Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Wondering ya'll's thoughts on the Silicon Valley Bank failure. This is a fairly big bank. Not huge, but not insignificant.
I'm reminded of the failure of Bear Stearns in 2007. We didn't know then that Bear Stearns was in trouble because of the toxicity of much of Wall Street, only becoming clear in Fall 2008.
I'm wondering if something is up with tech company finances?.....
Bear had a balance sheet full of assets that were worth zero or close to it but for accounting purposes were worth near full book value. SVB sold $21 billion of treasuries and took a $1.8 billion loss. In other words, they had assets that were worth 92 cents per dollar of book value. Yet it set off a bank run despite FDIC insurance that Bear didn't have.
In any event, if you had a loan with SVB the loan is still valid and you'll owe the money to another institution soon enough. In other words still worth close to book value loan that can be sold. Another bank with the right terms might be willing to pay a slight premium for these loans in order to try to build a business relationship with you. Those MBS and other derivatives that Bear was loaded down with had near zero value on the market.
Very interesting point. Very well could be. Bear Sterns if I remember right collapsed in March 2008 exactly 15 years ago this month.
Economy was bad and on down turn, but things did not unravel until Lehman collapse following Fall 2008.
Could the next domino drop Fall 2023. Is it a coincidence it happens exact same month 15 years later. History rhymes and often repeats.
I have thought for a while not much was learned from 2008. Same crappy lending inflated home prices, people taking out HELOCs and using homes as piggy banks instead of as a place to live just lets make a shortage instead. Keep ZIRP for so long and kick can down the road. Now with the FED having raised interest rates to fight inflation for 1 year running, the cracks may be starting to form????
Very interesting point. Very well could be. Bear Sterns if I remember right collapsed in March 2008 exactly 15 years ago this month.
Economy was bad and on down turn, but things did not unravel until Lehman collapse following Fall 2008.
Could the next domino drop Fall 2023. Is it a coincidence it happens exact same month 15 years later. History rhymes and often repeats.
I have thought for a while not much was learned from 2008. Same crappy lending inflated home prices, people taking out HELOCs and using homes as piggy banks instead of as a place to live just lets make a shortage instead. Keep ZIRP for so long and kick can down the road. Now with the FED having raised interest rates to fight inflation for 1 year running, the cracks may be starting to form????
A recession may be happening then but no requirement we go down the financial panic path that so many are seemingly certain will happen. Our economic cycle hasn't had a good ole fashioned recession where things get washed out and a bit of a reset occurs. It feels like everything is just a matter of what the Fed wants and that can be concerning but I'm not convinced a massive seizing up of the system is necessary to get what needs to be flushed out done. Homes and banks are unlikely to be the center of it, something else is going to break and then homes and banks will be impacted by it.
Every time the government gives bailouts with taxpayer money it reinforces banks and businesses behaving foolishly and unethically with no consequences and brings massive economic collapse due to unsustainable monetary policies one step closer. You can't do this indefinitely - the bleeding needs to stop NOW. The current headlines are designed to make average citizens nervous enough to agree to bail out a bunch of dishonest wealthy imbeciles.
With Ackerman getting involved talking about bank issues I am sure he is heavily shorting banks to make money. Didnt he do something similar with covid going on cnbc and screaming the end is near while profiting heavily from it?
I was not aware that Banks do not have to Mark to Market their securities designated "held to maturity". I am trying to find the calculation that if the major banks did have to mark these assets to market if they would then have a book value greater than zero.
it’s the massive rate increases by the fed that stressed all these tech companies funding .
borrowed money is the blood of these businesses
And these million dollar idiots who run these places didn't hedge their interest rate risk.
There's only one reason they are getting bailed out, and that's to prevent panic.
it’s the massive rate increases by the fed that stressed all these tech companies funding .
borrowed money is the blood of these businesses
Well, that after failing to increase interest rates at a reasonable pace when they should have...
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
