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Off-Topic Stock Market & Crypto Discussion

Let them fail. It’s not the taxpayers problem that these people, made a bad bet on a poorly run bank. Anything over $250k isn’t insured. They knew this beforehand. If I invest in a company and it goes under, I don’t get a bailout. I know it’s not this simple, but in reality, it actually is.
 
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90scane said:
You said pare down equity holdings yet the market could rally. Why pare down when the market could rally?
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Good question, I used my words poorly. My best guess is that short term, the market will rally on potential rate relief. Medium and longer term, the core issues are only going to get worse; overvalued market, higher rates than we are used to, inflation due to huge deficits and supply side challenges in people, food, housing and energy, etc. etc.
 
calinative umstudent said:
I get and agree with the argument of allowing the bank to fail. I'm also not saying the Government should be forced to LOSE money over this. My only opinion is that people and small businesses are about to get destroyed at absolutely zero fault of their own. I'm not saying equity holders should be saved either. Specifically my point is only about Depositors. Now at least the actions the FDIC has taken ensure that all insured deposits will be available monday, and some large percentage will be available within a couple days of that, and likely the rest in the following months as the rest of the assets are sold. I was just saying that the Government could pay SVB what the total deposits are in exchange for all the seized assets, which imo will likely end up with a profit for the government. Plus you also have to account that this could lead to the too-big-to-fail banks just become even bigger an way-too-big-to-fail....

And I would also obviously say the people running the bank should get prison time, especially since it appears several high ranking officials sold a large percentage of their stake in the company right before this collapse.
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Difference in philosophies....those depositors knew their cash was uninsured, could have bought treasuries or corporate bonds, could have diversified across institutions, etc. I also think that practically, if I am a corporate treasurer (i.e. big cash), I simply dont have it at First Republic, Nat West, etc. In other words, bank runs may well happen even if they are fully insured.
 
NC_Canes_11 said:
Let them fail. It’s not the taxpayers problem that these people, made a bad bet on a poorly run bank. Anything over $250k isn’t insured. They knew this beforehand. If I invest in a company and it goes under, I don’t get a bailout. I know it’s not this simple, but in reality, it actually is.
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Depositing money in a bank account is not the same as investing in a company. The Bank has actual investors, and nobody is saying to protect them.

 
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SpikeUM said:
Difference in philosophies....those depositors knew their cash was uninsured, could have bought treasuries or corporate bonds, could have diversified across institutions, etc. I also think that practically, if I am a corporate treasurer (i.e. big cash), I simply dont have it at First Republic, Nat West, etc. In other words, bank runs may well happen even if they are fully insured.
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So what you are saying is that NOBODY should use a non-big 4 US bank for >$250K.... You see how that is a problem if that exact mentality (the same one that led to the bank run at SVB on Friday) could lead to some major repercussions across the country, right? Every small-medium business would pull everything out asap to ensure they would have the money for payroll and everything else...
 
NC_Canes_11 said:
You’re ignoring my actual point. You are insured up to $250k. Every penny over that, might as well be an investment, bc it’s not protected.
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... Except it isn't an investment. It is fundamentally different, and has different protections and expectations. The ONLY reason SVB failed is literally because it had a panicked bank run. And once the bank run starts it has a snowballing effect. And that snowball can happen at other banks that are not arbitrarily deemed too big to fail. You're right deposits >$250k aren't 100% insured though. What you're ignoring is that SVB have the assets to cover the deposits - or at least >90% at worst. What people WANT is for the government to fund the deposits immediately or to let someone else step in and acquire the bank, because selling off all the assets could take months. All those customer deposits (even the uninsured ones) have priority over anything else. And there is a good chance one of those things will end up happening, but the communication has been very poor, which just makes more panic set in. And the worst case scenario is that panic spreads to people and businesses at other banks not federally deemed too big to fail, and they also experience a bank run.

Then you factor in that this IS literally the fault of how quickly the fed is raising rates (historically fast), and you have a very good reason people are ****ed and want some protection here. Again, nobody is wanting a bail out.
 
calinative umstudent said:
So what you are saying is that NOBODY should use a non-big 4 US bank for >$250K.... You see how that is a problem if that exact mentality (the same one that led to the bank run at SVB on Friday) could lead to some major repercussions across the country, right? Every small-medium business would pull everything out asap to ensure they would have the money for payroll and everything else...
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Lets just agree to disagree? You will likely get your wish anyway.
 
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PanteraCanes said:
So the tax payers bail out millionaires and billionaires?
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It looks like SVB has a ton of mortgage banked securities. If they had the correct amount of swaps they wouldn’t have failed or at worst would have survived for much longer.

The easy answer: let the FED absorb the MBS to fund depositors. That gets SVB pretty close and reverses QT for one month.
 
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90scane said:
It looks like SVB has a ton of mortgage banked securities. If they had the correct amount of swaps they wouldn’t have failed or at worst would have survived for much longer.

The easy answer: let the FED absorb the MBS to fund depositors. That gets SVB pretty close and reverses QT for one month.
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The larger issue is that there is as much as $1 TRILLION in MTM losses at US banks
 
SpikeUM said:
The larger issue is that there is as much as $1 TRILLION in MTM losses at US banks
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Is that all US Banks or just public ones over a specific size?

Sounds like any additional hikes increase the contagion and the longer the rates remain high the higher the likelihood of more failures AND some intervention.
 
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90scane said:
Is that all US Banks or just public ones over a specific size?

Sounds like any additional hikes increase the contagion and the longer the rates remain high the higher the likelihood of more failures AND some intervention.
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My sense is that the Fed will have to be very careful going forward, especially with QT; from Zero Hedge:

Citigroup (C) loss per share ($16.02) 33% of stock price
AFS $256,608 million cost - $249,679 million fair value = $5,929 million loss
HTM $268,863 million cost - $243,648 million fair value = $25,215 million loss
*Total loss $31,144 million
JPMorgan Chase (JPM) loss per share ($16.00) 12% of stock price
AFS $216,217 million cost - $205,857 million fair value = $10,360 million loss
HTM $425,372 million cost - $388,648 million fair value = $36,724 million loss
*Total loss $47,084 million
Signature Bank (SBNY) loss per share $51.44 73% of stock price
AFS $21,071 million cost - $18,594 million fair value = $2,477 million loss
HTM $7,780 million cost - $7,018 million fair value = $762 million loss
*Total loss $3,239 million
U.S. Bancorp (USB) loss per share $12.68 31% of stock price
AFS $81,450 million cost - $72,910 million fair value = $8,540 million loss
HTM $88,740 million cost - $77,874 million fair value = $10,866 million loss
*Total loss $19,406 million
First Republic Bank (FRC) loss per share $28.15 34% of stock price
AFS $3,817 million cost - $3,347 million fair value = $470 million loss
HTM $28,359 million cost - $23,587 million fair value = $4,772 million loss
*Total loss $5,242 million
(Special note: $27,403 million of the HTM securities mature after 10 years. Longer the maturity, the more sensitive is the bond price to changes in interest rates. In addition, $16,808 million of that number are tax-exempt municipal bonds that mature after 10 years. Munis are also often much less liquid than UST securities.)
Wells Fargo (WFC) loss per share $13.09 32% of stock price
AFS $121,725 million cost - $113,594 million fair value = $8,131 million loss
HTM $297,059 million cost - $255,521 million fair value = $41,538 million loss
*Total loss $49,669 million
Western Alliance Bancorp (WAL) loss per share $9.61 19% of stock price
AFS $7,973 million cost - $7,092 million fair value = $881 million loss
HTM $1,284 million cost - $1,112 million fair value =$172 million loss
*Total loss $1,053 million
Bank of America (BAC) loss per share $14.28 47% of stock price
AFS $225,485 million cost - $220,788 million fair value = $5,697 million loss
HTM $632,863 million cost - $524,267 million fair value = $108,596 million loss
*Total Loss $114,293 million
PacWest Bancorp (PACW) loss per share $8.25 67% of stock price
AFS $5,655 million cost - $4,843 million fair value = $812 million loss
HTM $2,271 million cost - $2,110 million fair value = $161 million loss
*Total loss $973 million
 
SpikeUM said:
My sense is that the Fed will have to be very careful going forward, especially with QT; from Zero Hedge:

Citigroup (C) loss per share ($16.02) 33% of stock price
AFS $256,608 million cost - $249,679 million fair value = $5,929 million loss
HTM $268,863 million cost - $243,648 million fair value = $25,215 million loss
*Total loss $31,144 million
JPMorgan Chase (JPM) loss per share ($16.00) 12% of stock price
AFS $216,217 million cost - $205,857 million fair value = $10,360 million loss
HTM $425,372 million cost - $388,648 million fair value = $36,724 million loss
*Total loss $47,084 million
Signature Bank (SBNY) loss per share $51.44 73% of stock price
AFS $21,071 million cost - $18,594 million fair value = $2,477 million loss
HTM $7,780 million cost - $7,018 million fair value = $762 million loss
*Total loss $3,239 million
U.S. Bancorp (USB) loss per share $12.68 31% of stock price
AFS $81,450 million cost - $72,910 million fair value = $8,540 million loss
HTM $88,740 million cost - $77,874 million fair value = $10,866 million loss
*Total loss $19,406 million
First Republic Bank (FRC) loss per share $28.15 34% of stock price
AFS $3,817 million cost - $3,347 million fair value = $470 million loss
HTM $28,359 million cost - $23,587 million fair value = $4,772 million loss
*Total loss $5,242 million
(Special note: $27,403 million of the HTM securities mature after 10 years. Longer the maturity, the more sensitive is the bond price to changes in interest rates. In addition, $16,808 million of that number are tax-exempt municipal bonds that mature after 10 years. Munis are also often much less liquid than UST securities.)
Wells Fargo (WFC) loss per share $13.09 32% of stock price
AFS $121,725 million cost - $113,594 million fair value = $8,131 million loss
HTM $297,059 million cost - $255,521 million fair value = $41,538 million loss
*Total loss $49,669 million
Western Alliance Bancorp (WAL) loss per share $9.61 19% of stock price
AFS $7,973 million cost - $7,092 million fair value = $881 million loss
HTM $1,284 million cost - $1,112 million fair value =$172 million loss
*Total loss $1,053 million
Bank of America (BAC) loss per share $14.28 47% of stock price
AFS $225,485 million cost - $220,788 million fair value = $5,697 million loss
HTM $632,863 million cost - $524,267 million fair value = $108,596 million loss
*Total Loss $114,293 million
PacWest Bancorp (PACW) loss per share $8.25 67% of stock price
AFS $5,655 million cost - $4,843 million fair value = $812 million loss
HTM $2,271 million cost - $2,110 million fair value = $161 million loss
*Total loss $973 million
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Well that doesn’t make one feel too good. Are we days to weeks or months away from the 1930s?
 
Tony4Miami said:
Anyone question why their CEO, CFO and another top executive sold millions dollars of shares end of February??
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If it was part of a 10b5-1 plan, it was scheduled a while back so probably kosher, if not, then you have a potential issue. BTW, they also paid out their 2022 bonuses on Friday.

Rule 10b5-1 allows insiders to sell company stock by setting up a predetermined plan that specifies in advance the share price, amount, and transaction date. The insider selling the stock and the broker carrying out the transaction must certify that they are not aware of any material nonpublic information (MNPI).
 
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