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2 banks collapsed

redskinsfan92

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I'm sure all of you have heard about Silicon Valley Bank. Just wanted to see what your thoughts were. I think we are already in a recession.
 

Plinco

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No surprise
 

Pierce Manhammer

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Oh I’m in the general area and you can hear the teeth gnashing and hands wringing. It’s satisfying.
 
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corrector

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That is interesting. Heard about it on social youtube channels before it became mainstream news up here. No surprize, I think most people feel something is on the horizon and the current economic system is not sustainable. You cant consume and dont produce and offshore jobs and use robots to replace people and think that will go well.
 

Pierce Manhammer

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This occurred because of the fed hikes, the banks owned a lot of notes that were worthless and they had to offload them at a discount. Then the run.
 

HaleyBaron

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Despite the news, no bank owner would ever let a bunch of women tank their bank unless they had planned it beforehand. It's a fixed job, and likely done on purpose. But alas, that's the Federal Reserve for you. We need to get rid of the centralized bank system fast.
 

Bokanovsky

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And now the government is waiving the $250k limit on deposit insurance. Thank goodness! We can't let these rich assh0les lose money. This is America!
I wouldn't say that anyone who has over $250K in the bank is automatically a "rich assh0le". To be considered a rich assh0le in modern day America, you need a net worth in the eight figures (unless you live in a place like Detroit, where you'd be considered a rich assh0le if you owned two pairs of sneakers).

Of course, the real reason why the 250K limit was waived was to avoid a bank run.
 

HaleyBaron

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I wouldn't say that anyone who has over $250K in the bank is automatically a "rich assh0le". To be considered a rich assh0le in modern day America, you need a net worth in the eight figures (unless you live in a place like Detroit, where you'd be considered a rich assh0le if you owned two pairs of sneakers).

Of course, the real reason why the 250K limit was waived was to avoid a bank run.
The fed was made to stop bank runs. I'm laughing hard right now at the inevitable.
 

Bible_Belt

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Of course, the real reason why the 250K limit was waived was to avoid a bank run.
97% of their accounts had over $250k. This was silicon valley funny money, startups of the ultra wealthy. You pays your bribes, you gets your bailouts. Rules are for poor people.
 

wifehunter

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Banks are great way to lose your money. : )

#Bitcoin
 
M

member160292

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SVB clientele have large deposits, given the territory. Money in there doesn’t sit for free. Their downfall was not investing those big deposits into gains that outpaced inflation
 

Murk

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It's designed.
 

Pierce Manhammer

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Nothing is going to happen the Fed already said they would bail out the depositors above the 250k limit
 

Kotaix

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At this point we're up to maybe 5 banks failing and trading halts.

This is what happens when you print out tons of funny money and funnel it to grifters and cronies.

The fed and the government have been propping up the system to stave off the problems, but I can def see it getting worse before it gets better.
 

Reincarnated

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I work for a large community bank (meaning smaller than a true regional bank than you're hearing about in the news, but still operating in substantial markets, couple billion dollars of loans on the books).

I can not stress enough how unique each of these actual failures were. Most responsible banks don't have such a high ratio of deposits that are uninsured, and don't have substantial deposit concentrations. Your run of the mill bank will be alright. Yes most banks are carrying unrealized losses on debt securities (treasuries, MBS, agency notes) but these are not "true" losses. If the bank is not forced to redeem them early, they will not have to recognize losses.

Also, many customers are able to have deposits over the 250K limit insured through ICS or CDARS programs, which basically match banks to swap deposits in order to meet insurance requirements, so you could be insured for substantially over 250K.

Most decent banks are also more conservative with their balance sheet, trying to originate quality loans, and only deploying excess capital into riskier ventures. Regulatory requirements buy and large have worked in keeping the system stable.

The bank where you hold your primary accounts, is probably stable. I would recommend keeping your funds in highly reputable local banks as opposed to large regional or national banks. It sounds cliche but that banker down the street is more likely to have your best interests at heart than the guy on Wall St.
 

Plinco

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This guy explains the situation very well

 
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