[RickFLM4]

Originally Posted by 2000cs

https://www.federalreserve.gov/newse...y20230312b.htm

So I guess the plan is to move uninsured deposits ahead of secured creditors. That’s the only way to avoid taxpayers bearing losses. Well at least until those creditors get a bailout.

I wonder what could go wrong?

[2000cs]

Originally Posted by RickFLM4

So I guess the plan is to move uninsured deposits ahead of secured creditors. That’s the only way to avoid taxpayers bearing losses. Well at least until those creditors get a bailout.

I wonder what could go wrong?

I think they moved uninsured (and all other) deposits to the side; they will get funded as needed by taxpayers via FED, FDIC and Treasury Dept. [Edit: the release says FDIC will fully fund all deposits and then replace that funding via special assessments on all remaining banks. So bank costs go up; and then the FED and treasury actions of course will have costs to the taxpayers.]. Secured creditors will get a bite at assets, if any, and that may include the parent company’s assets. I think a merger is in the works, but it isn’t clear who can and will take this on.

This weekend was about reassuring the world’s depositors so bank runs are avoided. The week ahead will be about working the underlying problems, including the FED’s role in drying up liquidity.

And yeah, lots could go wrong. Hopefully not, but it is far from over.

[RickFLM4]

Originally Posted by 2000cs

I think they moved uninsured (and all other) deposits to the side; they will get funded as needed by taxpayers via FED, FDIC and Treasury Dept. Secured creditors will get a bite at assets, if any, and that may include the parent company’s assets. I think a merger is in the works, but it isn’t clear who can and will take this on.

This weekend was about reassuring the world’s depositors so bank runs are avoided. The week ahead will be about working the underlying problems, including the FED’s role in drying up liquidity.

And yeah, lots could go wrong. Hopefully not, but it is far from over.

I misread it - went back and it does say unsecured creditors.

Not sure how they can say definitively taxpayers will not bear any cost though until it plays out.

[2000cs]

Originally Posted by RickFLM4

I misread it - went back and it does say unsecured creditors.

Not sure how they can say definitively taxpayers will not bear any cost though until it plays out.

It is a bit of sleight-of-hand. The FDIC apparently has enough resources to take care of all deposits at SVB and Sig, and they may be making an assumption on the take rate being less than 100% (some deposits remain). But clearly they don’t have the resources to do that for all banks. I wonder how many more they could handle without emergency (taxpayer) funding? I think they are hoping depositors generally (not just at those two banks) don’t notice.

[ASAP]

lol that sounds super shaky...

[XKxRome0ox]

So how f*ed is the stock market from this? Or better question - how do we make some money from this situation?

[kscarrol]

All major indices are are up 1% or more tonight. Partly from the bailout but I suspect the fed is going to have to stop raising rates.

[NickyC]

Originally Posted by XKxRome0ox

So how f*ed is the stock market from this? Or better question - how do we make some money from this situation?

Depends on the meaning of f*ed. If you mean f*ed as in markets are no longer based in reality, and are completely fraudulent schemes designed to syphon off the last bit of middle/lower income into the pockets of the wealthy. Then yes they are f*ed.

However, if by f*ed you mean there will be a big crash tomorrow, most likely no. In fact, we're likely to see a rally as the only thing this sham of a market is concerned with any longer is endless QE and free money. By once again bailing out the losers, who somehow couldn't conceive of interest rates ever increasing again while they gobbled up treasuries, the party will be back on.

It's absolutely grotesque what is going on right now. This whole shit show should have been allowed to collapse in 2008 with the MBS scams, and the dot com bubble before that. We'd be on a much stronger footing than we are now, but instead the outright thievery will continue until the collapse of the dollar and the complete destruction of the US economy. There is absolutely no turning this thing around now, the corruption is too deep. These are end of Rome days, it's why you have people so whacked out on drugs and confused, they can't even figure out what the difference is between a man and a woman any longer. The entire financial system of the USA is on the brink, and 99% of what you'll hear tonight is about some degenerates in Hollywood (have to admit I hope Top Gun wins though).

These things take time and never happen overnight, but the events of the last few days have certainly quickened the process.

If anyone doesn't understand just how fundamentally f*ed things are, two of the top 40 banks in the USA have just collapsed in a matter of days. This is after what, some lousy increase of rates to 4.75% over the past year? To even have a chance of stopping this inflation cycle we'd need to be well over 10%, that will NEVER happen without the complete destruction of everything. Just four days ago the HEAD OF THE FED, was pitching further rate increases this year. The Fed is comprised of completely incompetent morons, thieves, and degenerate criminals.

[antzcrashing]

Originally Posted by XKxRome0ox

So how f*ed is the stock market from this? Or better question - how do we make some money from this situation?

If this costs a mere penny then the market is spared, in all likelihood it will cost a small fortune, and the market will not like that - namely NASDAQ, QQQ. Banks will fall. DIA will hold, maybe

[chassis]

Time for some data on the US banking system. Who has it?

[antzcrashing]

Idk now if the QQQ Nasdaq index will fade tomorrow. Instead I think small cap tech will be hurt across the board. The micro Qs. I think this is a bottom for the market, the fed will let up and watch. Inflation will cool. We will go back to the races, but not back to the highs.

- Jeff / Mike Santol

Not investing advise

[chassis]

Originally Posted by antzcrashing

Idk now if the QQQ Nasdaq index will fade tomorrow. Instead I think small cap tech will be hurt across the board. The micro Qs. I think this is a bottom for the market, the fed will let up and watch. Inflation will cool. We will go back to the races, but not back to the highs.

- Jeff / Mike Santol

Not investing advise

Thanks for the copy/paste. What is your take?

[E92inNC]

Is there a site that tracks the performance of the etf’s? I’ve been lazy and just buying VTI, would like to diversify and branch out into industry specific stocks like VGT, healthcare, consumer discretionary, etc

Anyone loading up on bank stocks with this dip (BAC, JPM)?

[BMW F22]

Originally Posted by E92inNC

Is there a site that tracks the performance of the etf’s? I’ve been lazy and just buying VTI, would like to diversify and branch out into industry specific stocks like VGT, healthcare, consumer discretionary, etc

Anyone loading up on bank stocks with this dip (BAC, JPM)?

I’m tempted with First Republic Bank having gone from something like $150 to $26. It is a local bank to SV I believe, so a bit risky.

Edit: now at $22. Dropped 20% in the last 10-15 minutes. Folks are fearful about bank stocks!

[dradernh]

Schwab's a buy at $51. Just my 2¢.

[bagekko]

All the top 100 banks are so leveraged everyone of them would fail if there was even a minor run on deposits. The banking rules have become such a joke they take your money and do nothing but stupid & risky things with it. Profits for shareholder returns and employee comp is their whole focus not the customers. SVB & Sig were just really worse at it than the others, the unrealized losses on the books was massive for their size despite posting profits every quarter.

https://www.bankregdata.com//allHMmet.asp?met=LEV

Originally Posted by chassis

Time for some data on the US banking system. Who has it?

[bagekko]

LOL, my wife who is not that knowledgeable in the market just said she heard First Republic is the next to collapse. I had to educate her on many things this weekend because a lot of the customers of a BU of hers banked with SVB.

I would not buy any financial stocks this week, the bottom even on the top too big to fail ones hasn't prolly happened yet from this mess.

Originally Posted by BMW F22

I’m tempted with First Republic Bank having gone from something like $150 to $26. It is a local bank to SV I believe, so a bit risky.

Edit: now at $22. Dropped 20% in the last 10-15 minutes. Folks are fearful about bank stocks!

[RickFLM4]

Originally Posted by bagekko

All the top 100 banks are so leveraged everyone of them would fail if there was even a minor run on deposits. The banking rules have become such a joke they take your money and do nothing but stupid & risky things with it. Profits for shareholder returns and employee comp is their whole focus not the customers. SVB & Sig were just really worse at it than the others, the unrealized losses on the books was massive for their size despite posting profits every quarter.

https://www.bankregdata.com//allHMmet.asp?met=LEV

Isn’t that the way banks are designed to look? Deposits are liabilities so they will always be leveraged. While I agree with regulations over riskiness of investments, minimum capital and liquidity, among other metrics, banks are supposed to use deposits to make loans and other investments.otherwise they would be nothing more than hig vaults we pay to store money in.

[bagekko]

Yes but they keep increasing the risk beyond what used to be normal for banks, the risks they take with your money is crossing the lines of ethics, its not like the old days when they would give home/auto loans, invest in bonds & stuff, they are putting too much money into high risk investments which there are no limits on what they can do. We already went one financial crisis centered around CBO's, while they reduced that, it's not like they learned their lesson, they just are now diversified across many high risk investments. It's not their money they are playing with, and when it goes bad, the govt bails them out.

https://www.cnn.com/2023/03/12/inves...ead/index.html

Originally Posted by RickFLM4

Isn’t that the way banks are designed to look? Deposits are liabilities so they will always be leveraged. While I agree with regulations over riskiness of investments, minimum capital and liquidity, among other metrics, banks are supposed to use deposits to make loans and other investments.otherwise they would be nothing more than hig vaults we pay to store money in.

[dangerus_car]

I think todays is the low for frc. I am going to buy a one year leap on frc call 50.

Lets see

[RickFLM4]

Originally Posted by bagekko

Yes but they keep increasing the risk beyond what used to be normal for banks, the risks they take with your money is crossing the lines of ethics, its not like the old days when they would give home/auto loans, invest in bonds & stuff, they are putting too much money into high risk investments which there are no limits on what they can do. We already went one financial crisis centered around CBO's, while they reduced that, it's not like they learned their lesson, they just are now diversified across many high risk investments. It's not their money they are playing with, and when it goes bad, the govt bails them out.

https://www.cnn.com/2023/03/12/inves...ead/index.html

Treasuries are the least risky investment a bank could hold from a default perspective and many are bought with the intent to hold them until maturity. Interest rate risk is another matter. As described in the article you linked, as the Fed has raised rates those older treasuries are worth less if traded, but still exceptionally safe if held to maturity. A run on any bank will cause a lot of hurt, particularly in rising rate environment.

I can get on board with questioning the wisdom of financial institutions buying investments that are so long and not rotating out of them before paper losses built up. I can also get on board with questioning the wisdom of expecting customers of a bank like SVB always being able to raise capital. But with the Fed keeping rates so low + perpetual QE and low inflation for decades, I’m not surprised by it.

[bagekko]

Yeah and interest rates have been very low for the past two decades, but anyone with knowledge especially in the financial sector knew 18+ months ago rates were going to be raised and by a lot. Why are banks holding onto the low yield treasuries of old, because they would have to realize the losses now which would lower the stock, reduce dividends, and bonuses today. Their greed before looking out for the customers, the old cliché of financial institutions will almost always be true and never change.

Originally Posted by RickFLM4

Treasuries are the least risky investment a bank could hold from a default perspective and many are bought with the intent to hold them until maturity. Interest rate risk is another matter. As described in the article you linked, as the Fed has raised rates those older treasuries are worth less if traded, but still exceptionally safe if held to maturity. A run on any bank will cause a lot of hurt, particularly in rising rate environment.

I can get on board with questioning the wisdom of financial institutions buying investments that are so long and not rotating out of them before paper losses built up. I can also get on board with questioning the wisdom of expecting customers of a bank like SVB always being able to raise capital. But with the Fed keeping rates so low + perpetual QE and low inflation for decades, I’m not surprised by it.