Deposits Not Insured
Part of what made SVB unique is its client base—the vast majority of its customer’s accounts were too big for full FDIC insurance (though recent deposit flight probably reduced the share). Waiting on the FDIC to see how many uninsured deposits are left and if they can be made whole.
Part of what made SVB unique is its client base—the vast majority of its customer’s accounts were too big for full FDIC insurance (tho recent deposit flight probably reduced the share). Waiting on the FDIC to see how many uninsured deposits are left and if they can be made whole. https://t.co/KOTcZukSnb
— Joey Politano 🏳️🌈 (@JosephPolitano) March 10, 2023
SVB Seeks Quick Savior After Regulators Shut Banking Operations
Bloomberg reports SVB Seeks Quick Savior After Regulators Shut Banking Operations
SVB Financial Group is seeking a buyer after regulators closed its Silicon Valley Bank unit, which buckled under the strain of declining deposits and losses on its securities portfolio.
A transaction might involve selling the company’s assets piecemeal or as a whole, according to a person familiar with the matter. The goal is to complete a deal by Monday, the person said, asking not to be identified discussing private matters.
The California Department of Financial Protection and Innovation said Friday said it has taken possession of Silicon Valley Bank and appointed the Federal Deposit Insurance Corp. as receiver, citing inadequate liquidity and insolvency. It was the biggest US bank failure since 2008.A transaction might involve selling the company’s assets piecemeal or as a whole, according to a person familiar with the matter. The goal is to complete a deal by Monday, the person said, asking not to be identified discussing private matters.
Asset Mix
1. Only 2.7% of SVB deposits are less than $250,000.
Meaning, 97.3% aren’t FDIC insured. pic.twitter.com/NTWu17MVmW
— Genevieve Roch-Decter, CFA (@GRDecter) March 10, 2023
A Look at Maturity
3. 47.5% of those securities are maturing in +5 years.
Again, the highest of their peer group. pic.twitter.com/csKbr4oAwE
— Genevieve Roch-Decter, CFA (@GRDecter) March 10, 2023
Not Contained
But I don’t think we have grounds for contagion like 2008.
— Genevieve Roch-Decter, CFA (@GRDecter) March 10, 2023
Not contained but not like 2008 either.
Banks are just learning that owning risk free treasury bonds is actually very risky when leveraged twenty to one. Excessively low rates for a decade led to complacency. For jollies, Put in 100 asset value and 95 debt value in my quick calculator. Watch https://t.co/kmR6fFDhNS…
— Seattle Biker (@W_Igoe) March 10, 2023
A Crypto Tie-In
Circle’s USDC, the second largest stablecoin with $43 billion market capitalization, held an undisclosed part of its $9.8 billion cash reserves at failed Silicon Valley Bank. @sndr_krisztian reportshttps://t.co/VjHfecXpDE
— CoinDesk (@CoinDesk) March 10, 2023
From Coindesk
Circle’s USDC, the second largest stablecoin with $43 billion market capitalization, held an undisclosed part of its $9.8 billion cash reserves at failed Silicon Valley Bank.
Circle last week said that it had cut ties with Silvergate Bank, the crypto-friendly bank that halted operations and said it would “voluntarily liquidate” its assets earlier this week.
Circle did not return a request for comment about the firm’s exposure to SVB and Signature Bank at press time.
USDC Price
If you are not pulling money out of USDC, you are playing with fire. Then again, where do you put it that you can trust?
Next in Line?
https://twitter.com/popjump/status/1633687594746904576
Who Knew? Someone Always Does
They obviously knew lol
— iSpy Capital (@ispytrader) March 10, 2023
Cries for a Bailout
The failure of @SVB_Financial could destroy an important long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash. If private capital can’t provide a solution, a highly dilutive gov’t preferred bailout should be considered.
— Bill Ackman (@BillAckman) March 10, 2023
How pathetic.
Bill Ackman is already talking about a tax-payer funded bailout for SVB!😂
For what?
You don’t get a govt bailout because you made a shitty MBS investment…
You just blowup. Learn from it.
— Geiger Capital (@Geiger_Capital) March 10, 2023
Government Bailout
WSJ talking to sources who say government may have to bailout SVB.
“It’s conceivable there will be no deal and that the government will have to rescue SVB, the people said.”
That’s… highly unlikely. https://t.co/jP756SelNg
— Rob Blackwell (@robblackwellAB) March 10, 2023
No Bailout
How about no bailout, zero, for anyone.
— Mike “Mish” Shedlock (@MishGEA) March 10, 2023
Now I want to see @SVB_Financial fail. Billionaire fund manager arguing for a TAXPAYER bailout. Let markets function. @SVB_Financial management made a bunch of bad decisions. They should reap the consequences. Moral hazard? https://t.co/PFRwxPqaUg
— Peter Sasaki (@PeterSasaki) March 10, 2023
Wild Success for Jim Cramer
Stepping back from today’s action, here’s an amazing success story.
Jim Cramer said Silicon Valley Bank was a buy last month at $320
Today it is being closed by California regulators pic.twitter.com/x1xMBTrQTS
— Inverse Cramer (Not Jim Cramer) (@CramerTracker) March 10, 2023
Jim Cramer Comments
- Fears Not Justified
- Very Compelling Situation
- They’re Not Going Away
- Stock Still Cheap
Those comments may make this the biggest Inverse Cramer idea in history.
Bitcoin Hammered Back Below $20,000 on Liquidity and Tax Concerns
In case you missed it, Bitcoin was also impacted by liquidity concerns.
For discussion, please see Bitcoin Hammered Back Below $20,000 on Liquidity and Tax Concerns
This post originated at MishTalk.Com.
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Mish
As I had stated once – “Watching Cramer’s show to get investment education is like watching an X-rated movie to get sex education”.