Quote (dro94 @ Mar 13 2023 11:52am)

Hold on...are you talking about corporates being over leveraged or consumers?

SVB's clients were corporate. Most of the business banks do is with corporates.

Consumers still have excess savings from the pandemic, it's saved us from a recession until now, if they run out then we'll have a small recession. Still, it's the most anticipated and priced-in recession in history that we've been talking about for two years and most businesses have adjusted their behaviour for already.

Quote (thesnipa @ Mar 13 2023 12:45pm)

= U DIE. unless ur garden has progressed a LOT since we last talked. .

Quote (thesnipa @ Mar 13 2023 01:10pm)

I'm talking about just about every category of loans in the whole US. Auto, mortgage, business, student debt, credit cards, etc.

There is too much debt and they are going to fail 1 by 1. but hey, as i stated, i'd LOVE to be wrong.

Quote (NetflixAdaptationWidow @ Mar 13 2023 01:51pm)

Auto has been popping for about 6 months.

Mortgage will be resilient until we hit 50% price drop AND a high unemployment. The former is all but guaranteed but the latter isn't due to the extreme demand for labor because of the high retirement rate.

A commercial real estate bubble has been building for a while. I posted about it about 2 years ago.

Quote (RedFromWinter @ Mar 13 2023 02:04pm)

Who is holding the bag on real estate? Seen a few local properties sell at loss at secondary auction. Meaning a bank bought it at county sheriff auction, then auctioned it again for less. Wonder how many properties are going this way or primed to go this way? And how that in aggregate will factor into the bigger picture. We down about 10pcnt from peaks in my region, and the dump/junk unlivable ones sit.

Quote

And so if you were the Bank of Startups, just like if you were the Bank of Crypto, it turned out that you had made a huge concentrated bet on interest rates. Your customers were flush with cash, so they gave you all that cash, but they didn’t need loans so you invested all that cash in longer-dated fixed-income securities, which lost value when rates went up. But also, when rates went up, your customers all got smoked, because it turned out that they were creatures of low interest rates, and in a higher-interest-rate environment they didn’t have money anymore. So they withdrew their deposits, so you had to sell those securities at a loss to pay them back. Now you have lost money and look financially shaky, so customers get spooked and withdraw more money, so you sell more securities, so you book more losses, oops oops oops

Quote (NetflixAdaptationWidow @ Mar 13 2023 01:46pm)

Honestly this whole event signals why the fed is so hesitant to ever contract the money supply. We immediately started having bank failures.

Quote (Malopox @ Mar 13 2023 03:37pm)

To quote my favourite journalist - Matt Levine from Bloomberg:



Today FED announced Bank Term Funding Program (BTFP), offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. These assets will be valued at par. The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution's need to quickly sell those securities in times of stress.

Central Bank programs have never lent to banks at par before as you have to mark-to-market collateral typically.

I think that this is a big reason for today's selloff: rather than restoring confidence, the Fed has signaled that it perceives widespread solvency issues in the US banking sector. Lending with a haircut signals liquidity issues. Lending with a, er, negative haircut signals solvency issues.