'The government has 48 hours': Billionaire investor Bill Ackman calls on Biden to bail out SVB by Monday MORNING or face catastrophic market meltdown and loss of tens of thousands of jobs

Daily Mail ^ | 3/12/2023 | James Gordon

[Alberta's Child]

That’s my point. They were selling those bonds under duress because they had to raise cash to pay out depositors who were racing to withdraw their money.

It’s like having a pile of ABC Corp. stock that you purchased for $100,000 but is now only worth $50,000.

You may have no problem holding onto it because you think ABC is a good company and the stock price will recover nicely over the next 18 months. But if you are forced to sell it now because you just got laid off from your job and you need the money to pay your bills, you have no choice but to take that 50% loss on your investment.

[srmanuel]

The people of East Palestine get NOTHING, the woke idiots who ran a huge bank into the ground and their depositors get made whole.

[marcusmaximus]

The “Oprah Deposit Preservation Act”.

[Sooth2222]

Silicon Valley Bank run by morons for idiots

But I'm guessing that they aren't the only bank that did what they did.

Monday should be "interesting".

[ridesthemiles]

There is something wrong when an uneducated person who NEVER PRODUCED anything substantial can have $560 Billion in one bank.

[july4thfreedomfoundation]

Screw Ackman.

He and his left-wing butt buddies can go pee up a crooked rope. No bailout!

Maybe if he supported MAGA candidates, the economy would be booming, inflation would be low, and SVB would not have collapsed.

When do the good people of East Palestine, Ohio get THEIR bailout?

[marcusmaximus]

How long until interest rates go back down and those bonds are in the black?

[DoodleBob]

This is for you, Bill.

[Alberta's Child]

It could be years. The bonds may never be “in the black” again — if you’re referring to the current value vs. the purchase price (face value).

[farmguy]

Sure. Go ahead and bail them out. They’re on your side and it’s only bits in a computer.

Other than total loss of confidence in the dollar what could go wrong? ...

[texas booster]

Good point.

I am waiting for CNN to interview the GM pensioners for their opinion.

[marcusmaximus]

So who should take the loss on the bonds? The taxpayers?

[mewzilla]

FWIW...

https://thehill.com/homenews/ap/ap-business/yellen-says-no-federal-bailout-for-silicon-valley-bank/

[Twotone]

Dear Mr. Billionaire, bail yourself out.

[Alberta's Child]

If depositors need money with implicit guarantees, they can have their excess monies in very short term investments, like four week T-bills.

You’re looking at this like the average SVB customer is a wealthy guy in the tech sector who has millions of dollars in a savings account.

That’s not how this works. The typical depositor is more likely a business that keeps several million dollars in its account to deposit its customer payments and pay its bills. A business can’t pay its employees in four-week T-bills.

[ncalburt]

Bill is a well known Lefty Short selling Psycho .
The man is trying to crash the banks to get his bail out and /or planned short selling positions .
Arrest the con man . People get arrested for screaming fire in a crowded theaters.

[marcusmaximus]

She didn’t rule out a bailout aka “deposit guarantees” for Oprah and other entities with more than $250k in their accounts.

[DoodleBob]

There is a saying in finance: your first loss is your best loss.

Essentially, SVB got its duration matching wrong. They build an asset structure that assumed the liabilities were sticky. To be sure, the finance dept likely ran a zillion stressed liquidity scenarios but, ultimately, their ALCO chose a tranquil horizon. They got that wrong bigly.

The BIG question I haven't seen answered online, is why didn't they tap the Discount Window? Maybe the remaining assets SVB would have to post as collateral wasn't high quality. Still...why the crickets?

[Alberta's Child]

1. Nobody should take a loss on them. The bank should hold them until maturity.

2. The taxpayers were taking the “loss” on bonds like this for years. The bonds pay artificially low interest rates because the Federal Reserve was buying hundreds of billions of dollars worth of them during QE, QE2, QE3, etc.

[ExSES]

This is the downside of fractional lending

For a "Short Course" explanation of fractional banking reality, just watch Jimmy Stewart in "It's a Wonderful Life". He explains the system to his depositors succinctly in an effort to stop a panic!

For a deeper dive, look up the joys of the Dodd-Frank Bill which authorizes banks to pay their depositors in "Shares" instead of cash (a "Bail-In"). A more dark version appears in the Book/Movie "Catch 22" where Milo substitutes shares of his enterprise for parachutes in the bombers!