“The taxholders won’t carry the burden”

[Dave Taylor]

I bet! https://amp.cnn.com/cnn/2023/03/12/investing/svb-customer-bailout/index.html why would we even have an FDIC if the government is jist going to bail them out anyways? Let them fail. This just produces more irresponsible bank executives willing to gamble with the working class people’s money.

 

[Bike N Gear]

I bet! https://amp.cnn.com/cnn/2023/03/12/investing/svb-customer-bailout/index.html why would we even have an FDIC if the government is jist going to bail them out anyways? Let them fail. This just produces more irresponsible bank executives willing to gamble with the working class people’s money.

What about these working class people who might lose all their money? Or the businesses that did nothing wrong, but will be forced to close? Or their employees who will lose their jobs?

Maybe, bail them out. Hang all the bank exec's and then move on.

 

[MadisonDan]

Tell me you don't know what would happen without telling me you don't have a clue.

 

[Patrick]

The collapse is a result of cash flow issues, not a Ponzi scheme or Uncle Billy losing a day's deposit.

A bad balance sheet because of those ultra low rate treasuries had depositors make a bank run.

So Dave was right! Eventually all that cheap money was going to cause a problem at some point.....

Government is providing enough float and will use whatever leverage they have to keep the large customers from pulling money.

 

[Dave Taylor]

The collapse is a result of cash flow issues, not a Ponzi scheme or Uncle Billy losing a day's deposit.

A bad balance sheet because of those ultra low rate treasuries had depositors make a bank run.

So Dave was right! Eventually all that cheap money was going to cause a problem at some point.....

Government is providing enough float and will use whatever leverage they have to keep the large customers from pulling money.

 

[Dave Taylor]

Bottom is is they fired their risk management guy a long time ago and then said oh crap and hired one in January once they knew they were fucked. Same reason I feel the way I do about financial advisors. They aee right u til their not but then it’s bot their fault.

 

[Dave Taylor]

The collapse is a result of cash flow issues, not a Ponzi scheme or Uncle Billy losing a day's deposit.

A bad balance sheet because of those ultra low rate treasuries had depositors make a bank run.

So Dave was right! Eventually all that cheap money was going to cause a problem at some point.....

Government is providing enough float and will use whatever leverage they have to keep the large customers from pulling money.

Now we go all Japan unless Powell has balls to stick the course. I see 50bps this month but then 25 next time and then we go print print print because the system broke.

 

[SmooveP]

The government is not bailing out the bank, just the customers who aren't covered. FDIC only covers $250k per customer. I'm pretty sure the govt is doing this to calm people down so things don't snowball. SVB is not the only bank with significant exposure related to their bond holdings. Hard to feel sorry for the banks. They had years of getting nearly free money thanks to the Fed. Maybe they should have squirrelled away more of the money they made. You'd think that with all of the high-powered expertise they have that they'd be better equipped to see things like this coming.

 

[soundz]

Are they bailing out customers who had their funds in the stock market? What exactly are "deposits"? What happens to your 401k if Schwab or similar goes under?

I hedged mid-last week by getting into stuff like SQQQ and holding cash. Looks like it might pay off.

 

[MadisonDan]

Are they bailing out customers who had their funds in the stock market? What exactly are "deposits"? What happens to your 401k if Schwab or similar goes under?

I hedged mid-last week by getting into stuff like SQQQ and holding cash. Looks like it might pay off.

Deposits are cash.. like your checking/savings account.
The stock is $0. Anyone who owns the stock gets nothing.
Your 401k probably holds mutual funds. Those mutual funds are still there, typically held at a custodian I think.

 

[soundz]

Deposits are cash.. like your checking/savings account.
The stock is $0. Anyone who owns the stock gets nothing.
Your 401k probably holds mutual funds. Those mutual funds are still there, typically held at a custodian I think.

I don't mean the SVB stock. Like let's say ROKU has $50 million they deposited at SVB, they're probably not holding that all in cash, no? I've gotta think part of that $50 mil has to be invested in the stock market.

 

[JimN]

Like let's say ROKU has $50 million they deposited at SVB

Roku has $487 million at SVB.

 

[Dave Taylor]

I don't mean the SVB stock. Like let's say ROKU has $50 million they deposited at SVB, they're probably not holding that all in cash, no? I've gotta think part of that $50 mil has to be invested in the stock market.

They had $497 million there btw 😬

 

[JimN]

They had $497 million there btw 😬

Not that it really matters, but:

Inline XBRL Viewer

www.sec.gov

"The Company has total cash and cash equivalents of approximately $1.9 billion as of March 10, 2023. Approximately $487 million is held at SVB, which represents approximately 26% of the Company’s cash and cash equivalents balance as of March 10, 2023. Approximately $1.4 billion of the Company’s cash and cash equivalents is distributed across multiple large financial institutions. The Company’s deposits with SVB are largely uninsured. At this time, the Company does not know to what extent the Company will be able to recover its cash on deposit at SVB."

 

[Dave Taylor]

I personally think it’s stupid to do all these bailouts. So what, nothing can fail now? I thought the whole thing behind the GFC was bailing them out but regulating more to prevent it happening again. I’m no financial but when a professional banker and risk manager can’t diversify enough to keep a $50 billion bank from losing everything wtf are we doing here? No diversity to limit risk? This bank went insolvent in one fucking day because of idiot bankers.

 

[Dave Taylor]

Not that it really matters, but:

Inline XBRL Viewer

www.sec.gov

"The Company has total cash and cash equivalents of approximately $1.9 billion as of March 10, 2023. Approximately $487 million is held at SVB, which represents approximately 26% of the Company’s cash and cash equivalents balance as of March 10, 2023. Approximately $1.4 billion of the Company’s cash and cash equivalents is distributed across multiple large financial institutions. The Company’s deposits with SVB are largely uninsured. At this time, the Company does not know to what extent the Company will be able to recover its cash on deposit at SVB."

My bad, didn’t see your post. Only one larger depositer there from what I recall.

 

[soundz]

Getting back to my question, what is the gov't going to consider "cash equivalents"? Could be huge difference in bailout numbers vs letting it go to bankruptcy court or similar. I think things are still unclear.

 

[Dave Taylor]

Not that it really matters, but:

Inline XBRL Viewer

www.sec.gov

"The Company has total cash and cash equivalents of approximately $1.9 billion as of March 10, 2023. Approximately $487 million is held at SVB, which represents approximately 26% of the Company’s cash and cash equivalents balance as of March 10, 2023. Approximately $1.4 billion of the Company’s cash and cash equivalents is distributed across multiple large financial institutions. The Company’s deposits with SVB are largely uninsured. At this time, the Company does not know to what extent the Company will be able to recover its cash on deposit at SVB."

 

[JimN]

^ That's wild. I've never heard of Circle, but I was not surprised to google it and learn it's crypto.

 

[Dave Taylor]

^ That's wild. I've never heard of Circle, but I was not surprised to google it and learn it's crypto.

Remember Jerome Kerviel?