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Thread: Silicon Valley losing some of its luster?

  1. #31
    Registered User 88bmwjeff's Avatar
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    To add to the woes, First Republic Bank's (FRB) stock dropped Ī60% on financial worries. FRB is a medium sized regional bank headquartered in San Francisco. Let's hope these are isolated events and not something bigger; however, I'm not so sure about that.

    https://www.msn.com/en-us/money/mark...ad/ar-AA18zBJG
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  2. #32
    #13338 PGlaves's Avatar
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    Quote Originally Posted by powwow View Post
    I read today that SVB bank executives were paid their bonuses days before the collapse.
    That is not true. The bonuses where not paid days before the collapse: they were paid hours before the collapse.
    Paul Glaves - "Big Bend", Texas U.S.A
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  3. #33
    Fortis Fortuna Adiuvat Omega Man's Avatar
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    In a trip through Supermanís bizzarro world, Crypto shows the largest benefit from all this?

    OM
    "You can do good or you can do well. Sooner or later they make you choose". MI5
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  4. #34
    #13338 PGlaves's Avatar
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    Quote Originally Posted by Omega Man View Post
    In a trip through Supermanís bizzarro world, Crypto shows the largest benefit from all this?

    OM
    Nope!
    Paul Glaves - "Big Bend", Texas U.S.A
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  5. #35
    Fortis Fortuna Adiuvat Omega Man's Avatar
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    Quote Originally Posted by PGlaves View Post
    Nope!
    With the NY bank backstop, Crypto is up $3K.

    OM
    "You can do good or you can do well. Sooner or later they make you choose". MI5
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  6. #36
    Quote Originally Posted by kbasa View Post
    It's kind of surprising that folks don't seem to understand banking and are unaware of how the FDIC works.
    Donít let the Alabama address fool ya, I know how the FDIC is supposed to work. I gots me one of them thar college edumcations.

    I also know how politics works, and I can directly point to government (aka taxpayer) funding/subsidization that is neither authorized nor ethical. Lobbyists know how to squeeze the right financial teat to get monies re-purposed and re-prioritized when they are motivated.

    I work for the government; I know a thing or two, because Iíve seen a thing or two. (Love that commercial)

    All that said, I hope (and that is where we are at these daysÖ hope) the tax payer isnít on the hook directly or indirectly for this, and other bail outs soon to follow.
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  7. #37
    #13338 PGlaves's Avatar
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    Quote Originally Posted by rangerreece View Post
    All that said, I hope (and that is where we are at these daysÖ hope) the tax payer isnít on the hook directly or indirectly for this, and other bail outs soon to follow.
    Unless they are lying any FDIC losses (distinct from the bank shareholder losses) will be covered by extra assessments against all FDIC insured banks. Which may well mean that bank fees will go up to cover the extra FDIC costs. Stay nimble with your $$$.
    Paul Glaves - "Big Bend", Texas U.S.A
    "The greatest challenge to any thinker is stating the problem in a way that will allow a solution." - Bertrand Russell
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  8. #38
    Focused kbasa's Avatar
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    Quote Originally Posted by rangerreece View Post
    Donít let the Alabama address fool ya, I know how the FDIC is supposed to work. I gots me one of them thar college edumcations.

    I also know how politics works, and I can directly point to government (aka taxpayer) funding/subsidization that is neither authorized nor ethical. Lobbyists know how to squeeze the right financial teat to get monies re-purposed and re-prioritized when they are motivated.

    I work for the government; I know a thing or two, because Iíve seen a thing or two. (Love that commercial)

    All that said, I hope (and that is where we are at these daysÖ hope) the tax payer isnít on the hook directly or indirectly for this, and other bail outs soon to follow.
    It would appear, based on comments, that the FDIC is working exactly like it's supposed to work.

    And the Alabama location? Don't y'all have a huge collection of actual rocket scientists in Huntsville?
    Dave Swider
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  9. #39
    Quote Originally Posted by kbasa View Post
    And the Alabama location? Don't y'all have a huge collection of actual rocket scientists in Huntsville?
    At one point in time we had a rocket scientist executive director!


  10. #40
    Registered User easy's Avatar
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    First, I'd like to say Ouch with the "Rocket Scientists" remark.

    We have too many "Rocket Scientists" already. https://www.newsweek.com/trump-era-r...llapse-1787112

    E.

  11. #41
    Quote Originally Posted by kbasa View Post
    It's kind of surprising that folks don't seem to understand banking and are unaware of how the FDIC works.

    The 2008 collapse was brought about through the sale of CDOs (Collateralized Debt Obligations) and this doesn't have any of that in it that I can see. This was driven by bad investments by the bank, not sale of high risk investment instruments on Wall Street.

    It's entirely different. Your tax dollars aren't going to be involved in making the depositors whole, the Federal Depositors Insurance Company will ensure they are reimbursed via the insurance funds SVB paid into FDIC.
    I've always been curious on how the FDIC can insure money that it doesn't have. Since it was created by Congress, does it have an actual budget that it can use to invest in case money needs to be paid out?
    I mean, if my bank failed and I lost $250,000, would the FDIC go to the Federal Reserve and print more paper to give me or would they have it in an account, ready to go?

  12. #42
    Liaison 20774's Avatar
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    Quote Originally Posted by RPGR90s View Post
    I mean, if my bank failed and I lost $250,000, would the FDIC go to the Federal Reserve and print more paper to give me or would they have it in an account, ready to go?
    A quick google found that the FDIC collects premiums from banks and savings association to cover the insurance needs.
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  13. #43
    #13338 PGlaves's Avatar
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    Quote Originally Posted by 20774 View Post
    A quick google found that the FDIC collects premiums from banks and savings association to cover the insurance needs.
    Indeed! Like other insurance companies it charges insured banks premiums which then pay for losses. And if losses go up then premiums go up. So many banks will be paying higher insurance premiums (not unlike houses in flood prone coastal areas, but that is another issue). And those banks may charge customers higher fees for whatever they charge fees for - checking accounts, over-drafts, debit cards, loans, etc. So in the end, the customers pay. Gotta keep the share holders share value and dividends up!!
    Paul Glaves - "Big Bend", Texas U.S.A
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  14. #44
    Fortis Fortuna Adiuvat Omega Man's Avatar
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    If any of you interested in how this came to be, you can read about The Meeting at Jekyll Island. Bunch of "good 'ol boys got together".

    It does lead to the question of how the monetary system was originally "thought" to work.

    OM
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  15. #45
    Registered User GTRider's Avatar
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    Quote Originally Posted by Omega Man View Post
    If any of you interested in how this came to be, you can read about The Meeting at Jekyll Island. Bunch of "good 'ol boys got together".

    It does lead to the question of how the monetary system was originally "thought" to work.

    OM
    As outlined by Adam Smith, the patron saint of capitalism and the invisible hand, both banks and capitalism needed close oversight and regulation in order to maintain the level playing field he envisioned as required and optimal for the long-term success of capitalist systems. But he was especially outspoken on those needs for banks.

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