This is like watching andre the giant wrestle an armless child.

What's happening with SVB is a function of primarily two things, none of them having much to do with anything international. Higher rates in 2022 has pushed fixed income securities prices down, with pretty much all western banks carrying hundreds of billions in unrealized losses, so when they have deposit outflows they have to realize those losses and have to raise capital to match their asset side of the balance sheet. When they tried doing that, the panic turned into every depositor trying to pull out their money causing a bank run. Deposit outflows currently are impacting the whole banking industry tbh, it's not unique to SVB, most regional banks are having this issue to an extent or another. SVB was particularly vulnerable to deposit outflows because they cater to venture capital and companies that have a very high cash burn rate.

Don't feel like going into the details of it, but it's actually a really big deal what's happening with SVB. It's a 200 billion dollar in asset bank and the government has to 100% step in to insure those deposits are returned to those clients. We have about ~200 million in credit lines extended to SVB but only like ~34 million of those are utilized, not 100% sure we fully recover that 34mm.

But the bigger picture here is this administration is really asleep at the wheel. Yellen and Biden have their priorities completely inverted. Too focused on Ukraine while we have massive issues cropping up here in the US. East Palestine and now this make it abundantly evident.

This post was edited by ofthevoid on Mar 12 2023 11:21am

Good explanation. A few extra points to note, too:
1) The proportion of corporate to retail customers was extremely high, and corporate customers are more susceptible to flight
2) They had a lot of loans relative to deposits
3) High proportion of long duration bonds to short, exacerbating their losses
4) Low provision for losses

The more I read about it, the more it seems to have been a perfect storm of events.

Russia is doing the exact same thing only MSM doesn't tell you that.




My opinion is that progressive trash should be sent to the trenches in Ukraine, that would definitely teach you a thing or two.




"Arab Spring" ????

You probably meant the Western backed violent uprisings huh.

How about foreign powers bombing the crap out of the UK, you've got non-stop protests going on right, unhappy workers that don't get payed enough to cover their cost of living and so on.

Don't worry those foreign powers I mentioned will call it the UK spring, all will be good

Yeah all fair and important points, particularly 1 and 3. I work in wholesale credit underwriting, specifically covering NA banks. My colleague actually worked on SVB a few months back where he noted their concentration to VC/start ups which have exponentially higher burn rates so those deposits are not sticky at all. The gravy train from 2020-21 when we had pretty much free money with very low fed funds and trillions being pumped in is gone. Their treasury really fucked up by loading on long duration MBS that was heavily discounted in 2022 as FF went from like nothing to 4.5% now. Like I don't really understand how they could have been so blind to buy long dated fixed income securities at generational top with rates being 0. Did they really expect rates to be 0% forever?

Not sure, maybe they just went for long duration bonds because they paid the most. They didn't have many interest bearing assets in the form of loans, unlike most banks, so their bond strategy may have been more risk-seeking to make up for it.

The fallout from the crash in bond prices is really scary when you think about the impact it has had on pension funds and foreign governments.

This post was edited by dro94 on Mar 12 2023 01:30pm

Yeah completely nothing to do with decades of oppressive dictators

Hillary Clinton herself sent thousands into the streets and then forced the regimed to murder thousands of them in return.

No, Ukraine artillery is vastly more precise than Russian, and so on: they need less shells for the same result.



I guess they will be in a better position that the mobiks meat (which should be be joined by the anti-all losers)

You have no clue. Russia is using drones on a large scale and can use precision guided ammunitions like the krasnopol guided artillery shells and schmell chak mortar shells to engage the targets.

It has to do with Western powers that think they should police the world and cause death and destruction wherever they go