Is the stock market going to tank?

[Mustonen]

I'm curious about the timing specifics with SVB.

When were the $25b in bonds sold leading to the $2b loss (rough numbers)? Recently like in Q1 2023? If so the earliest the market would have found out about that would have been when they filed their quarterly report unless a loss that large triggered some sort of reporting requirement.

So assuming I'm correct and that would have showed up in quarterly earnings, everyone found out about this because they were trying to raise additional capital and disclosed it in the offering?

If so that seems like a horrible, horrible sequence of events. Regardless, should have gotten the equity raise closed first and liquidated the bonds afterwards. Stock probably still takes a shit but at least you've already got the capital in to offset the losses on the bond sale and maybe that way you avoid the VC panic and therefore the bank run. Hindsight 20/20 obviously.

The thing is, selling bonds “at a loss” sounds terrible, but it’s not half as momentous or even interesting as that…. They’re all ultimately just expressions of yield over some period of time, and tuning up a troublesome net interest margin is a proactive move that probably made all kinds of sense over the next few years.

Lots of FIs are stuck with long and shitty investment portfolios because yield was nowhere to be found but deposits were flush. Hundreds of millions of dollars in your checking account earning next to nothing doesn’t scream responsible balance sheet management, so you park it somewhere, anywhere, to earn something.

$80B at 1.56% is 1.5% higher than overnight at the time, or $1.2B per year in additional earnings. It looked ok at the time. Nobody was excited about it I’m sure, but what else do you do? Pulling a quarter of that out for a $2B loss basically wipes out most of your upside from that move, but gives you a chance to grab some meaningful yields and on net over time makes sense.

Anyways, another win for subjective mass hysteria.

[4matic]

It’s a good move even if they lose some money Great way to maintain a foothold in us banking:

Hongkong and Shanghai Banking Corporation Limited
It is owned by the Hongkong and Shanghai Banking Corporation Limited, the founding member of the HSBC Group, which was established in Hong Kong and Shanghai in 1865.

[4matic]

Anybody concerned with their accounts at Ally Bank?

I have my $250k checking accounts spread out for protection.

[schuss]

It’s not just the cliche tech bros tho. Somethjng like 50% of startups had there money in svb. If they go under that will set back a lot of tech innovation which will domino into economic set backs

Peter Thiel tho has just cemented his rep as pos if that wasn’t clear before now

And most will be made whole in the coming weeks or month. Not to mention plenty of the deposits/loans are pretty high value as an in to some of the more desirable startups. I just fail to have any tears for groups that had a ton of money and failed to plan ahead or build some diligence and rigor into their practice at all.

[4matic]

Fed says mea culpa. All deposits good

[4matic]

Signature Bank goes down

[sirbumpsalot]

Anybody concerned with their accounts at Ally Bank?

https://www.morningstar.com/news/mar...ssesas-was-svb

Ally Financial Inc. (ALLY) -- the third largest bank on the list by Dec. 31 total assets -- stands out as having the largest percentage of negative accumulated comprehensive income relative to total equity capital as of Dec. 31.

FDIC insurance up to $250,000.

[JaytaeMoney]

I figured First Republic might dip into a real cheap buy this week, now I’m wondering whether they’ll survive Monday

First Republic "not surviving Monday" would take a mass panic, certainly possible but if that happens we are going to have much bigger problems than First Republic. First Republic has virtually all of their assets tied up in loans which are not subject to mark to market risk like bonds are.

To put it in perspective, First Republic has $330 million in unrealized losses in their bond portfolio. SVB had $17 billion which exceeded the total capital of the bank. Both are around $200 billion in total assets.

SVB customers were pouring deposits into First Republic by the billions on Friday. Their cost of funds is 47bps and they are going to reinvest those deposits into Fed Funds which is paying 4.75%.

[4matic]

Fed loaning money on term losses.

[4matic]

30y bond futures are down and the 10y is flat. No panic. Personally I’d like to see the dollar down more but flat is good enough.

[JimmyCarter]

First Republic "not surviving Monday" would take a mass panic. First Republic has virtually all of their assets tied up in loans which are not subject to mark to market risk like bonds are.

To put it in perspective, First Republic has $330 million in unrealized losses in their bond portfolio. SVB had $17 billion which exceeded the total capital of the bank. Both are around $200 billion in total assets.

Im aware, they’re just the ones subject to the most mass hysteria that I’ve seen so far

[huckbucket]

https://www.federalreserve.gov/releases/lbr/current/

Checks the names of the banks starting with $250B in assets and down (First Republic is there). Those are the ones to watch. Why?

https://www.forbes.com/sites/mayraro...h=3a3cd1c33432

Edit: Signature Bank on that list too at $100B

More details:

[Ted Striker]

Ha Ha

[Name Redacted]

Ha Ha

I feel like I read somewhere about a guy who did the exact opposite of what Jim Cramer advises and did really well. Or maybe it was a hindsight thing.

[Ted Striker]

I feel like I read somewhere about a guy who did the exact opposite of what Jim Cramer advises and did really well.

There's an "Inverse Cramer" ETF: SJIM

I used to do my own selective version of that with a very small amount of money, and although amusing, it wasn't lucrative. Basically made beer money.

[4matic]

2yn is down 75bp in two days.

[LongShortLong]

Fed says mea culpa. All deposits good

This is the news release I was looking for. Deposits fully guaranteed, 100% available Monday morning, and same for Signature Bank. No cost to taxpayers, and a statement about how great US banking is. Should stop any panic.
https://home.treasury.gov/news/press-releases/jy1337

[J. Barron DeJong]

https://twitter.com/chimeracoder/sta...sR_NcRK2VkCfkg

[LongShortLong]

https://twitter.com/chimeracoder/sta...sR_NcRK2VkCfkg

Maybe FDIC should clawback from the runners, and payoff losses out of that and return whats's left. Split the losses between the shareholders and the runners.

[Kevo]

This is the news release I was looking for. Deposits fully guaranteed, 100% available Monday morning, and same for Signature Bank. No cost to taxpayers, and a statement about how great US banking is. Should stop any panic.
https://home.treasury.gov/news/press-releases/jy1337

No cost to taxpayers except additional inflation. Nothing to see here. Everything is fine.

[MCS5280]

LL Bean and Costco better watch out. The Fed is taking the 100% money back guarantee to a whole new level.

[Mustonen]

No cost to taxpayers except additional inflation. Nothing to see here. Everything is fine.

How so? FDIC is ultimately backed by the taxpayer but funded like any other kind of insurance…. With insurance premiums paid by member banks. If there is an additional assessment to member banks I expect it’ll be minor. You might see additional bank fees, higher loan rates, lower deposit rates… and I guess that works it’s way into inflation eventually, but… I don’t see the inflation arrow as being particularly compelling. Ultimate FDIC losses should actually be pretty minimal over time. Probably a lot less than if this was allowed to keep spinning through the system.

[JimmyCarter]

First Republic "not surviving Monday" would take a mass panic, certainly possible but if that happens we are going to have much bigger problems than First Republic. First Republic has virtually all of their assets tied up in loans which are not subject to mark to market risk like bonds are.

To put it in perspective, First Republic has $330 million in unrealized losses in their bond portfolio. SVB had $17 billion which exceeded the total capital of the bank. Both are around $200 billion in total assets.

SVB customers were pouring deposits into First Republic by the billions on Friday. Their cost of funds is 47bps and they are going to reinvest those deposits into Fed Funds which is paying 4.75%.

[sirbumpsalot]

How so? FDIC is ultimately backed by the taxpayer but funded like any other kind of insurance…. With insurance premiums paid by member banks. If there is an additional assessment to member banks I expect it’ll be minor. You might see additional bank fees, higher loan rates, lower deposit rates… and I guess that works it’s way into inflation eventually, but… I don’t see the inflation arrow as being particularly compelling. Ultimate FDIC losses should actually be pretty minimal over time. Probably a lot less than if this was allowed to keep spinning through the system.

DIF: https://www.difxs.com/DIF/Home.aspx

[stalefish3169]

First Republic Bank
NYSE: FRC
27.08 USD −54.51 (-66.81%)today
Mar 13, 9:42 AM EDT

Boy, that escalated quickly.

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