OT: Stock and Investment Talk
- Thread starter RU-05
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On Thursday I shorted as many regional banks as I could using the following criteria: %of deposits that exceed FDIC insurance:
SBNY
SFBS
UMBF
FFWM
FRC
CVBF
EWBC
TCBI
ALL of these have more than 80% in uninsured deposits. Some have already come in for me Friday. A couple weren’t shortable. It’s worth a look as a quick bank run-contagion play.
SBNY
SFBS
UMBF
FFWM
FRC
CVBF
EWBC
TCBI
ALL of these have more than 80% in uninsured deposits. Some have already come in for me Friday. A couple weren’t shortable. It’s worth a look as a quick bank run-contagion play.
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LOL. No. Careless fiscal management at that financial institution caused its collapsed. That. FI gambled and lost. And watch, they'll run to the Feds seeking to make them/their depositors "whole."
Good trade. Feels a bit like meme stock short squeeze. Only difference here is that it’s a derivative play (not direct) and the government has a big stick to make sure the apes are in check.
I pray that this becomes a Wall Street Bets play or that depositors start pulling money from these banks, just to be safe. We’ll see by Tuesday.
It won’t be. That’s why I say it’s a derivative play. The apes can’t do that because they don’t have money at these places. The only way it can happen is they can scare people into doing it. Of course, the Fed can easily put a stop to it and if YouTube people are not immune to the securities fraud laws.
Silicon Valley Bank imploded in a single day. It could be just the tip of the iceberg.
It turns out getting easy money at rock-bottom interest rates can come back to bite you if you're careless. More firms are about to find that out.
markets.businessinsider.com
Sorry, truth hurts. Pretty simple stuff. Even several of the perma bears on CNBC were saying the same thing on Friday. Fed narrative will change very quickly. Perhaps on Tuesday with the new CPI print giving them cover.
Sounds like rate cuts and bond buying going to start again! Great job Fed. LOL.
Silicon Valley Bank imploded in a single day. It could be just the tip of the iceberg.
It turns out getting easy money at rock-bottom interest rates can come back to bite you if you're careless. More firms are about to find that out.
Yes, poor risk management on many fronts.
First bullet point from the article
- The Federal Reserve's prolonged period of low interest rates created many financial dislocations that are now flaring up.
Well, it’s just a thesis for a trade idea for a 1 week trade. I have trailing stops in late yesterday on all the positions. Unfortunately I didn’t cover FRC yesterday morning when it was trading down at 50. I got greedy/deer in headlights so still short. Short at $96.
But it took the Fed's actions (previous and current) to create the run and collapse of the bank. As 95 mentioned above, the Fed is boxed in. More rate increases will cause more stress and damage to the banking system. The blood will be on their hands.
Agreed - the Fed screwed up then and is continuing to screw up now. Raising rates so quickly from 0 to 5% has consequences.
Yes, I remembered what leads up to QE and I’m glad I’ve been on the sideline with cash and bonds.
Yes, congrats on having your 3%'ish on the sidelines (since you repeatedly said almost all of your money is on autopilot and in normal retirement accounts). LOL!
Hope is not a strategy. I’ll bet you that the next fed rate decision is at least 25bps
Not sure where you are getting that from. I have posted all my trades here and what I’ve been adding to my portfolio.
I would bet on 25 this meeting to save face with an indirect announcement of the pause during comments/Q&A. That's my base case as of now.
I agree the Fed will have to ease the hikes. But that doesn’t mean Silicon Valley Bank didn’t lay the groundwork for its screw up via poor portfolio management, too much tech concentration,poor customer/client base numbers.
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The Fed is a major contributor to the Failing of SVB. The bank was locked into low yield longer term treasuries and had to sell them at a loss since rates went up, to cover the run on the bank's cash. It should be a warning signal to the Fed that more regional/small banks may fail with rising rates.
Part of The Fed’s job is to deflate asset bubbles. Now that the tide has gone out on low interest rate speculation, you’ll see who has been swimming naked.
the point is to tighten financial conditions (not make FDIC middle managers put in overtime)...
my point is exactly right.
I believe the expression is : don't suck.
there's a thing about poorly run banks...... they are poorly run. Sure, ask "where were the regulators?!" and let's get those Bank Officers fined and in court...
but, again--- there's are reason we are seeing the first stresses in shitcoin and bad banks tied to vapor....
No reasonable person thought there'd actually be "zero pain" or "no landing"......... yes, it will get worse.. but eventually it will get better. It's the price we all have to pay NOW for a generation of free-money and FOMO... sucks to be us...
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This is the Moron's latest plan,God help us. He would like to tax unrealised capital gains, WTF. Go ahead and defend this $hit. https://www.msn.com/en-us/news/othe...on-before-they-ve-done-the-murder/ar-AA18tHqR
Interesting little pop late Friday (still available today Sat.)..may need to check early Monday if still available. But, seeing some 5.25-5.40% NON-CALLABLE 18-24month CDs now being offered. (e.g. CUSIP: 15987UAV0)
If Fed hikes (as I expect) these could go up even more... if the pause (as some think)- this could be a peak.
Just interesting to finally see OVER 5% with no call risk. Those had been few and far between so far this year..
So the Fed somehow forced SVB to purchase those incredibly low-interest long-term Treasuries? LOL. No. Make that "Hell No!" A financial institution doing that was either due to incompetence or arrogance, or both. You just don't put all those $ into assets at a fixed rate unless you can absorb the resulting "worse case." SVB didn't believe Fed rates could rise from 1%? And that the Fed raising rates as per monetary policy "best practices" somehow was unthinkable or improbable to SVB? Right....
Let's keep politics out of this. There's an entire board dedicated to that focus.
The Fed will have ten days to see if there are any other regional bank failure before changing the Fed rate. So the Fed can’t use interest rates to control inflation in the future? Stablecoin has $3.3 billion exposure from SVB so they probably go down.
Only on people earning more than $1M, also this will probably never pass.
I got a 5.25% 2 year non callable last week but most everything I have is 1 year or less for this exact reason where there are buying opportunities. There was a 5.4% but it as callable
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You can bet more than a few bank boards held emergency calls on Friday to determine what sort of exposure they too have in this regard. It's always never a problem until it is....
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