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#13396 |
Veteran
Join Date: Feb 2012
Location: DE
Casino cash: $9765019
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Just read that FDIC has enough on the books to insure about 1.3% of ALL current US deposits or about the size of all SVB.
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#13397 |
Mod Team
Join Date: Sep 2011
Location: Valley of the hot as ****
Casino cash: $621900
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#13398 |
Veteran
Join Date: Feb 2012
Location: DE
Casino cash: $9765019
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#13399 |
Kind of a mod
Join Date: Aug 2005
Location: Donkey Land
Casino cash: $726899
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Posts: 52,212
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#13400 |
Veteran
Join Date: Feb 2012
Location: DE
Casino cash: $9765019
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#13401 | |
Why so serious?
Join Date: Dec 2016
Location: Chicago
Casino cash: $1140415
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Quote:
And guys, re: the 1.3%. You do realize that during the largest financial crisis of our lives no depositors whether insured or uninsured lost money, right? Despite several hundred bank failures? There are assets against these bank deposits. And banks are so much more heavily regulated now than they had been (though a former unnamed president watered down regulations for smaller banks). This SVB situation is super niche. They just did every stupid thing you could’ve done given their structure. Total mismanagement. |
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#13402 |
Why so serious?
Join Date: Dec 2016
Location: Chicago
Casino cash: $1140415
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#13403 |
Why so serious?
Join Date: Dec 2016
Location: Chicago
Casino cash: $1140415
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Just to take it a step further:
They have about 165bn of deposits. They also have 15bn of Federal Home Loan Bank liabilities that are collateralized and senior to those deposits. Total liabilities = 180bn. On the asset side they have have 75bn-ish of liquid securities like Treasuries, mortgage-backed securities, etc. They have 40bn-ish of cash. And then they have 75bn-ish of loans which are the murkier part and you’d have to assume a larger discount if someone were to take them off your books immediately… So let’s say 15% which gets you to 65bn.. Assets =180bn Liabilities = 180bn (75+40+65) This isn’t to say this analysis is foolproof and everyone will absolutely get fully paid out. But 1/ I bet there will be a solution found where ultimately everyone will get paid out; 2/ no one lost their entire savings; 3/ in bank restructurings in the past pre-financial crisis even 80% recovery on uninsured deposits was really low; 4/ if things don’t get fully solved beyond this weekend, I imagine there will be a bridge solution where uninsured depositors receive something like 50% of their money immediately and then more over time as the assets are disposed of. The world won’t end. |
Posts: 12,588
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#13404 | |
NFL's #1 Ermines Fan
Join Date: Jul 2001
Location: My house
Casino cash: $2018491
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Quote:
Okay, now what am I going to do with this cave and ammunition that I just bought? I can eat the pallets of canned goods, so that's not a problem.
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#13405 | |
Kind of a mod
Join Date: Aug 2005
Location: Donkey Land
Casino cash: $726899
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Quote:
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#13406 | |
Mod Team
Join Date: Sep 2011
Location: Valley of the hot as ****
Casino cash: $621900
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Quote:
I have our investments spread between Vanguard, T Rowe Price and TD Ameritrade. Our liquid cash is between US Bank and Chase. Thanks for your info on this. |
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#13407 | |
Why so serious?
Join Date: Dec 2016
Location: Chicago
Casino cash: $1140415
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Quote:
I can understand people being lazy about this in a world of zero rates. Then a bank or a money market fund were all the same thing. But now most banks are still paying maybe 1-2pct (though other banks are trying to attract deposits and paying more) while money funds are paying levels approaching 5pct. So the 1-2pct option is basically a loan to a bank where the 5pct option is a loan to the government. You receive a much better return on the latter and have significantly less risk (if you want to bring up the debt ceiling, we can discuss, but that’s a longer conversation and doesn’t remotely change this conclusion). These Silicon Valley idiots were exceptionally lazy and careless in their cash management. And that allowed SVB to operate as it did until it couldn’t. |
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#13408 |
Veteran
Join Date: Feb 2012
Location: DE
Casino cash: $9765019
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#13409 | |
Veteran
Join Date: Oct 2010
Casino cash: $5285409
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#13410 |
"You like to drink?"
Join Date: Jun 2006
Location: "I like to drink."
Casino cash: $1956869
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Chiefs 2016 Opponents: Home: JAX, TEN, NO, TB, NYJ. Away: HOU, IND, ATL, CAR, PIT Chiefs 2017 Opponents: Home: BUF, MIA, PHI, WSH, AFC North. Away: NE, NYJ, NYG, DAL, AFC South |
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