Silicon Valley Bank Collapse

[littledan]

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All good now.

why the fuck does this guy hold a press conference while actively eating mashed potatoes and why the fuck does it take him 4.5 minutes to finish eating those potatoes?

[davidI]

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Gotta be pretty dumb to buy 10 year bonds at record low rates. Really can’t understand who thought that was a good idea.

Remember our idiot Central Bankers promising to keep rates low for a long long time? Yea, me too.

The problem in this case is that most banks, who actually have risk management and don't act like degenerate gamblers, enter interest rate swaps to hedge against their bond/treasury portfolio.

Another case of moral hazard. I hope management end up in jail and investors lose everything (depositors receiving back everything).

[ZenOps]

It does pose the question. Should banks be allowed to deny large deposits?

It sounds strange sure, but arguably if they did not take in large digital deposits they might not be in this situation. Take for example a Canadian bank that gives zero interest on a $5 million or higher deposit to a "liquid" account. Almost any NASA scientist from the United states could do a conversion to Canadian from the Trilion extra dollars they print every year to fund it. Since noone ever denies a digital dollar conversion request (say USD to CAD) all the US has to really do to collapse a Canadian bank is put a large deposit in and request it all back in paper and nickels, or even just the entire digital amount the day after the Canadian bank does the responsible thing and puts it in a multiyear bond.

Logically speaking the big five should bring back zero interest on liquid accounts over $1 million. The prudent thing to do would be to give negative rates on accounts over $10 million, like many european banks do. The other way to do it would be to blacklist the US dollar *cough*

In a slow or no growth economic environment, deposits are liabilities. If you go by the moon landing, we've been in negative growth for my entire life.

But of course, that type of thing would probably create more fear in the general public who do not understand why.

[zechs]

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Thanks for the hot tip! Send it 12 hours earlier next time!

Honestly curious, what made you pick FRC in the first place over any other?

[max_boost]

BTC and ETH have been moving since this svb thing. Is there a correlation?

[Sentry]

2 main things, USDC was in SVB so that """stable""" coin depegged causing a big price dump across the board for crypto. It's recovered now and in addition to that, Binance bought 1 billion in bitcoin.

[JustinL]

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BTC and ETH have been moving since this svb thing. Is there a correlation?

Indirectly. SVB collapse has made the likelihood of more rate hikes a lot lower. When rate hikes stop, the USD becomes much less appealing and people are going to look for other places to put their money as the USD will weaken. Gold, BTC, etc, will look pretty good.

[JustinL]

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Honestly curious, what made you pick FRC in the first place over any other?

It was actually timing. I made the trade around 9:15 our time (11:15 NY) WAL had already recovered most of what it was going to do yesterday. FRC was in a trading halt and I figured it would follow WAL up. When the halt ended volatility was through the roof and I had put in a limit order. Basically I needed to find something quickly before the mob figured out that the US regional banking system was not over and WAL had already taken off.

[Manhattan]

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BTC and ETH have been moving since this svb thing. Is there a correlation?

Lower chance of rate hikes = shitco rally / party on

[max_boost]

I like a good party.

[ZenOps]

Thing is: I'm sure that any smaller US bank is now probably limiting new customers. The absolute last thing you want as a bank right now is more deposits. If someone came to a bank wanting to deposit a hundred million, I can imagine they may be turned down - or highly encouraged to do a 10 year term deposit.

Smaller treasury branches might just simply not take new customers at all.

Welcome to the new world.

[ZenOps]

Since FTX seems to have triggered all of this, it might be a good idea to back off crypto as the immediate successor to the dollar.

Its not far off that USA should consider printing $1,000 or $10,000 bills. It is too bad they can't do it without also triggering some sort of panic. $1,000 bills did exist way back before 1970, at a time when they really did not need that denomination. But if its going to be one $1,000 bill to buy a dozen sheets of plywood, its a useable denomination for sure.

[vengie]

[ThePenIsMightier]

That's a worthy combo breaker!
LoL!!

[ZenOps]

Moodys to review downgrades for six US banks. Could get very ugly out there.

[BavarianBeast]

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so fucking tempting to buy up regional bank stocks
@BavarianBeast .....dooooooo it.

Oddly enough I bought a fair bit of Customers Bancorp haha

[sxtasy]

A pretty good explanation/take on it all.

[BavarianBeast]

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Oddly enough I bought a fair bit of Customers Bancorp haha

Easy money

[davidI]

[suntan]

That is fantastic.