SAJ-99
Well-known member
Just FYI, your security system can be thwarted by a package of hotdogs.
VikingsGuy
Well-known member
That's the joke in our house - the only way our labs prevent a burglary is if the burglar is injured tripping on one of their toys.
VikingsGuy
Well-known member
That is true, but the real security issue is at which amount of aggregate total receipts do I grab it all for myself and skip town?
So... SVB only had 4.5% of accounts with less than $250,000 and a normal bank that size would have 45%. One thing is for sure, the little guy isn't getting bailed out on this deal.
When the smoke clears the bank should be sold, gone. No way any management team this incompetent should survive. The shareholders will unfortunately be punished, but that is how capitalism works. You let it survive and you are seeing the future of governmental banking. It will be nothing more than a slush fund for the well connected. When mistakes get made, the tax payers will get stuck.
When the smoke clears the bank should be sold, gone. No way any management team this incompetent should survive. The shareholders will unfortunately be punished, but that is how capitalism works. You let it survive and you are seeing the future of governmental banking. It will be nothing more than a slush fund for the well connected. When mistakes get made, the tax payers will get stuck.
VikingsGuy
Well-known member
Except for the many little guys who would like their Friday payroll to clear.
what's astonishing is how many people in this country would actually be in some trouble if one, just one, pay check doesn't clear.
really that seems like one of the biggest problems in general. but alas, it is in most cases their own damn problem
noharleyyet
Well-known member
...and the declining value of their take home pay.
SAJ-99
Well-known member
The little guy is always bailed out, but as @TOGIE points out, the typically boat of the little guy is already half underwater.
The government controls all banking, directly or indirectly. That is the core of the American system (we tried it the other way, when we were a younger and more reckless, and it was a bit of a disaster). If the current structure is a concern, I have a shovel and a coffee can I can sell you.
If you think that bank was well run... good for you.
Every little community bank is benchmarked on every metric in our area quarterly. You know the big regional banks do the same thing. Its a pitiful the SVB leadership ignored the obvious and the only reason this bank is in such a quandary is because of mismanagement pure and simple. They lived by greed and will disappear because of greed. Give the depositors their money back...just force a sale of the bank so the same idiots cannot repeat the process.
And since the politician and leaders in charge don’t want follow on bank runs, they won’t let people or companies lose money. Nobody at the bank is held accountable and they know they can take more risk, get bigger bonus, and bailed out if needed.
The Federal Reserve’s emergency loan program may inject as much as $2 trillion of funds into the US banking system and ease the liquidity crunch, according to JPMorgan Chase, $JPM.
Why would up to $2T need to be injected if the banking system was healthy?
The Federal Reserve’s emergency loan program may inject as much as $2 trillion of funds into the US banking system and ease the liquidity crunch, according to JPMorgan Chase, $JPM.
Why would up to $2T need to be injected if the banking system was healthy?
BrentD
Well-known member
I think the White House clearly stated a couple of days ago that the management of the bank is to be fired. So the idiots will be on the street, presumably looking for entry level positions in the lawn care and handyman industries.
SAJ-99
Well-known member
I'm not sure you read the previous posts. My first reaction (not on HT) when this arose last week was "Someone doesn't know how to run a bank". I'm not sure it was criminal, but it was stupid. Here is a little tidbit from Bloomberg article...
SVB revealed in a 2023 proxy statement that Chief Risk Officer Laura Izurieta left the company in October but stopped performing the role in April. The company said Kim Olson took over the job in December. Olson is based in New York, across the country from most of the rest of SVB’s top brass.
The bank is gone. My only question is the legal aspect on the bankruptcy. Are the secured creditors going to get hit in favor of depositors? Roku had over $400m in cash at the bank. Yes, it has 3000 employees, so you have to think of them too. But that is equally irresponsible.
The facility allows a bank to turn the securities into cash. It's a repurchase agreement, not a helicopter money drop. It is adding liquidity to the system because depositors are freaking out...
Again, shovels and coffee cans for sale!
VikingsGuy
Well-known member
Our total outstanding US "currency" is about $21T. So telling markets the Fed is prepared to inject 10% if needed to smooth out any liquidity issues seems like sound messaging.
VikingsGuy
Well-known member
As compared to how much $$ has been created by ranchers or retailersin the last 20yrs? All net, big tech and venture tech have more than paid for themselves.
I don’t mean to sound heartless, but that is what unemployment is for.
A lot of the types of companies most affected by the SVB implosion are the same types of companies that have thumbed their noses at many “old school” fundamental business practices.
Some lessons are meant to be learned painfully.
VikingsGuy
Well-known member
Loss of previously earned wages is not at all what unemployment insurance is structured for.
Please feel to provide a list of examples - otherwise, this just seems like a small town/big city gripe - just happy to see folks in Cali get their comeuppance with few facts at hand. Banking at a large FDIC-insured bank is a fairly "old school" approach to setting up a commercial bank account.
Why should a business using an FDIC-insured bank have to learn a painful lesson about bank management? Seems very odd.
1. Loss of future wages because your company folded is. This is the professional world I come from, these are often risky places to make a living- high risk, high reward.
2. One key example that would have been quite helpful in this case: don’t keep all of your money in one bank, especially one with a poorly-diversified loan book and virtually no risk management in place.
3. FDIC protection is really low in this context. As I said, SVB had a very poorly-diversified loan book (focusing on a sector that was struggling badly as of late), I think this is what lead directly to the bank run.
The tech scene did indeed get quite high on their own supply in the past several years, watching the sector get brought back to reality in real time is interesting to say the least.
2. One key example that would have been quite helpful in this case: don’t keep all of your money in one bank, especially one with a poorly-diversified loan book and virtually no risk management in place.
3. FDIC protection is really low in this context. As I said, SVB had a very poorly-diversified loan book (focusing on a sector that was struggling badly as of late), I think this is what lead directly to the bank run.
The tech scene did indeed get quite high on their own supply in the past several years, watching the sector get brought back to reality in real time is interesting to say the least.
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longbow51
Well-known member
- Joined
- Feb 17, 2023
- Messages
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Yeah, just like Barney Frank became a plumber
VikingsGuy
Well-known member
You are right, but that was not what we were talking about and not what you said.
Not what you said - you said the customers of this bank were companies that "thumbed their noses at . . . fundamental business practices". Still waiting for your examples of such customers and they "thumbing".
I was using FDIC characterization as an example of what a reasonable depositor may view as a legitimate and regulated bank. And exactly which assets should they have held that were liquid, "safe" and had not lost paper value in the last 12 month? Only overnight paper is liquid enough for a bank run, but you can't hold all a banks assets in that form to backstop a run.
And this is the real point I believe you are making - those damn woke Cali tech guys . . . I cheer their fall . . . Not exactly the basis of sound long-term banking policy.
