This SVB thing is just the first of many of these type of situations that will occur as the fed as no choice but to raise interest rates and hopefully fast. There are a lot of poorly run companies that have insanely high valuations out there that have not prepared themselves for a higher rate environment. Some of these companies/industries are built on the notion of zero interest rates forever and will be exposed. In fact some would say this is the intent of the fed. They need to destroy these poorly run companies and industries in order to eventually bring down inflation. What did everyone think “demand destruction” implied? A soft landing will be determined not by the loss of a SVB, but wether we have a deep recession.
OT: Stock and Investment Talk
- Thread starter RU-05
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Biden/Yellen already said no bailouts. That means no more bank failures. That means perhaps a 0.25% in two weeks to save face, but the pause will be announced soon. Inflation is gone. 5% rates is plenty high along with QT. Just gotta wait for the awful CPI math to catch up with reality.
We will see if CPI will in fact go down. I don’t think too many people have early access to the data. You may, but I don’t. SVB failure is nothing. It is a highly specialized bank that services one industry. It does not service a major part of the economy like housing. Even SVB failure is not scary. They made the mistake of buying too many long term bonds and were not hedged appropriately. They were still holding government bonds so no of the depositors will lose money. If SVB or other banks had taken the money from deposits and put it on Bitcoin at $60,000 or other bad bets (like mortgage backed securities and derivatives ala 2008) then we would have a major problem. Thanks to Frank Dodd this should not happen.
well anyone who has booked a vacation this summer or is buying things in general will tell you inflation is not gone. It is hopefully slowing, but definitely not gone.
Speaking of Barney Frank, did you see he was on the board of Signature.?
They also doubled in size in a year, right before the rise in rates. Growth of 20% in a year by a bank is a major red flag, 100% growth is grossly irresponsible
Inflation and high prices are two different things. Inflation is gone based on CPI if you use real-time shelter data. QoQ annualized data is negative. Not just under 2%, but literally negative. This is where the YoY math is heading. No, it will not be a straight line since gov'ment metrics are wonky, but the math is baked. YoY CPI headline and core will be under 3% by the end of the summer.
I did not know that. That is awesome. Politicians are all scumbags.
You initially said CPI will be down on Tuesday, not by the summer. I don’t know what is going to happen by this summer and sorry to burst your bubble but neither do you. You have said over and over again that inflation is gone, but it rose last read. My guess is that inflation will not go down until we see slowing in jobs. That’s just my guess and I am no economist.
It rose, but was still about zero QoQ annualized if you use real-time shelter data. The summer point was that even the garbage YoY CPI headline (which is dumb as hell to use for forward looking policy decisions) will be approaching goal soon.
FYI - jobs will never slow due to the worker imbalance - which the Fed can do absolutely nothing about. So, give up that dream right now.
Silicon Valley Bank signed exclusive banking deals with some clients, leaving them unable to diversify
Silicon Valley Bank required some clients to agree to exclusivity clauses, disabling them from diversifying where they held their money, SEC records show.
So they were tying……Silicon Valley Bank signed exclusive banking deals with some clients, leaving them unable to diversify
Silicon Valley Bank required some clients to agree to exclusivity clauses, disabling them from diversifying where they held their money, SEC records show.www.cnbc.com
No, I think cash management is excluded from tying regulations. There’s ‘traditional bank product’ exceptions, but also I think some logic that a bank providing credit has the right to request cash management as a means of mitigating credit risk.
Wishful thinking on GS‘s part. Maybe they are hoping that interest rates will go down so they can rescue their own Marcus bank which is probably in the same boat as SVB (I am just making that up). Why would GS release that today before they have had a chance to trade on it?
The February CPI Report May Deliver A Huge Surprise To The Market
The February CPI is expected to come on Tuesday, March 12. Analysts are looking for a 6% y/y increase in the CPI. Click here to read more.
seekingalpha.com
Sounds like we are in store for a nice drop in CPI. Energy prices absolutely tanked in Feb (eliminating the rise in Jan). Look for another flat to negative MoM print when using real-time shelter data. We are 3-4 months from the garbage CPI shelter metric catching up with reality.The February CPI Report May Deliver A Huge Surprise To The Market
The February CPI is expected to come on Tuesday, March 12. Analysts are looking for a 6% y/y increase in the CPI. Click here to read more.
that would not be legal and it was a blog that started this run, a well connected blog
so apparently, the woke initiatives of svb included (over past two months which is important due to the earnings) a ski trip for queer initiatives, creating safe spaces, working on pride month and parade, flying across the state to speak at queer events. So where was the focus on risk management? We know from her bio where it was given she barely highlighted anything about here qualifications for the position.
Also, is the gov't going to go after the executives who were selling stock and didn't stop the bonus payouts while bleeding millions each day in withdrawls?
when will these people get it; we don't care about your private lifestyle so stop shoving it down everyone's throats and just do your damn job!
Also, is the gov't going to go after the executives who were selling stock and didn't stop the bonus payouts while bleeding millions each day in withdrawls?
when will these people get it; we don't care about your private lifestyle so stop shoving it down everyone's throats and just do your damn job!
you should be banned for posting something behind a paywall and noto copying and paste! lolThe February CPI Report May Deliver A Huge Surprise To The Market
The February CPI is expected to come on Tuesday, March 12. Analysts are looking for a 6% y/y increase in the CPI. Click here to read more.
This shows how little respect the real powers have for Yellen who said the opposite 2 days ago.👍
From Yahoo Finance yesterday: "According to the highly-watched Manheim Used Vehicle Value Index (which tracks wholesale used-car prices at dealer auctions), used car prices jumped 3.7% in February compared to January of this year, which was also higher than the prior month. Manheim says the 3.7% jump in February was the largest increase for the month on record since a 4.4% rise in February 2009."
The average age of cars on the road today is now 12.2 years.
The average age of cars on the road today is now 12.2 years.
HSBC pays £1 to rescue UK arm of Silicon Valley Bank after all-night talks
British Finance Minister Jeremy Hunt on Sunday said that the government and Bank of England sought to "avoid or minimize" damage from the U.K. branch of SVB.
Stress in auto lending mkt as auto defaults rise and loan programs change. Also, the price of new cars is mind blowing imho
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FRC down 70+% in the premarket. Some of the other regionals are down double digits as well in the premarket.
FRC just got 70B of liquidity from the Fed and JPM in addition to any new facilities the fed created.
I was looking for short covering today on the regionals and it still may change course later in the day but my goodness on some of these regionals lol.
Taking funds or going to window is a huge red flag. It's why the fed made everyone take some last go round
I do remember that and was used to prevent stigma on any particular borrower.
There’s likely a lot of misinformation here. For example, I read in an article completely unrelated to the topic of wokeness that SVB is famous for hosting an annual large ski trip for CFOs (this year’s was a few weeks ago). Likely: that ski trip had a side session or panel for queer initiatives. Less likely: a second annual ski trip.
The “her” in your post worked at the Company’s UK subsidiary. She was not the company’s risk officer. Also, the bio floating around the net is specifically from a presentation related to diversity / inclusion type stuff — that’s the context, and why it doesn’t get into her actual work bio.
Many companies, especially banks (due to a history of being the ‘bad guy’), have community involvement teams to manage image and get involved with sponsorship and employee volunteering. If Macy’s goes under, are you going to blame time spent on the thanksgiving parade? It’s obviously not the core business managers working on that.
Take whatever viewpoint you want on corporations promoting these topics, but it’s likely unrelated to the failure. (1) if any large company fails today, you’ll likely find evidence of what you call wokeness; (2) businesses were failing long before this became a part of corporate lexicon.
Yes. Politicizing this is nonsense. Greed, incompetence, and hubris are bipartisan.
I think that is being sold to the public today as "the stockholders and bondholders are not being bailed out". The belief was if not a bailout, then it must mean a bail-in, but too much corporate cash on hand at stake to actually follow the rules, so the Fed & financial sector moved the goalposts & made new rules on the fly. They're really good at that.
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