And now for something really important...SVB failure.

Did you really say that ?

Your post is close to incompetent. I can't say "if you say so".

Because that would be incorrect Originally Posted by VitaMan

given what you don't know about banks, don't try to start one.

Did you really say that ?

Your post is close to incompetent Originally Posted by VitaMan

Did you really quote him twice and still ask?

Did you really quote him twice and still ask?

Originally Posted by eccieuser9500

he did which makes him wrong twice in one post.


brilliant!

I heard the real reason. They had loaned the failing trup org huge money. Really huge so much money. Big money

The loan was approved based on the trup org financial statements. They were expecting trumpy's owners to bail them out again. Saudi putin and China said oh hell no. We already paid for those classified documents fucking moron

That's what I heard on a cable news station

given what you don't know about banks, don't try to start one. Originally Posted by The_Waco_Kid

You don't know what I don't know.

You don't know what I don't know. Originally Posted by VitaMan

you don't know what you don't know.


bahahahhaaaaaa

Still just living on the lies megas. Maybe someday you will find an actual fact.

But you wouldn't know what to do with it
Bahbahbitesuk...

you don't know what you don't know.


bahahahhaaaaaa Originally Posted by The_Waco_Kid

I know you have 30,059 posts. What I don't know is how many of them only say "if you say so".

Do you know ?

I know you have 30,059 posts. What I don't know is how many of them only say "if you say so".

Do you know ? Originally Posted by VitaMan

if you say so

It is right there in the counter. I don't have to say so. You can even call it a fact.

To try and get you to make at least 1 comment relevant to the topic, do you know how much SVB stock is worth ?

I wonder how many other financial institutions are in similar shape? The 620 billion in unrealized losses in Gruenberg's statement exceed the banks' net income in 2021 ($279 billion) and 2022 ($263 billion) combined. So they're pretty darn significant. Originally Posted by Tiny

I think there may be reasons that $620 billion figure for unrealized losses is not as big a problem as it might sound, but here is a widely read article that appeared in Marketwatch on Friday:

https://www.marketwatch.com/story/20...s-svb-c4bbcafa

Bank stocks in general will probably take another big hit when the market opens this morning. It will be interesting to see if the 20 institutions mentioned by Moneywatch get whacked more than their peers.

i did and Tucker Carlson explained it to you






No. what will be talked about is how SVB with it's list of A level Corporate money and A list high net worth private investors mismanaged their holdings resulting in a 4 billion cash shortfall when called in caused them to collapse.



invest woke, go broke. Originally Posted by The_Waco_Kid

Just a partisan propagandist. That's all.




I love this fuckin' scene. The intensity and cool nature of Jeremy Irons.

I think there may be reasons that $620 billion figure for unrealized losses is not as big a problem as it might sound, but here is a widely read article that appeared in Marketwatch on Friday:

https://www.marketwatch.com/story/20...s-svb-c4bbcafa

Bank stocks in general will probably take another big hit when the market opens this morning. It will be interesting to see if the 20 institutions mentioned by Moneywatch get whacked more than their peers. Originally Posted by lustylad

Hi LustyLad, There's a distinction in the way available-for-sale (AFS) securities and held-to-maturity (HTM) securities are treated. The AFS securities are carried at fair value on the books of the banks. On SVB’s balance sheet (12/31/2022), the AFS securities have been marked down from 28.6 billion cost to 26.0 billion fair value (2.6 billion loss). However, the HTM securities are carried at cost on the balance sheet, with no adjustment for change in fair value. As I noted in a previous post, they're valued at 91.3 billion on the balance sheet, but fair value is 76.2 billion (15.1 billion unrealized loss).

SVB’s statement of comprehensive income includes no item corresponding to an unrealized loss from the HTM securities.

As Texas Contrarian said, the unrealized loss on the HTM securities does not appear on the income statement and is not reflected in the balance sheet of SVB.

Anyway, from the first paragraph above, please note that SVB is sitting on 2.6 billion in losses in AFS securities they still own, which have indeed been included in "Accumulated Other Comprehensive Income" (AOCI), the balance sheet metric that Market Watch is following. But the much-larger fair value difference for the HTM securities, 15.1 billion, is not reflected in AOCI, at least for SVB.

If other banks also have much larger unrealized losses in their HTM's compared to their AFS's, then the problem is much bigger than you'd think from MarketWatch's list. And actually Market Watch's second list is pretty concerning on its own. I don’t take a lot of comfort knowing that AOCI is added back to equity for the purposes of determining regulatory capital adequacy.

That said, if you're going to consider unrealized losses from HTM securities, then you should consider unrealized gains from the change in fair value of longer term deposits, say for example 5 year CD's that are only paying 2% annual interest. The problem though is that most or all of these banks are going to have more longer term interest bearing assets (fixed rate loans and securities) than interest bearing liabilities (long term CD's). Which highlights TC's point -- interest rate hedging is a really good idea.

Just a partisan propagandist. That's all.

I love this fuckin' scene. The intensity and cool nature of Jeremy Irons.

Originally Posted by eccieuser9500

amusing. yer gayboy Cohen is an idiot. always with the far left it's "Republicans caused this!" with massive deregulation. didn't happen. there was no massive regulatory rollback on banks. blame Trump? this guy has a bronze TDS Cobb up his ass. Cohen is completely wrong, as usual, for spewing far left nonsense claiming it would have prevented this collapse.



the reality is that SVB is a boutique bank not open to average joe customers and they put all their eggs in one high risk game .. venture capitol. a notoriously high risk low profit game. oh they make bank when they fund the next google, but the other nine ventures of ten fail. most startups fail. does this idiot Cohen think regulation would have prevented this? over time 90% of startups fail. how's Cohen going to stop that with regulations?



what a idiot.

My take on this is that the biggest reason for SVB's sudden blowup was an almost complete lack of the sort of risk management practiced by almost all banks.

Post-GFC, regulators have required banks to hold high quality liquid assets (HQLA) in sufficient quantity as to have the ability to meet a stressed outflow of deposits and to meet a required liquidity coverage ratio. These assets can be Treasury notes, MBSs, or even high-quality corporate bonds.

But here's the interesting thing, and from what I have seen so far, I'm not sure it's been well covered in the financial press.

HQLA can be booked under either Available for Sale (AFS) or Held to Maturity (HTM) accounting regimes.

AFS unrealized losses don't appear in the bank's P&L, but do show up in the capital accounts.

But booking the assets in an HTM regime prevents them from showing up at all! Convenient for those who want to delay the day of reckoning, isn't it?

This appears to be exactly what SVB did, at least to a large extent.

Further, it appears that SVB didn't hedge its asset portfolio against interest rate risk at all! Banks generally do this with interest rate swaps and any of several other types of derivative assets, thus reducing the risk of facing crises with tanking bond portfolio market values. Originally Posted by Texas Contrarian

Thanks for your insights. I share your dismay at the way SVB has blown up despite all the new rules and stress tests ushered in by the Dodd Frank Act in the aftermath of the 2008/09 Great Recession.

A few thoughts, prefaced by the caveat that I haven't been following developments in the banking industry as closely as I did a decade or so ago:

Remember when Hank Paulson was in charge at Treasury? He was gung-ho about forcing banks to mark their portfolios to market daily. Of course, be came from Goldman Sachs and was used to the financial discipline imposed by MTM rules.

Back then, the problem involved subprime mortgages, MBS and CDOs. That stuff was sitting on everyone's balance sheets. Many of those securities were unique, even esoteric. When trading dried up, there were no readily available market prices to mark to. In many cases, the market overshot. When trades did occur, they were at deeply discounted prices - even for highly rated bonds that continued to perform fully (i.e. to pay all required interest on time to the holder).

As I recall, the banks kept announcing huge quarterly paper losses, rattling the financial markets and deepening the crisis. It wasn't until Tim Geithner took over at Treasury that some of those mark-to-market rules were suspended in Q2 2009 - which was also when our financial markets finally bottomed out (not coincidentally IMO).

Maybe someone can look up the details of what MTM rules were actually suspended back in 2009, and how those rules have evolved since then.

There has long been a difference in the required treatment of AFS (available for sale) versus HTM (held to maturity) securities, and for good reasons. One thing missing from this discussion is - to what degree were assets and liabilities at SVB mismatched? If a bank offers 2% interest on a 5-year CD, then turns around and invests it in a 5-year bond yielding 4% - that's match funding by maturity, to lock in a 2% net interest income stream for 5 years. You wouldn't want that bond to be marked to market at all.

One big difference between 2009 and now is that the securities involved today are more liquid and of higher quality. US Treasury markets are the most liquid in the world. No problem finding an instantaneous price quotation if you want to mark to market. The unrealized losses are mostly the result of the Fed-engineered upsurge in market interest rates and have little or nothing to do with credit concerns or downgrades. But yeah, Tiny is right - wtf were they doing pushing so much into longer maturities, instead of staying in stable, liquid short-term treasuries?

And yeah, TC is right to ask why the fuck weren't they making smarter use of interest-rate swaps and derivatives? If you are funding a long-term asset with a short-term liability that keeps repricing at a higher & higher rate, then you should swap it into a fixed-rate liability with the same maturity as the asset being funded! The swap market is relatively cheap and easy to use for purposes like that.

I need to read up more on this. Not sure how relevant my observations are but I thought I would share them anyway.