Silicon Valley Bank Collapses, Causes Concern Within Tech Industry, Roku Divulges its SVB Investments

[trparky]

So slightly different group than "taxpayers", but still basically "The American People" so to speak.

So, in other words, us... the taxpayers. It always comes down upon us. It may be in a bit of a roundabout way but yes. it always comes down upon us.

 

[trsttte]

So who is covering the tab. The US taxpayers?

Of course, we are!!! The US taxpayers are always screwed like this.

No, you won't cover anything. Short term "us taxpayers" (not really, just the fed moving numbers around) loan whatever needed to cover the deposits in the bank and long term they get everything back through the assets of the bank (i.e. those 10y and 30y bonds that started this mess).

The problem of SVB all things considered is relatively simple to solve, they just need cash to ensure deposits because they have their "own" irresponsibly tied in long term bonds that can't be cashed out now.

 

[Why_Me]

No, you won't cover anything. Short term "us taxpayers" (not really, just the fed moving numbers around) loan whatever needed to cover the deposits in the bank and long term they get everything back through the assets of the bank (i.e. those 10y and 30y bonds that started this mess).

The problem of SVB all things considered is relatively simple to solve, they just need cash to ensure deposits because they have their "own" irresponsibly tied in long term bonds that can't be cashed out now.

Where does the Fed get its money from if not the taxpayers?

 

[trparky]

Where does the Fed get its money from if not the taxpayers?

Bingo.

Oh yeah, we'll just add it to the national debt that our great, great, great, great grandchildren will still be paying off in the distant future.

 

[Legacy-ZA]

Is it just me that hopes that Jensen had a stash of his ill-gotten gains there?

 

[mama]

Of course, we are!!! The US taxpayers are always screwed like this.

No, no bailout coming this time. Inflation is too high. Money can't be pumped in, or inflation becomes more of an issue.

 

[TumbleGeorge]

Preparing for the end of fiat cash? Is there a future for the dollar that you can hold in your hands, smell, hear the rustle of the material as you count bills, and the jingle of coins. Inhaling the smoke from the burning hundred dollar bill you use to light your expensive Cuban cigar.

 

[dragontamer5788]

So, in other words, us... the taxpayers. It always comes down upon us. It may be in a bit of a roundabout way but yes. it always comes down upon us.

FDIC members pay for FDIC insurance based off of FDIC assessments (which is roughly based on amount of liabilities in the bank). The bigger the bank, the more they pay for FDIC insurance.

Again, I'm not sure if its a very direct line to "American Taxpayers". FDIC insurance is paid for by banks directly. By being generous to your perspective, I can argue that these costs are passed onto the depositors (ie: anyone with a bank account). But personally speaking, my bank account balance is high enough that I don't pay any fees, though I can imagine that a number of people do pay banking fees.

So what paid for this, were the various fees that you paid to your bank. (Which in my case, is $0 directly, though banks like Bank of America obviously skim off of the interest rates, at least a little bit).

So I can see the argument that Americans (who by and large own bank accounts) are at least in the pool of money that goes into FDIC insurance. But the direct payments are from the banks themselves, and its only an indirect fee at best that ties the typical American to this whole process.

 

[lemonadesoda]

They invoked the "systemic risk exception", so they're ignoring the ceiling for this case.

That's a new one on me! Is it a new rule they just invented - to protect people with political influence, or indeed themselves and their own investments. This needs a forensic audit trail!

 

[Why_Me]

FDIC members pay for FDIC insurance based off of FDIC assessments (which is roughly based on amount of liabilities in the bank). The bigger the bank, the more they pay for FDIC insurance.

Again, I'm not sure if its a very direct line to "American Taxpayers". FDIC insurance is paid for by banks directly. By being generous to your perspective, I can argue that these costs are passed onto the depositors (ie: anyone with a bank account). But personally speaking, my bank account balance is high enough that I don't pay any fees, though I can imagine that a number of people do pay banking fees.

So what paid for this, were the various fees that you paid to your bank. (Which in my case, is $0 directly, though banks like Bank of America obviously skim off of the interest rates, at least a little bit).

So I can see the argument that Americans (who by and large own bank accounts) are at least in the pool of money that goes into FDIC insurance. But the direct payments are from the banks themselves, and its only an indirect fee at best that ties the typical American to this whole process.

The FDIC insurance maximum amount is $250,000 per customer. The US govt (taxpayers) is reimbursing them all their money.

That's a new one on me! Is it a new rule they just invented - to protect people with political influence, or indeed themselves and their own investments. This needs a forensic audit trail!

This ^^

 

[lemonadesoda]

The Government and the Bank of England have 'facilitated a private sale' of Silicon Valley Bank UK to HSBC , with 'no taxpayer support', Jeremy Hunt said today. The Chancellor added that customers of SVB UK will be able to access their deposits and banking services as normal from today. He also said that the transaction was facilitated by the Bank of England in consultation with the Treasury, using powers granted by the Banking Act 2009.

There is no way any due-diligence has been done at sufficient depth for the UK Gvt or HSBC to have any clue at all what the status of the balance sheet and liabilities are.

However, make be it's an opportunity to tech-wash the banks hidden reserves from

Gaddafi Libya claims (2011)
According to Global Witness and cited by BBC, "billions of dollars of assets" were held by the bank for the Libyan Investment Authority, controlled by Colonel Muammar Gaddafi. Following Gaddafi's overthrow the bank declined to reveal information about the funds citing customer confidentiality.

 

[erek]

There is no way any due-diligence has been done at sufficient depth for the UK Gvt or HSBC to have any clue at all what the status of the balance sheet and liabilities are.

However, make be it's an opportunity to tech-wash the banks hidden reserves from

First Republic Bank stock plunges 60% as regional bank fears continue​

 

[TumbleGeorge]

First Republic Bank stock plunges 60% as regional bank fears continue​

Didn't believe without liink

 

[Why_Me]

Didn't believe without liink

First Republic drops 60%, leads decline in bank stocks despite government's backstop of SVB

First Republic Bank led a decline in bank shares Monday that came even after regulators' extraordinary actions Sunday evening.

www.cnbc.com

 

[erek]

Didn't believe without liink

First Republic drops 60%, leads decline in bank stocks despite government's backstop of SVB

First Republic Bank led a decline in bank shares Monday that came even after regulators' extraordinary actions Sunday evening.

www.cnbc.com

First Republic Bank and PacWest Bancorp now

 

[R0H1T]

So looks like a precursor to 2008 disaster? From memory such massive crashes usually occur 8-10 years apart, at least here, the Covid led meltdown 3 years back wasn't really much of a crash taking into account the overall stock market performance before/after the first major wave hit! If this spreads to other smaller banks or one of the bigger ones we'll probably see a repeat of 15 years back, not to that scale probably but who knows

We're overdue a major crash any way & this might be it.

 

[Slizzo]

So looks like a precursor to 2008 disaster?

No, it won't be. FDIC has already stepped in and this bank will not be bailed out.

 

[R0H1T]

Well what about the other banks? It isn't just about saving these banks or saving a bank, it's the larger sentiment that whether your money is safe or not. In that the stock markets act like a hive mind.

 

[dragontamer5788]

Yeah, remember that this FDIC deal still wipes out the shareholders entirely. In the case of SIVB, $Billions of shareholders were wiped out. They're going to get $0, when the stock price was $230 just last Wednesday.

So shareholders are still speculating on whether or not various banks will "make" it. Even with FDIC backing up depositors, there's no guarantee that shareholders will be anywhere near whole.

 

[trparky]

And now there's a rumor that a fourth bank is collapsing as I type this message. Again, it's a rumor so can't be sure.

 

[R0H1T]

Which one?

 

[trparky]

Which one?

I'm just reading and hearing stuff, no one's mentioned a name yet so hence it's a rumor at this point.

 

[the54thvoid]

It's funny how it's rumours that tend to make runs worse. What appears consistent is exposure to substantial digital (crypto) assets. I think it said Signature had 8 billion?

 

[lemonadesoda]

This is very interesting - I'm reading that "protecting crypto" is part of the strategy, as well as avoiding a run on smaller banks. reuters

Why would there be any interest in protecting crypto? It isn't something that the Federal Reserve would normally be interested in. Seems like there might be political leanings on what's going on - not just banking issues. When you look at https://www.circle.com/en/ , and you speculate how much "black assets" are now tied up in crypto - you can imagine a lot of geopolitical activities unravelling if payments systems stutter, and if black assets vapourise. This is very different from normal small-bank liquidity crises that we have had in the past.

We have a new fiscal management problem. In the past, altering interest rates and bond yields was a fabulous monetary policy for managing the economy. Now, the financial system is so leveraged (again), and the off-balance sheet effects (leveraging, derivatives, crypto, start up banks relatively poorly capitalised) are so large, that there is massive contagion risk, and normal macroeconomic steering can have massive unintended consequences.

 

[R0H1T]

This is very interesting - I'm reading that "protecting crypto" is part of the strategy, as well as avoiding a run on smaller banks. reuters

Why would there be any interest in protecting crypto? It isn't something that the Federal Reserve would normally be interested in. Seems like there might be political leanings on what's going on - not just banking issues. When you look at https://www.circle.com/en/ , and you speculate how much "black assets" are now tied up in crypto - you can imagine a lot of geopolitical activities unravelling if payments systems stutter, and if black assets vapourise. This is very different from normal small-bank liquidity crises that we have had in the past.

The one rule of autocracies/theocracies/democracies ~ you don't touch the political rulers' money!