SVB is Now In the Hands of the FDIC

Klaus

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Other than JP Morgan/Chase none of the others that I deal with on a bi weekly basis is not on that list. So is that good or bad? 3, 2 local credit unions and a local bank that I hope is not run by a bunch of monkeys like SVB.

Regardless I think lending standards are going to tighten. It may not affect you but lower quality corporate and individual borrowers are going to have trouble getting a loan.
 

Tezz500

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Klaus do you think we’re going to see interest rates climb to 80s levels? I’m curious how long we’re gonna have to hunker down for this economic storm that brewing.
 

Rb0891

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Klaus do you think we’re going to see interest rates climb to 80s levels? I’m curious how long we’re gonna have to hunker down for this economic storm that brewing.
Shit. Seems like they are going to have to lower them... Of course a cheeseburger at McDonalds is going to be $20.
 

MG0h3

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Klaus do you think we’re going to see interest rates climb to 80s levels? I’m curious how long we’re gonna have to hunker down for this economic storm that brewing.

I’d give that a 0% chance for numerous reasons.

Inflation is cooling. Came in flat this week on the 12month.

Several other signs that the economy is tightening. Declining savings. Increased CC use.

Fed has gotten better at managing their response to inflation. Typically they start way late, do too much and for too long. If numbnuts hadn’t been counteracting them by handing out more stimulus early on, we’d prob have a shorter and less severe swing.

I’d bet on a hold or 25bps bump while they wait for the next set of reports.




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Tezz500

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I’d give that a 0% chance for numerous reasons.

Inflation is cooling. Came in flat this week on the 12month.

Several other signs that the economy is tightening. Declining savings. Increased CC use.

Fed has gotten better at managing their response to inflation. Typically they start way late, do too much and for too long. If numbnuts hadn’t been counteracting them by handing out more stimulus early on, we’d prob have a shorter and less severe swing.

I’d bet on a hold or 25bps bump while they wait for the next set of reports.




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What’s the situation they call “stagflation?”
High inflation, high unemployment?

I feel a good fookin coming on…
 

Morgan

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Regardless I think lending standards are going to tighten. It may not affect you but lower quality corporate and individual borrowers are going to have trouble getting a loan.

Perhaps a move to credit unions (from big institutions like BofA, Chase, etc.) is one way for individuals to retain better service and rates?

Could also see the big players grow more competitive with a tighter hold on market share and [attempts at] attracting new clients. May be good for us.
 

Tezz500

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Perhaps a move to credit unions (from big institutions like BofA, Chase, etc.) is one way for individuals to retain better service and rates?

Could also see the big players grow more competitive with a tighter hold on market share and [attempts at] attracting new clients. May be good for us.

All my banking is through several different Credit unions. NavyFed etc.

I really don’t know how much of a difference that makes in being “more secure” but I always found them and the others I use to be way more reasonable with rates than the Big Money Vaults.
 

Rb0891

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That boat has sailed I think. I’m no financial wiz but I’d think lowering rates Would be disastrous would it not?
Probably everything is disastrous at this point. LOL. Apparently too many of the geniuses didn't hedge their interest rate risk even though its been obvious for some time... so who knows. Geniuses = the morons that run all the companies too big to fail.
 

Tezz500

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Probably everything is disastrous at this point. LOL. Apparently too many of the geniuses didn't hedge their interest rate risk even though its been obvious for some time... so who knows. Geniuses = the morons that run all the companies too big to fail.

I mean it’s not even gambling when the feds bail you out and you get a golden parachute to leave the company…

Why not go hard in the paint running these “Too Big to fails?”
 

Rb0891

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I mean it’s not even gambling when the feds bail you out and you get a golden parachute to leave the company…

Why not go hard in the paint running these “Too Big to fails?”
Very true, but I guess at least this time, the true powers at SVB aren't getting a parachute, so that is good. Still wish the depositors would have some type of haircut though. They aren't blameless contrary to the douchebags on TV.
 

Klaus

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Klaus do you think we’re going to see interest rates climb to 80s levels? I’m curious how long we’re gonna have to hunker down for this economic storm that brewing.

I think rates are in the midst of rolling over. I expect mortgage rates will be lower a year from now. But: credit will tighten. 2011/2012/2013 might be a good analogy. Rates were low but it was a PIA to get credit and those that are poor credit are going to have trouble.

I am pretty sure that fed funds will be lower this time next year as the bottom is going to fall out of inflation in the 2H of this year.
 

JAJ

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I'm waiting for a story to come out that a group of VC's, PE's and hedge funds all took big short positions on SVB and then simultaneously pulled their deposits - $42 Bn - out to cause the fall.
 

Klaus

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Perhaps a move to credit unions (from big institutions like BofA, Chase, etc.) is one way for individuals to retain better service and rates?

Could also see the big players grow more competitive with a tighter hold on market share and [attempts at] attracting new clients. May be good for us.

All my banking is through several different Credit unions. NavyFed etc.

I really don’t know how much of a difference that makes in being “more secure” but I always found them and the others I use to be way more reasonable with rates than the Big Money Vaults.

Also credit unions are probably less bureaucratic which is going to make a significant difference. Every large bank is rallying credit committees to come up with reasons not to lend. The government is already rallying for more regulations. The net effect will be credit tightening. Credit unions are probably far less effected by this.
 

Klaus

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I'm waiting for a story to come out that a group of VC's, PE's and hedge funds all took big short positions on SVB and then simultaneously pulled their deposits - $42 Bn - out to cause the fall.

FYI VCs/PE dont short stocks. They do not even have prime broker accounts LOL

Although twitter will have you believe otherwise, VCs were caught flat footed by this. The biggest **** ups that I observed were by some very prestigious VCs. They had all of their banking relationships at SVB - operating account, cash control accounts, all were >$250k. This is from direct experience.

There was an attempt to buy deposits at a discount but this did not happen since the FDIC back stopped all deposits.

Edit: I should note one thing that is kind of dumb about the (((tHe VcS CaUsEd tHiS!!!!))) narrative is that it betrays the ignorance of how venture works. SVB was an axe in venture debt. They provided all debt to the underlying companies that VCs provide equity to. This debt was artificially cheap which juiced the returns of the equity that was owned by the VCs.

The VCs LOVED SVB which is why they all had their operating and cash accounts at SVB. It was a quid pro quo. They were a golden goose which is going to **** up venture returns from here on out.

Here is a primer on venture debt. SVB was HUGE in this market Venture Debt
 
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Morgan

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All my banking is through several different Credit unions. NavyFed etc.

I really don’t know how much of a difference that makes in being “more secure” but I always found them and the others I use to be way more reasonable with rates than the Big Money Vaults.
All my banking is through several different Credit unions. NavyFed etc.

I really don’t know how much of a difference that makes in being “more secure” but I always found them and the others I use to be way more reasonable with rates than the Big Money Vaults.

I have a few credit unions that hold tiny deposits to maintain the relationship. Thinking I’ll convert everything.
The big banks tech services have been superior(and why I stayed), but I think the CUs have caught up at this point.
 

Tezz500

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I have a few credit unions that hold tiny deposits to maintain the relationship. Thinking I’ll convert everything.
The big banks tech services have been superior(and why I stayed), but I think the CUs have caught up at this point.

What do you mean when you say Tech Services?
 

Tezz500

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Online banking, free ATMs, automatic bill pay, photo deposits, etc.

Hmm.. I use 3 different credit unions. All are far superior to when I used PNC and M&T.

Navy Fed is light years ahead of any bank I’ve used regarding customer service and tech abilities like you mentioned.
 

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