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Silicon Valley Bank - Shutdown!

WhatExit?

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The wheels started to come off on Wednesday, when SBV announced it had sold a bunch of securities at a loss and that it would sell $2.25 billion in new shares to shore up its balance sheet. That triggered a panic among key venture capital firms, who reportedly advised companies to withdraw their money from the bank.

The company’s stock cratered on Thursday, dragging other banks down with it. By Friday morning, SBV’s shares were halted and it had abandoned efforts to quickly raise capital or find a buyer. Several other bank stocks were temporarily halted Friday, including First Republic, PacWest Bancorp, and Signature Bank.

The mid-morning timing of the FDIC’s takeover was noteworthy, as the agency typically waits until the market has closed to intervene.

“SVB’s condition deteriorated so quickly that it couldn’t last just five more hours,” wrote Better Markets CEO Dennis M. Kelleher. “That’s because its depositors were withdrawing their money so fast that the bank was insolvent, and an intraday closure was unavoidable due to a classic bank run.”
 

FROGMAN524

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This blows for my very good friend. His wife is a nurse and she's pregnant, due in April. She just went down to 1 shift per week so she could go to school full time on a 3 year Nurse Practitioner program, of which she is in the first year still. They just bought two new cars and built a big house and have payments on all 3. One month ago, he left a steady job where they wanted to keep him on, making low six figures, to start at SVB as a business analyst making almost $200K and now he's probably going to be laid off in the next week or sooner.
 
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retaocleg

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fiat banking is the same, big or small...........you think FDIC has money? it does not, it is as unallocated and undercapitalized as the banks are

get your house in order, the collapse is engineered........you'll own nothing, and be happy
 

lbhsbz

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crypto banks.jpg
 

76sanger

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The Biden administration and the democrats are ecstatic over this. It helps their cause of the government backed digital currency of a "ONE central bank" digital currency they have been pushing and evaluating since I believe in March of 2022 when he signed another executive order for the research and development of this. This is so much worse than I believe any or at least most of us realize.
I hope any RDP'rs and or family and friends that get caught up in any way with this comes out OK in the end.
 

Flatsix66

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TPC

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What other Banks may this mutate to?
 

FROGMAN524

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From my buddy just now:

“they just sent an email that I don’t work for SVB anymore, I now work for the bank the fed created for the takeover. They offered 45 days guaranteed employment at 1.5x my salary. So that’s better than just being out of work next week with no money”
 

Looking Glass

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fiat banking is the same, big or small...........you think FDIC has money? it does not, it is as unallocated and undercapitalized as the banks are

get your house in order, the collapse is engineered........you'll own nothing, and be happy


People don't learn, even with a very serious Scare.
 

LargeOrangeFont

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From my buddy just now:

“they just sent an email that I don’t work for SVB anymore, I now work for the bank the fed created for the takeover. They offered 45 days guaranteed employment at 1.5x my salary. So that’s better than just being out of work next week with no money”

Good for him. At least his resume is freshly polished and he’s got a little time.
 

Roosky01

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And the vast majority of deposits are not covered by the FDIC.

Let's all hope and pray this is not the first domino...
 

brecht

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I work for a startup - 10ish people. $1m locked up today. $250k FDIC insured, rumor is another 50% will be available Monday and (forget the account type) will be reinstated at 100% (but luckily us). Let's see what happens
 

rrrr

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I believe this link gets around the WSJ paywall but I'm not sure. I have a subscription, so it's difficult to tell.


Rising interest rates have caused massive unrealized losses in banks' bond portfolios.

From the article:

The Federal Deposit Insurance Corp. in February reported that U.S. banks’ unrealized losses on available-for-sale and held-to-maturity securities totaled $620 billion as of Dec. 31, up from $8 billion a year earlier before the Fed’s rate push began.
 

Roosky01

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I’m not a banker or anything, but what about all the “unrealized” losses at all the other banks that aren’t shown on any P&L sheet?

Off to try and find the next bank to short the fuk out of…
 

DLC

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FTX had a ton of cash at Silver gate, The Fed came in a took a big chunk of that cash out of Silver gate holdings ….


That started their down fall
 

Xtrmwakeboarder

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What other Banks may this mutate to?

I can tell you firsthand that a VERY large PE fund is worried that this will affect other mid market banks and is currently scrambling their portfolio company CFOs to disclose where all the cash is held foreign and domestic
 
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motormonkey

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They were buying government bonds and got left in the dust with interest rates rising. Just like 2008, but this time it was the government bundling and selling bad debt.
Yellen will have to mint a 100T dollar coin for the treasuries and or they will start a war. If they declare a war, the law allows a open check book.
This is what happens when interest rates were held down for way to long and cheap money was to be had.
 

bowtiejunkie

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From my buddy just now:

“they just sent an email that I don’t work for SVB anymore, I now work for the bank the fed created for the takeover. They offered 45 days guaranteed employment at 1.5x my salary. So that’s better than just being out of work next week with no money”
Got the same email. Certainly better than being dump on the street. Staying positive.
 

Tank

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Good take on the bank run here.


I am beyond ignorant about all
This crap but that guy did a good job of explaining some of what’s going on. I subscribed to his channel.

So, basic breakdown of this bank shutting down is that for some reason a huge investor said to his people “get your money out of Silicon bank” which in turn forced the bank
To cash out long term investments at a loss and they couldn’t cover the withdrawals?? Is that basically what happened?

Also, dude in video said twice commercial
Market is about to get crushed. Meaning prices are gonna drop? More difficult to get funding to purchase commercial property?
I’ve been looking at commercial / industrial property for a few months with the idea of buying something. Maybe around me (though I don’t want to particularly buy in ca) or in havasu but HOLY SHIT! The commercial
Marley is STUPID high. Like worse than housing. Shit seems to have doubled over past couple years. Commercial realestate market takes a dump? I’m in. Is that what he’s saying?
 

LargeOrangeFont

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I am beyond ignorant about all
This crap but that guy did a good job of explaining some of what’s going on. I subscribed to his channel.

So, basic breakdown of this bank shutting down is that for some reason a huge investor said to his people “get your money out of Silicon bank” which in turn forced the bank
To cash out long term investments at a loss and they couldn’t cover the withdrawals?? Is that basically what happened?

Also, dude in video said twice commercial
Market is about to get crushed. Meaning prices are gonna drop? More difficult to get funding to purchase commercial property?
I’ve been looking at commercial / industrial property for a few months with the idea of buying something. Maybe around me (though I don’t want to particularly buy in ca) or in havasu but HOLY SHIT! The commercial
Marley is STUPID high. Like worse than housing. Shit seems to have doubled over past couple years. Commercial realestate market takes a dump? I’m in. Is that what he’s saying?

@DrunkenSailor had been waving the commercial market flag of distress for awhile.

That will likely be an opportunity, but you better bring cash as you know the story with rates :)
 

lf2

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Payroll processor Patriot software was using SVB is what I heard from someone
Sounds like it, i use them for payroll and got the email that all direct deposits are on hold for now. So if you had a payroll in process where they already withdrew the funds but hadnt released the direct deposits into the employees acct that money is frozen for now. Luckily my payroll isnt scheduled until next week and it says i can pay with a paper check and they will collect the tax portion once they get it figured out
 

regor

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2nd biggest bank failure in our nation’s history.

California regulars had to step in before the Fed because Janet Yellen and the rest of her clown’s in the corrupt circus don’t want to admit what they done to the nation.

Enjoy your Trumpless America......
 

JJ McClure

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Strap yore helmets on tight and hide under yore desk. Oh. And never, ever answer the phone. It’s a pissed off client on the other end.
 

adam909

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What other Banks may this mutate to?
Whats scary is who knows.. They are all drowning in the same pool.. Its a matter who can hold there breath the longest..

Best thing we can do is not keep over 250k in one bank.. Banks are going to be busy next week with people moving money around, which wont help out the problem for banks..

IF YOU HAVE OVER 250K IN YOUR BANK I WOULD BE CONCERNED.... Please do your own research and dont let me get every one running scared
 

zhandfull

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I am beyond ignorant about all
This crap but that guy did a good job of explaining some of what’s going on. I subscribed to his channel.

So, basic breakdown of this bank shutting down is that for some reason a huge investor said to his people “get your money out of Silicon bank” which in turn forced the bank
To cash out long term investments at a loss and they couldn’t cover the withdrawals?? Is that basically what happened?

Also, dude in video said twice commercial
Market is about to get crushed. Meaning prices are gonna drop? More difficult to get funding to purchase commercial property?
I’ve been looking at commercial / industrial property for a few months with the idea of buying something. Maybe around me (though I don’t want to particularly buy in ca) or in havasu but HOLY SHIT! The commercial
Marley is STUPID high. Like worse than housing. Shit seems to have doubled over past couple years. Commercial realestate market takes a dump? I’m in. Is that what he’s saying?
He puts out a lot of videos. Multiple per day. But they are all short only about 15 minutes.

I like his daily news and some of the other videos too. If I remember right, he has a masters degree in accounting. Work experience as a worldwide team manager in sales for major Silicon Valley software company. Retired early after becoming a self made millionaire investing in single family rental properties over last twenty years. Yes he sales a course online — but gives all the information away in his daily videos. Been watching him for two or three years now. His advice is spot on for rental properties. Just hard to find any that pencil out right now.
 

zhandfull

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Whats scary is who knows.. They are all drowning in the same pool.. Its a matter who can hold there breath the longest..

Best thing we can do is not keep over 250k in one bank.. Banks are going to be busy next week with people moving money around, which wont help out the problem for banks..

IF YOU HAVE OVER 250K IN YOUR BANK I WOULD BE CONCERNED.... Please do your own research and dont let me get every one running scared

Great advice!
Most average individuals probably have nothing to worry about. But for those with over 250k, they should take precautions and make sure they are protected.

A lot of average businesses have more than 250k running through a checking account on any given day. Think contractors, developers, boat manufacturers, car dealers, the list is long.
 

TPC

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Asking for a friend:
If you have more than $250K in an account(s), should you open another account(s) at the same bank or another bank and limit them all to $250K to be FDIC protected?
I think they can all be at the same bank as long as they are separate accounts.
Vote for Democrats and this is what ya get.

Bueller, Bueller,,, anyone,, anyone?:
 

TPC

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Ok, response from my CPA just this minute:

"Hi Ross. Here’s how it works these days since FDIC lowers limits 2 years ago. 250k per FDIC account, per person listed on the account. “Add a 2nd person (500k coverage), add a 3rd person (750k coverage), etc…

Applies the exact same to every FDIC institution. No concerns above 250k as long as you have others on the account. I keep my wife and 2 kids, so covered up to 1-million."
 

thetub

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Asking for a friend:
If you have more than $250K in an account(s), should you open another account(s) at the same bank or another bank and limit them all to $250K to be FDIC protected?
I think they can all be at the same bank as long as they are separate accounts.
Vote for Democrats and this is what ya get.

Bueller, Bueller,,, anyone,, anyone?:

what i heard from banker is if you add a beneficiary on the account its insured another $250.000

so you open an account add yore son on there as beny and its insured total of $500,000

dont know if this is true but banker claims yes ??
 
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Looking Glass

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Ok, response from my CPA just this minute:

"Hi Ross. Here’s how it works these days since FDIC lowers limits 2 years ago. 250k per FDIC account, per person listed on the account. “Add a 2nd person (500k coverage), add a 3rd person (750k coverage), etc…

Applies the exact same to every FDIC institution. No concerns above 250k as long as you have others on the account. I keep my wife and 2 kids, so covered up to 1-million."


UNTIL - you aren't!!🤔
 

zhandfull

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I like the service at smaller banks. I go in branch three or four times a year and they remember my name. Just blows me away every time.

Have another account at a credit union. It would be a son of a bitch if my small bank had a run on them and all my money was tied up in that one bank.

Wonder how long it would take for FDIC to make a person whole.
 

Gonefishin5555

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Stablecoin had 3.3B on deposit with SVB i read. I wonder what happens monday. I shorted some coinbase stock two weeks made a few bucks so far though it didn't really drop anymore after hours friday so maybe its stable now. Gold went up 2% friday so that tells you something.
 

530RL

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I’m a little surprised anyone would be having exposure above the 250 limit.

Many banks have a program where all amounts over 250 are swept to other FDIC insured institutions so there is no deposit risk. It’s all behind the scenes so the customer only sees his/her balance and can transact as if all is at the one bank.

Not sure why those with high cash deposits were not using such a products unless they were willing to take the risk in return for some yield on cash balances. 🤷
 
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