Edaw
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Investing General Discussion
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Guest, it's time once again for the massively important and exciting FoH Asshat Tournament!
Go here and give us your nominations!Who's been the biggest Asshat in the last year? Give us your worst ones!
Sanrith Descartes
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Ok which of you fuckers is this guy. This is pure FOH investment thread right here.
Guy spends hours transferring all his personal and corporate accounts out of SVIB early Thursday morning and then turns around and says this after lunch...
"1:30 PM: SVB is a solid bank. I know their CEO, Greg Becker. Great guy. I figure this is a temporary issue caused mainly by people panicking. They'll recover. I buy shares of SVB at what I consider significantly low prices."
So this guy is helping to create the bank run that will bury the bank he uses and then turns around and calls it a "temporary issue caused mainly by people panicking". This is an FOH level of lack of self-awareness right here. Oh and for good measure he buys shares of stock in the bank that he just helped crater. el-oh-fucking el.
Guy spends hours transferring all his personal and corporate accounts out of SVIB early Thursday morning and then turns around and says this after lunch...
"1:30 PM: SVB is a solid bank. I know their CEO, Greg Becker. Great guy. I figure this is a temporary issue caused mainly by people panicking. They'll recover. I buy shares of SVB at what I consider significantly low prices."
So this guy is helping to create the bank run that will bury the bank he uses and then turns around and calls it a "temporary issue caused mainly by people panicking". This is an FOH level of lack of self-awareness right here. Oh and for good measure he buys shares of stock in the bank that he just helped crater. el-oh-fucking el.
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Sanrith Descartes
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I could be wrong here, but I dont think the executive branch has the authority to override the laws that place the FDIC cap at $250k. They may say it, but that dont mean they can do it. This sounds like its gonna be similar to student loan forgiveness. Gonna be fun times tomorrow.
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Burnem Wizfyre
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Mist
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Sanrith Descartes
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Mist
REEEEeyore
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The Executive/Treasury couldn't do it, but the Fed could, especially if it threatens the dollar and the money supply itself. The Fed has the money to cover it, and this is a fundamental job of the Fed.
Sanrith Descartes
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AI disagrees with you. As do I.
Im not saying they wont try it as the pressure to save the rich and connected will be great. But the courts might say otherwise.
Big Phoenix
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That was a wtf read.
Panics and tries to pull his money out
Hours later hes buying stock in the bank
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Burnem Wizfyre
Log Wizard
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Remind me again who has the authority to declare war? Oh wait it’s not a war it’s an Invasion, go ahead Mr. President, lol rules and laws.
Sanrith Descartes
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I told you, he is one of us. My money is on
Moglyzoke Moogleman
. That tweet has the Moogleman written all over it. 
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Edaw
Parody
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I x-posted it to politics with rollout. It's a great read.I told you, he is one of us. My money is on
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Furry
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I wouldn’t be surprised if a lot of democrats, especially Cali ones, have fears of losing money over this. With how aggressively the FDIC is charging forward with an auction I can’t help but feel they’ll get low balled and this will be worse than it needs to be. I guess they’ve decided it’s more important to have things working tomorrow for the insured part of accounts in order to reduce the risk of a wider panic starting.
Im not sure which path would be better tbh.
Mist
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It doesn't have the power to do it through the FDIC or in relation to FDIC insurance, but it could still do it unilaterally to shore up the banking system/dollar. It doesn't matter though, this really doesn't threaten the dollar, so moot point.
People with their hot-takes keep missing the point that the bank has actual assets, it just doesn't have short-term liquidity.
What will happen is either:
1) Another bank will buy them, problem effectively solved.
2) They will firesale the assets, and everyone above 250k will get some percentage of their deposits back, probably ~70 cents on the dollar, maybe more.
The real question is whether the FDIC will put the payroll deposits ahead of the rest of the depositors when it comes to attempting to make them whole. If the government does not make the payroll deposits whole, or as whole as possible, Ackman is right, entities will all start moving their payroll deposits out of regional banks, which will ruin them by causing more liquidity failures of regional banks, and effectively giving a tiny handful of TBTF banks a monopoly on payroll deposits. That's really the only part of Ackman's whole spiel that's true.
Sanrith Descartes
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70 cents on the dollar? really?
Silicon Valley Bank reportedly held $173 billion in deposits.
The Fed interest rate is at 4.57% and $117 billion of Silicon Valley Bank securities are yielding only 1.56-1.66%
This is the entire problem. How many of those 1.5% bonds are you going to be buying for 70 cents on the dollar? None. No one else is going to buy them for 70 cents on the dollar either. Their mark to market is dogshit because you can take the same money and buy this....
Current FDIC balance is $128b as of Dec 31st.
OU Ariakas
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I told you, he is one of us. My money is on
At least he also posted this absolutely true statement:
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Big Phoenix
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Really just shows how insanely greedy these pieces of shits are.I told you, he is one of us. My money is on
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Furry
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If you buy a 1.5% interest rate 10 year bond at 70c on the dollar, it’s the equivalent of buying a 10 year with around 5.3% interest rate. Obviously how long each bond has left and what not will effect this math some. Not what I’d invest in, but there’s plenty of reasons that places would buy them at an appropriate haircut I think.
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Sanrith Descartes
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There are rumors the WH might try to declare that a single mid-sized bank closing (which happens more often than people think) is a "systemic threat" to the entire US financial system and use this emergency provision to backstop all the deposits. It would take a 2/3rds vote of the Fed board, Yellen, and someone else to try to pull it off. And of course, its still subject to a court action.