2nd US Bank failure!

Discussion in 'Markets & Economies' started by bretto, Mar 13, 2023.

  1. bretto

    bretto Active Member

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    A second US bank, Signature, has also collapsed after authorities announced measures to safeguard Silicon Valley Bank customers.
     
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  2. serial

    serial Well-Known Member Silver Stacker

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    "presses refresh on gold chart"
    still not 3k :(
     
  3. leo25

    leo25 Well-Known Member Silver Stacker

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    Love how these idiots claim that if only they could sell their assets at record high values then they would be fine. :D
     
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  4. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Yeh, I think there's just been a change in the breeze. I would expect the price will tack and head back in the direction it was trending.

    XAUUSD_2023-03-13_11-47-48.png
     
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  5. bretto

    bretto Active Member

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    This Bank is actually the 3rd! ...Silvergate was 2nd. not that we're counting1
    This could be bigger than a Lehman moment. Interesting times.

    Silvergate's demise was the result of a straightforward bet on cryptocurrencies, particularly large deposits and other business from crypto exchanges. FTX was one of the bank's largest customers. Silicon Valley Bank didn't bet heavy on crypto, but it mostly served tech startups in the region.
     
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  6. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Unfortunately with The Fed and Treasury's announcement that they will guarantee deposits above the FDIC's threshold limit, they're basically green-lighting risk and giving the cowboys free rein.
     
  7. serial

    serial Well-Known Member Silver Stacker

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    the money printing machines are going into overtime. Just got to finish the print run for ukraine 1st
     
  8. dozerz

    dozerz Well-Known Member Silver Stacker

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    gov just letting everyone know who is in control.
     
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  9. Michael Kay

    Michael Kay Active Member

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    They are trying to make it look that way, Yellen etc...

    So the narrative is that large banks are well-capitalised, and they will not be bailing out little guys like SVB. No more TBTF

    Systemic risk may change that. Last few months have felt a bit like early 2008, rising IR, high fuel prices, tight real estate market. History doesn't repeat, but it can echo.
     
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  10. dozerz

    dozerz Well-Known Member Silver Stacker

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    mission accomplished, close any crypto friendly bank and print money to make depositors whole, its simple.

    everyone gets the printed cash, just dont take crypto again or we close you.
     
  11. bretto

    bretto Active Member

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    Yep! And notice that every near miss or major incident, always ends up working in their favor? It's so obvious.
     
  12. Michael Kay

    Michael Kay Active Member

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    So what do you think, Shiney? Actually a third bank, Signature Bank, just went down. I know that in the past you've claimed that liquidity crises and systemic risk are a thing of the past. I guess we will see how it all stacks up soon.
     
    Last edited: Mar 13, 2023
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  13. Davros10

    Davros10 Well-Known Member Silver Stacker

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  14. florincollector54

    florincollector54 Well-Known Member

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    Will be paying close attention to what happens Monday morning in the US. I suspect there may be some people who try to transfer money (if over 250k) from some of the smaller lenders to the larger banks.
     
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  15. leo25

    leo25 Well-Known Member Silver Stacker

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    Another round of bank consolidations in play. The aim is to only have a few big guys with very tight integration. Makes the CB job a lot easier.
     
  16. hardyakkagold

    hardyakkagold Well-Known Member Silver Stacker

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    Yep, have to agree with you, there are far too many smaller banks in the USA and they want to get rid of as many of them as they can.

    It will make the implementation of the CBDC on the sheeple a much easier task.
     
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  17. Roswell Crash Survivor

    Roswell Crash Survivor Well-Known Member Silver Stacker

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    This is the Fed trying to preempt a crisis of confidence leading to bank runs, especially at smaller deposit taking institutions.

    The US banking landscape is hella fractured; thousands of small credit unions, mutual banks, saving societies etc. serving a specific local region operating on low reserves operating with almost non-profit margins.

    (From Statisisa: In 2021, there were 4,236 FDIC-insured commercial banks in the United States.)

    As for the 'moral hazard' arguments: Depositors are getting a 'bailout', not bank owners/shareholders. SVB and Signature Bank equity is still being wiped out, and most creditors to SVB & Signature will stand to lose they lent to SVB & Signature.
     
    Last edited: Mar 13, 2023
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  18. serial

    serial Well-Known Member Silver Stacker

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    This is true but shiney is also right,cowboys in the industry will see this as a green flag to continue with the poor practices that are toxic
     
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  19. florincollector54

    florincollector54 Well-Known Member

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    I tend to agree with you, although it should be noted that SVB and NY Signature Bank were very much on the inner, supporting the "right social/political causes" and public promoting their ESG policies.
     
    Last edited: Mar 13, 2023
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  20. jultorsk

    jultorsk Well-Known Member Silver Stacker

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    Fed Rate Pivot Is Back in Play
    Markets are predicting a change in the course of interest rates now that there is trouble brewing in the banking sector.

    The deal appears to be as follows: As of the time of writing, there isn’t a buyer for the whole bank (sidenote: HSBC buys SVB's UK arm). Instead, the Federal Reserve, US Treasury and Federal Deposit Insurance Corporation announced in a joint statement that all depositors will have access to their money as of Monday, and that no taxpayers’ money will be used. The statement suggests that any ultimate costs will be borne by other banks through the levy on them for deposit insurance: There will be no protection for holders of bonds or equities in the banks, and the senior management has been fired.

    Meanwhile, the Fed will introduce a new acronym, the BTFP, which stands for Bank Term Funding Program, for which $25 billion is available. This will allow banks to borrow from the Fed using Treasury bonds as collateral and valuing them par. If the problem is solely one of liquidity rather than solvency, this should make a difference; banks are sitting on a lot of bonds whose value has tanked over the last year.

    This doesn’t matter so much if they can hold them to maturity, but becomes a very big problem if they have to sell them for a loss — in such a situation the possibility of a death spiral such as UK gilts suffered last autumn would arise. If the existence of the BTFP serves to calm the banks’ clients down, it doesn’t have to commit the money; if the pressure intensifies, it might have to come up with much more than $25 billion. The effect is to ease financial conditions a bit. If all goes to plan, however, the outcome will be to make bank depositors (not just SVB’s) bear the bulk of the cost. That will ultimately be bad for banks’ profits, and therefore their shareholders.

    https://www.bloomberg.com/opinion/a...runs-into-a-defi-wall?leadSource=uverify wall
     

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