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  • edited March 2023
    I am surprised this hasn’t gotten more discussion on the boards today. I can’t recall the last time I saw a component of the S@P 500 lose 60% in one trading session. Various banking indexes got hit hard today in the aftermath and a couple other west coast bank saw double digit losses. Of course SVB pales to the once size and importance of Lehman during the financial crisis. And preeminent banking analyst Mike Mayo said today with the major banks we could be much closer to a bottom. SVB continued downward in after hours trading impacting the stock futures which are looking ugly as I post this.

    On the bright side this could tempt the Fed to take its pedal off the gas. The employment report could also change things around in a hurry - or not.

  • edited March 2023
    El-Erian ***US banks can contain contagion risk and system stress stemming from the turmoil unleashed by SVB, says
    But he warns that while the US banking system "is solid as a whole... that does not mean that every bank is"

    Think most large banks performed well w last previous stress test/check ups past few yrs

    Futures flat lined
    Everyone waiting unemployment reports this morning

    Think most index crossed 200mda yesterday critical support zones.... Perhaps bounced if morning reports extremely poor and feds consider 0.25 basis points, Macd stotastics also rolled over. If no bounce perhaps sp500 3820s next support levels closing in.
  • @johnN @junkster

    What little of CNBC I watched yesterday was when Mayo was on with Scott Wapner, and they talked about financials (I didn’t know the huge financial sell-off stemmed from $SIVB)….mentioning that the largest, multinational banks have been stress-tested annually for several years, and are probably in good shape (C, BAC, WFC, JPM, etc). The banks just under that size, whether super regional or regional, have not been stress-tested. Obviously the worry is contagion.

    I have been trading ZION; it’s a conservative UT (redundant? Ha) bank that I have traded in and out of for last 18 months or so. Good dividend growth. But it was down 10-11% yesterday, so I bought more.

    Good luck to us….I’m in junkster’s camp that we’ve been in a rally since October, and that was the bear bottom….but man, all these walls of worry keep being built! Ha
  • Bank of Princeton. BPRN actually bucked the trend. Up on Thurs. by +0.3%.
  • Added SCHWAB FAS Yesterday closures... Long term holds
  • edited March 2023
    Financials got rattled b/c there was a HUGE multi-million block of Schwab shares selling early yesterday, too.

    I'm not sure there's anything major to be concerned with (yet) but if there's a new contagion/systemic risk, I bet it starts with, and spreads through, these little - or relatively unknown of - banks that'll take the most damage -- instead of the major money centers that were at the heart of the GFC. (These little banks were the ones being courted by, and supporting crypto speculation as well.)
  • edited March 2023
    Junkster said:

    I am surprised this hasn’t gotten more discussion on the boards today.

    Ditto. It came up on the Off-Topic board yesterday in a post by @Baseball_Fan - but I was the only one to make any remarks. - LINK

    No - I don’t think this is anywhere near the equivalent of Lehman. Don’t expect a repeat of ‘08 either. But depending how far the Fed decides to push its 2% inflation goal, it might get nasty. Aside from all this, the competition from higher interest rates - especially at the short end - is putting pressure on equities. And banks have to be struggling due to the inverted curve. Not to make too much of 1-day, but was surprised to see an intermediate term high yield fund I own break even yesterday. Expected worse.
  • SVB Financial/SIVB had a masterfully BAD timing. Several of its filings at Edgar/SEC showed up yesterday (see the link below) - a huge AFS* portfolio for sale, a large capital raise by issuing stock, preferreds, etc, on the day after the shutdown announcement by (unrelated) Silvergate/SI. Then the SIVB CEO was on call to its venture-capitalists (VCs) to not panic, and that if everyone panicked at the same time, that could be a problem. Well, the VCs ran away in droves.

    Banks are required to hold lots of Treasuries but can hold them at book value or initial purchase price (but not marked-to-market) in the long-term HTM portfolio that the banks may use for quick loans. They also hold securities in the short-term AWS portfolio that is marked-to-market. When there is a run on the bank, this distinction may disappear and almost everything becomes AWS (if the Fed or FHLB or somebody else doesn't step in for rescue) and huge losses ensue. Factors are also different for SI (a crypto-friendly bank) and SIVB (VC/startup-friendly bank).

    Neither SI, nor SIVB tapped the Fed Discount Window - unclear if by choice or they were turned away. Late last year, SI strangely tapped the FHLB for liquidity and that loan was suddenly called just before its recent unwind - may be it triggered the unwind.

    Twitter was buzz with both, but then it may not be mainstream media - is that CNBC?

    *AFS = available-for-sale (marked-to-market)
    HTM = Hold-to-maturity (NOT marked-to-market)
  • edited March 2023
    Heard on the radio about SVB on the way home. Radio commentator made the distinction that SVB invests in venture capital while Silvergate Capital was investing in bitcoin. Investors did not make that distinction and threw out the baby with the bathwater.
  • Looking at a 1 year trend of SIVB, the stock was dropping steadily over the year. It was already down -50% before yesterdays drop, so I'm wondering if this really was a big surprise to influential investors or they saw the last shoe drop. In comparison, SPDR® S&P Regional Banking ETF (KRE) was only down around -6% during that same time.
  • edited March 2023
    SVB halted after falling 68% in the premarket....

    WSJ: "Shares of SVB, the parent of Silicon Valley Bank, were halted due to pending news shortly after 8:30 a.m. ET, according to a web page maintained by Nasdaq that tracks stock halts. Before the halt, the company's stock tumbled 68% to around $34 on heavy volume in premarket trading.

    On Thursday, the stock plummeted 60% in its biggest one-day wipeout in history...."
  • edited March 2023
    CNBC broadcasting its attempts to raise capital have failed. It (SVB) is in talks to sell itself.
  • I have found a number of free sites that occasionally come up with something really worth reading. This is about SVB. The insiders were bailing out months ago. The chief risk officer resigned in late 2021 sold all her stock and was not replaced ( although investors were not told until 2023
  • edited March 2023
    What a day. First Republic Bank another one of those west coast banks had a low today of 45. As I post this it has almost doubled off its lows trading at 89. Looking more and more like Silicon Valley Bank is an outlier with its own specific problems. But with the weekend coming who knows what the market close has in store for us. Can’t see how this mini banking crisis can resolve itself in just one or two days.
  • edited March 2023
    Bloomberg is reportingSVB has “officially failed. FDIC has taken over.”

    Things are wild. One p/c miner I have bounced 6% this morning. Has pulled back some, although a good couple days for miners. Used the morning’s chaos to add a bit to a stock that has been taken to the woodshed this week.

    Good interview with Blackrock’s Rick Rieder plus Mohammad El-Erian before the market opened this morning (Bloomberg). I like Rieder and have a small bit in a fund he runs. Rieder refused to identify what he’s buying, commenting - “Whenever I mention something we’re buying it starts running away from me.” - :)
  • edited March 2023
    Banks stocks are like cryptos today... Pure gambling /and speculations.. Craziness

    Words on street - $sivb bank closes today, FDIC took over and may rename it and reopen monday
  • edited March 2023
    Typical FDIC intervention - close the bank on Friday, reopen on Monday under new ownership.

    Many confuse similar rescue for brokers (by SIPC) and insurance & annuity companies (by state regulators) - but those may take months or years to workout.
  • edited March 2023
    I was taught in a college communications class more than a half century ago: ”A percept is a product.” / While we can mitigate the actual significance of the failure of SVB and put it into proper perspective, the perception out there among the investing public (and perhaps some in the investment community) may be substantial.

    PS - Every teacher’s wish is that their students still remember what they were taught 50 years later.:)
  • edited March 2023
    hank said:

    I was taught in a college communications class a half century ago: ”A percept is a product” So, while we can mitigate the failure of SVB and put it into proper perspective, the perception out there among the public and some in the investment / banking industry will likely have greater ramifications.

    Great post @hank and dovetails with what I just heard on TV discussing how sentiment contagion here could be ominous. Silicon Valley Bank is not some mom and pop bank but the 16th largest in the country and the leader among funding venture capitalists.

    Edit: Schwab the large brokerage firm has also been pummeled the past two trading days.

  • WSJ says SVB just closed by regulators.

    FWIW saying, this is kind of reminding me of Friday afternoons during the early parts of the GFC....
  • So apparently this has something to do with banks having to disclose value of their HTM assets but also at fair value meaning real world what can I get for it today? So when that happens the question of net unrealized loss comes into play vs equity. And if wrong way maybe kaboom.

    I spent the morning ensuring all my assets were under the FDIC limit everywhere I had monies at several banks

    I'm wondering with all the debt valued at make believe fairy land held on private equity and in pensions what the connection contagion etc might be...

    Bad Moon rising or opportunity?

    I am considering putting in a large order for Schwab stock by eob today. Not a recommendation but my perception is they have a strong business

    Good luck to all

    Baseball fan
  • Several tweeters at Twitter are noting that closing a bank during the market hours is a rare emergency. Typically, it is done Friday afternoon AFTER the market close to reopen on Monday.
  • edited March 2023
    I spent the morning ensuring all my assets were under the FDIC limit everywhere I had monies at several banks

    Wouldn’t take me long at all …:) (But GNMAs are up)

    @Baseball_Fan - If you trade today use your fastball. The plate is moving around a lot today.
  • Hoo boy, another 'Bear' moment for Cramer....

    CNBC’s Jim Cramer urged viewers to buy Silicon Valley Bank stock last month

    (admittedly not exactly a 1:1 comparison, but close enough to cause a firestorm)

  • @hank. Ha! For sure. Crazy days

    True story. I was online earlier this week looking at JM bullion at bars of gold. Thinking about it, no action yet

    Best regards

    Baseball fan
  • Hopefully we all know or understand that holding bonds or CDs of various types can easily lead to a capital loss if we are required to sell those types of instruments before maturity, and if their value has meanwhile deteriorated due to overall financial market conditions.

    But I had never given any thought to the possibility of potential bank losses when they have parked substantial amounts of their money in "ultra safe" US Treasuries. An article in this morning's WSJ pointed out that banks are potentially in the same situation as we are.

    A bank such as Silicon Valley Bank can have a significant amount of their capital in short-term "safe" Treasuries, but if they are faced with an unexpected run on their deposits, they can be forced to sell those Treasuries before maturity, and at a loss.

    So even a reasonably run bank can get into trouble. In the case of Silicon Valley Bank, evidently a significant number of demand deposits are/were well in excess of the 250k FDIC protection, so when things got shaky a number of large depositors were very quick to attempt to withdraw very substantial amounts of the bank's deposits.

    I suppose that there's a "lesson" of some sort to all of this, but I'm damned if I know what it is. Forget banks, use mattresses or a box buried in your backyard?

  • edited March 2023
    Do business with solid institutions. We don't have to try out anyone's latest innovation or gimmick in matters of money. Although SVB was 50 years old? its hard to know in these situations. but explains why JPM is up 2.5% today. when in trouble, everyone goes to papa.
  • edited March 2023

    True story. I was online earlier this week looking at JM bullion at bars of gold. Thinking about it, no action yet

    RE JM Bullion Bars - They are pretty. Many, many years ago I owned a bunch. Silver’s very streaky. It was actually a silver miner I mentioned this morning that bounced 6% out of the gate. But p/ms are a wild ride. It is quite interesting that the bank fiasco seems to have sparked them.

    Speculators are banking on (perhaps a poor choice of words) the grinches at the Fed Reserve backing off on the tightening.

    EDIT - Sorry at Baseball_Fan / I mistook the JM bars you mentioned to be silver at first. That’s what I owned years ago. Gold will cost you a pretty penny.:)
  • edited March 2023
    ***Only 2.7% of Silicon Valley Bank deposits are less than $250,000.

    Meaning, 97.3% aren't FDIC insured.****

    Does that mean folks has >250k in cd @ Sivb are f%%%%%cked since Fdic only allow max 250k?

    What happened to the cd at bears Stearns or Lehman Brothers... Anyone remember???? Did folks recoup the losses
  • edited March 2023
    a big bank can take over all the deposits among other assets and thus make deposit holders whole. Indymac deposit holders lost. but other banks deposit holders were ok. requires a JPM type bank to step in and get paid for taking care of the mess. Let's see over the weekend.
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