible.
America is a melting pot and it includes Europeans, Asian and African individuals, etc. And it maintains each culture until the next generation is assimilated. A few generations here and the tiger moms will likely gradually assimilate, too.
The problem is that the 1960’s radically changed our culture and we still haven’t solved the problem my generation caused. If you’re nostalgic for the old morals and societal standards then, again, watch Asian dramas. They espouse the moral standards that we’ve left behind. Unfortunately, you can see Hollywood nibbling at the edges but the old men that run China are still using authoritarian rules to try to hold onto the old moral standards for a while longer.
We don’t need to worry about cultures overwhelming American culture. We just need to worry about the current educational system teaching defeat to our next generation. Trump wants to eliminate the Education Dept. More power to him! He has his finger EXACTLY on the problem and needs our support to eliminate the radicals of my generation.
Brilliant putting together of two current topics.
Yes, that removed all the bank’s cash, but an equal amount of assets and liabilities. It didn’t make SVB insolvent if the remaining assets are worth at least as much as the remaining liabilities. It’s basic accounting.
Western culture is European culture and belongs to the European descendants in the western hemisphere. Melting pot mongrelization doesn’t change that.
(FYI - wife is tri-racial - I meant mongrelization as a descriptive, not an insult).
Sending a virtual hug to your wife.
I would agree that this country started out with a European culture, but I wouldn’t necessarily agree that it stayed that way. I’m reminded of the ancient Romans absorbing new cultures as they came across them. Where it isn’t as acceptable in Asian cultures to intermarry, it is here. Europe, on the other hand, has ceased being traditional Europe. I don’t have an image of the culture of those countries anymore.
I was raised to believe that the strength of America came from being Heinz 57 varieties of people. I still believe that. I’ve done massive research into 16, 17, and 18th century America and NO WAY would I want to live in that environment. NOT FOR ANYTHING. Apologies to my ancestors.
https://www.netinterest.co/p/the-demise-of-silicon-valley-bank
You’re pretty close.
The problem is a lot of their bond holdings paid 1.99%.
But you can buy Treasuries right now for 4% or whatever.
So why pay full price for 1.99% a year when you can fork over the same amount and get 4% right now?
Only way to get someone to buy the 1.99% bond you’re trying to sell, is to *lower the price*.
They got an inkling of this and tried to sell SOME of their bonds, and do a stock offering to raise cash.
But then other people saw that, and figured out why. And started demanding their money now, now now.
Which created the very thing the bank was trying to avoid.
And most of those with over $250k in the bank, are small businesses, who need a lot of money, liquid, right now, to pay their employees. It’s not just people like (say) Scrooge McDuck who want to refill their swimming pool with solid gold coins.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.