The criticism that SVB is too “woke” is really the most stupid criticism I’ve ever seen. Like what does that even mean? I have never heard a thing about the loans SVB itself originated. Nobody has come forward with evidence that they are bad loans.
The thing that did them in was exactly the opposite, that deposit money came in too fast and they didn’t have enough loans to make use of it. So they went YOLO on long dated Treasury and Agency papers. Their held-to-maturity securities went up 700% in two years. So after Fed hiked 450bps in less than a year their assets went seriously underwater.
SVB also served mostly businesses that can move money in lightening speed. 42B went out in 24 hours. No banks can survive that kind of outflow without government support.
I have insider info that they were turning down legitimate business and dumping money to their preferred woke charities. Aka money loosing woke dogs. Make money and give money to charity. Don’t destroy a good business to make politicians feel good. They fact that the Democrats bailed them out stinks even more. What about bailing out all the small businesses that were destroyed by Newsom and Biden with the Covid shutdowns
Wait a minute. I heard many conservative complained Biden gave too much money out for Covid and that was why we have high inflation.
But now Biden actually gave too little out?
Which is it?
Not sure SVB is bailed out when its equity and bond went to zero and executives likely face years of lawsuits. Are you saying we should just let it fail like Lehman? Just to own the libs?
They wouldn’t have needed to bailout anyone if they hadn’t panicked and forced the shutdown. I still have tenants that owe me money. No one bailed me out.
The far left and the far right all got mad at “government bailouts” but do people know how much the big bad TARP program cost taxpayers?
In total, U.S. government economic bailouts related to the global financial crisis had federal outflows (expenditures, loans, and investments) of $633.6 billion and inflows (funds returned to the Treasury as interest, dividends, fees, or stock warrant repurchases) of $754.8 billion, for a net profit of $121 billion.
That’s right. Taxpayers actually made money on TARP.
Imagine saying we should just let the world burn down because something something is too woke.
TARP as a loan, forced down the throats of many healthy banks because the Fed didn’t want people to know who was in trouble. I’m not sure this is the same.
Are you actually struggling to understand the difference between giving individuals money and giving small businesses money? Small businesses only received money if it was used for payroll, so it was a pass through for individuals.
It’s not just conservatives that say the Covid money caused inflation. Any reasonable source will admit that it at least contributed to inflation and made it worse.
The biggest problem out of all of this? Both in 2008 and 2023, zero persons within the circle of failure were or will ever be “perp walked” into a courtroom and charged for their criminal activities.
Had 2008 bad actors been neatly fitted with an orange jumpsuit and shackles, I dare say SVB’s failure would likely not have ever occurred. This is simply another example of Proverbs 26, vs 11-12
Banks have specialties. SVB also have a lot of wineries clients, not to mention startups. Are they also bad loans?
These business loans SVB originated themselves are 1) tiny compared to their overall loan portfolio, and most importantly 2) likely on floating interest rate. The thing that did them in is their fixed rate long dated papers. They sold 22B worth of those papers at big loss ONE DAY before the bank run started. I’d point my finger at that instead of some vague culture war nonsense.
Nobody has convinced anyone of anything on this forum. We are here just to vent. As far as SVB they just had bad management. Their stupidity affected my bank First Republic. I with my money
Still they are good. Wall street creates all rumors faster, creating panic - even for Schwab - with nice shorting stocks etc.
This the right time to enter bank stocks. Wait and watch, in few days after ( or May 14-15th) you will hear how much warren buffet bought bank stocks, but he picks very big banks for his stability.
Last qtr he added cash from $105B to $128B, waiting for such a dip!
“Credit Risks
• Because of the credit profile of our loan porolio, our levels of nonperforming assets and charge-offs can be volale, and we may need to make material provisions for credit losses in any period.
• Our ACL is determined based upon both objecve and subjecve factors, and may not be adequate to absorb any actual credit losses.
• The borrowing needs of our clients have been and may connue to be unpredictable, especially during a challenging economic environment. We may not be able to meet our unfunded credit commitments, or adequately reserve for losses, which could have a material adverse effect.”
Yup, nothing to see here just keep moving along. Everything was fine.
Yup, every bank will have similar legal boilerplates on their annual report. The audited nonperforming number is what you should pay attention to. Not some hand wavey completely made up “woke” loan losses.
Knox asked a shallow question. The right question is did insurance companies also do away with interest rate hedges. Also, AFAIK, only banks can do leverage lending (fractional reserve banking).
Btw, institutions park their cash in T. No need to ask.
moons ago.
