Silicon Valley losing some of its luster?

[52184]

I read today that SVB bank executives were paid their bonuses days before the collapse.

They were, as per the normal March schedule for such boni at SVB, so all those transactions were set and scheduled long before the run started.

Best,
DeVern

 

[Omega Man]

The FDIC auction of SVB reportedly closed at 2pm EDT, so quite possible this evening’s news will announce a buyer. And word is that depositors will have access to their funds tomorrow. Next question is, what will happen with Signature Bank?

Best,
DeVern

Looks like NY regulators just closed Signature. Via Bloomberg.

OM

 

[easy]

Looks like NY regulators just closed Signature. Via Bloomberg.

OM

This should be interesting...

"Depositors at the New York-based bank will have access to their money under 'a similar systemic risk exception' to one that will allow Silicon Valley Bank clients to get their money on Monday, the Treasury Department, the Federal Reserve and the Federal Insurance Deposit Corp. said in a joint statement Sunday.

'All depositors of this institution will be made whole,' the regulators said. 'As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer."

https://www.bloomberg.com/news/arti...-regulators-fdic-says?leadSource=uverify wall

E.

 

[RPGR90s]

I’m sure the decision will be made to “allow” my tax dollars to bail them out. Sounds like they are “too big to fail” and we’ve heard that song and dance back in 2008.

And THAT is a CRIME. If you're going to take tax dollars to bail anyone out, then don't blame Capitalism for the failure.

 

[easy]

THAT happens all the time - in banking cases, and other cases.

In Texas, the state is going to be held liable for a multi-million dollar judgment because of the attorney general's corruption that lead to numerous whistleblower lawsuits. (This does not include the numerous felony indictments he is facing.)

The current legislature is considering changing state law to hold the current AG monetarily responsible, not the tax payers. But, I wouldn't hold my breath.

E.

 

[kbasa]

I’m sure the decision will be made to “allow” my tax dollars to bail them out. Sounds like they are “too big to fail” and we’ve heard that song and dance back in 2008.

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.

 

[Omega Man]

It's kind of surprising that folks don't seem to understand banking and are unaware of how the FDIC works.

Except- It just seems that the FDIC coverage has "in general" changed. The FDIC sticker on the banks door(s) will need an upgrade.

And- Signature Bank, a New York financial institution with a big real estate lending business that had recently made a play to win cryptocurrency deposits, closed its doors abruptly on Sunday, after regulators said that keeping the bank open could threaten the stability of the entire financial system. Credit New York Times, making it look like a Cryptocurrency bank has been "backstopped"?

I listened to about 4 dozen viewpoints early this morning, all headed like an exploding Chrysanthemum firework, and all seeming valid.

Money salad, dripping wet. When the "salad spinner" shows up to dry things out, I can't guess the outcome.

OM

 

[kbasa]

Except- It just seems that the FDIC coverage has "in general" changed. The FDIC sticker on the banks door(s) will need an upgrade.

And- Signature Bank, a New York financial institution with a big real estate lending business that had recently made a play to win cryptocurrency deposits, closed its doors abruptly on Sunday, after regulators said that keeping the bank open could threaten the stability of the entire financial system. Credit New York Times, making it look like a Cryptocurrency bank has been "backstopped"?

I listened to about 4 dozen viewpoints early this morning, all headed like an exploding Chrysanthemum firework, and all seeming valid.

Money salad, dripping wet. When the "salad spinner" shows up to dry things out, I can't guess the outcome.

OM

Remember that we're protecting consumer depositors like you and I when the FDIC steps in with coverage. Got deposits over $250K? You're not going to get all your money back. But if you're a regular person with a checking and savings account, unless you've got more than a quarter million dollars in there, you're getting your money back, right? That's how it's designed to work. When I was younger, I think the limit was $100K or something, but they've expanded coverage.

I don't see the need for the "we're all getting screwed bailing these banks out" commentary that seems to be evident here. The funds to keep us folks whole is coming from the FDIC, which the banks pay into, not us or the Feds.

Not on this forum, but elsewhere, I've seen some pretty solid nihilism in the form of "let it all collapse", which sounds like a great way to explode the entire financial system. I dunno about you, but I'm getting close to retirement and I'd really like to be able to have all the money we've saved safe and secure.

 

[easy]

I think the concern expressed above is over the amount of money that is lost that will not be covered by the FDIC, i.e. over the $250,000.00 for married persons.

Yellen has announced yesterday that there will be no govt. bail out for SVB.

E.

 

[Omega Man]

Remember that we're protecting consumer depositors like you and I when the FDIC steps in with coverage. Got deposits over $250K? You're not going to get all your money back. But if you're a regular person with a checking and savings account, unless you've got more than a quarter million dollars in there, you're getting your money back, right? That's how it's designed to work. When I was younger, I think the limit was $100K or something, but they've expanded coverage.

My point was that there were rules in place regarding FDIC coverage. It's the Special Rules for Special People (banks etc) does't play well for such important issues.

I don't see the need for the "we're all getting screwed bailing these banks out" commentary that seems to be evident here. The funds to keep us folks whole is coming from the FDIC, which the banks pay into, not us or the Feds.

I don't really see that here beyond the average American having to be involved in another cleanup. Noteworthy- The banks operational fees in regards to FDIC are apparently going to be increased thusly increasing overhead of a banks operational costs, costs are passed on to the depositors.

Not on this forum, but elsewhere, I've seen some pretty solid nihilism in the form of "let it all collapse", which sounds like a great way to explode the entire financial system. I dunno about you, but I'm getting close to retirement and I'd really like to be able to have all the money we've saved safe and secure.

Perhaps they don't realize the gravity of this kind of wish. Things seem to be rather messy in general nowadays. If you followed the Gamestop deal of late, it seems to be a case study of the relationship of Social Media vs Reality?
You seem to have noticed "The Sign on the Door" at the bank. I'll be you have acted accordingly.

OM

 

[88bmwjeff]

To add to the woes, First Republic Bank's (FRB) stock dropped ±60% 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/markets/first-republic-bank-shares-plummet-as-banking-fears-spread/ar-AA18zBJG

 

[pglaves]

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.

 

[Omega Man]

In a trip through Superman’s bizzarro world, Crypto shows the largest benefit from all this?

OM

 

[pglaves]

In a trip through Superman’s bizzarro world, Crypto shows the largest benefit from all this?

OM

Nope!

 

[Omega Man]

Nope!

With the NY bank backstop, Crypto is up $3K.

OM

 

[rangerreece]

It's kind of surprising that folks don't seem to understand banking and are unaware of how the FDIC works.

Don’t 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 I’ve seen a thing or two. (Love that commercial)

All that said, I hope (and that is where we are at these days… hope) the tax payer isn’t on the hook directly or indirectly for this, and other bail outs soon to follow.

 

[pglaves]

All that said, I hope (and that is where we are at these days… hope) the tax payer isn’t 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 $$$.

 

[kbasa]

Don’t 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 I’ve seen a thing or two. (Love that commercial)

All that said, I hope (and that is where we are at these days… hope) the tax payer isn’t 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?

 

[Visian]

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!

 

[easy]

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-roll-back-bank-regulations-resurfaces-amid-svb-collapse-1787112

E.