The SVB Collapse/The Roaring 20's

[Stooo]

So meh, a bank in the US has failed but Leham Bros did and we got over it apart from the massive worldwide recession that is still banging around, difference is that Lehams was an investment bank while SVB is a commercial bank which means that it's not just investors that get burned it's every business with an account there. The model is built on Govt Bonds and a predictable return over time and after the huge investments when money was cheap on the international markets a couple of years ago the returns on the bonds were less attractive and sold at a loss to ensure liquidity. Meanwhile VC's like Peter Thiel were urging investors to withdraw because the start up companies that used SVB would be providing less of a return and there was a run on the bank yesterday. This has now caused issues with UK assets let alone EU and other holdings.

Go back 100 years to a world ravaged by war and a recent pandemic with the rise of totalitarianism and possible total war while the arse drops out of the economy and add in rapid climate change and here we are, got any gin?

[Holly]

Looks like SVB has been bailed out...lucky for all those millionaires, eh?

I wonder if they'd do it for banks where the ordinary Joe bloke banks.

https://www.usatoday.com/story/news/pol ... 463729002/

[HobbitFeet]

Looks like SVB has been bailed out...lucky for all those millionaires, eh?

I wonder if they'd do it for banks where the ordinary Joe bloke banks.

https://www.usatoday.com/story/news/pol ... 463729002/

wonder no more

https://money.cnn.com/news/specials/sto ... nkbailout/

Bailed out banks
The Treasury Department has invested about $200 billion in hundreds of banks through its Capital Purchase Program in an effort to prop up capital and support new lending. Here's a list of the banks that got bailed out.

[Holly]

Looks like SVB has been bailed out...lucky for all those millionaires, eh?

I wonder if they'd do it for banks where the ordinary Joe bloke banks.

https://www.usatoday.com/story/news/pol ... 463729002/

wonder no more

https://money.cnn.com/news/specials/sto ... nkbailout/

Bailed out banks
The Treasury Department has invested about $200 billion in hundreds of banks through its Capital Purchase Program in an effort to prop up capital and support new lending. Here's a list of the banks that got bailed out.

Thanks, what a fountain of knowledge you are , I can now sleep well and wonder no more. Still, I'm glad SV's millionaires won't lose their hard earned money. It really worried me.

[Cactus Jack]

Looks like SVB has been bailed out...lucky for all those millionaires, eh?

I wonder if they'd do it for banks where the ordinary Joe bloke banks.

https://www.usatoday.com/story/news/pol ... 463729002/

They will - one of the things learned in 2008 was that depositors money needs to be protected.

However investors in SVB will not be compensated - investors put their money at risk and depositors don't is a general rule that applies and some regulation has been required to enforce it.

The other thing learned was that financial institutions needed to undergo 'stress tests' to ensure they weren't making risky investments that placed the banks at unnecessary risk, to which end the Dodd Frank Act was passed in 2010.

Unfortunately in 2018 Economic Growth, Regulatory Relief and Consumer Protection Act exempting dozens of U.S. banks under a $250 billion asset threshold from the Dodd–Frank Act's banking regulations was passed thus enabling the behaviours that led to the collapse of SVB

[Stooo]

Looks like SVB has been bailed out...lucky for all those millionaires, eh?

I wonder if they'd do it for banks where the ordinary Joe bloke banks.

https://www.usatoday.com/story/news/pol ... 463729002/

They will - one of the things learned in 2008 was that depositors money needs to be protected.

However investors in SVB will not be compensated - investors put their money at risk and depositors don't is a general rule that applies and some regulation has been required to enforce it.

The other thing learned was that financial institutions needed to undergo 'stress tests' to ensure they weren't making risky investments that placed the banks at unnecessary risk, to which end the Dodd Frank Act was passed in 2010.

Unfortunately in 2018 Economic Growth, Regulatory Relief and Consumer Protection Act exempting dozens of U.S. banks under a $250 billion asset threshold from the Dodd–Frank Act's banking regulations was passed thus enabling the behaviours that led to the collapse of SVB

The stupid thing is that there was no loss to capital due to the bonds but Thiel wanted to stir the water for some reason.