Weak, unprofitable businesses, underwritten by a political agenda. Doomed to failure whatever happens over the coming days. The stupidity knows no bounds. Next week, month, or year ought to be interesting.
Igy read this tweet storm and see if it melts your cold fury.
Hi, I’m Lindsey. A bit about me: - Ohio mother of 4 - I employ a team of 15 as a start-up founder & CEO of Strongsuit - drive a used Honda Odessey - husband works in manufacturing - The financial future of my company, team and family are at risk w/ the collapse of SVB (1/23)
Although I have to think that the Fed is locked into 25bps now no matter what CPI is....can't take the risk of more bank crashes. That could limit losses in stocks and bonds no matter what CPI is.
Nice to think we could get a 5 handle on CPI YOY, and on a month over month measurement much less than that. That will feel pretty good. Unless the financial system melts into a puddle of green goo.
Clearly others see SVB is echo chamber for liberal policies. The fact that Home Depot co-founder Bernie Marcus called SVB a woke bank is pretty spot on in my view. I find posters like you to be more inclined to be the grieved party. I am simply reporting on a significant financial event and point out WHO is pushing for a bailout, and likely WHY. Keep in mind the vast majority of these businesses are unprofitable, and likely to fail in the coming recession anyway. And, a bailout will increase inflationary tendencies.
It may be an interesting week, and certainly will remain so as we move through 2023, and beyond.
We should know more by 6:00 PM Eastern with futures trading. Apparently looking for SVB buyer and Special Purpose Vehicle to boost confidence in other regional banks. The later more critical short term.
This post was edited 1 minute after it was posted.
The worst bank failure since the global financial crisis was basically a massive Fed-driven carry trade. The bank extended its maturities to chase any yield better than zero. Then rates left zero.
this is basically true. The mistake at SVB was buying long bonds instead of short bonds. Apparently they did nothing to hedge their interest rate risk and got caught out badly.
I will say that low rates were not the fault of the Fed....rates were low because we had low inflation and massive wealth creation created a giant market for bonds with any rate.
But shocking that SVB completely ignore the risk higher rates posed to its business.
Reminds me of the financial crisis when Greenspan said something like 'I thought we didn't need to regulate the banks too much - we didn't think they were this stupid - why didn't they take care of themselves better?'
3:00pm ET Update: In a reversal of what Janet Yellen said just hours ago, WaPo reports that federal authorities are "seriously considering safeguarding all uninsured deposits at Silicon Valley Bank" - and by extension any other bank on the verge of failure - and are weighing an extraordinary intervention to prevent what they fear would be a panic in the U.S. financial system.
3:00pm ET Update: In a reversal of what Janet Yellen said just hours ago, WaPo reports that federal authorities are "seriously considering safeguarding all uninsured deposits at Silicon Valley Bank" - and by extension any other bank on the verge of failure - and are weighing an extraordinary intervention to prevent what they fear would be a panic in the U.S. financial system.
How is that a reversal? Yellen has been saying from the start that the gummint and FDIC are trying to save the depositors. I didn't see her making a distinction between insured and uninsured amounts.
3:00pm ET Update: In a reversal of what Janet Yellen said just hours ago, WaPo reports that federal authorities are "seriously considering safeguarding all uninsured deposits at Silicon Valley Bank" - and by extension any other bank on the verge of failure - and are weighing an extraordinary intervention to prevent what they fear would be a panic in the U.S. financial system.
How is that a reversal? Yellen has been saying from the start that the gummint and FDIC are trying to save the depositors. I didn't see her making a distinction between insured and uninsured amounts.
Yelled said there will be no bailout on Face the Nation. This is/will be just another bailout,
”Federal authorities are seriously considering safeguarding all uninsured deposits at Silicon Valley Bank, weighing an extraordinary intervention to prevent what they fear would be a panic in the U.S. financial system, according to three people with knowledge of the matter, who spoke on the condition of anonymity to describe private deliberations.”
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