Signature Bank & Silicon Valley Bank Failures. No need to panic.

[DKTanker]

1 hour ago, Ssnake said:

 

1, are the 250,000.- that are circulated the insurance mandated by law, and the actual insurance limits are higher, and

2, is this, indeed, for both corporate and private deposits, or are those different as well?

There is no difference, both treated the same.  Or not.  Turns out some businesses of Gavin Newsome, Governor California, had a lot of money tied up in bank accounts with SVB.  I'm sure he was glad that President Biden guaranteed his businesses wouldn't lose any money.

[Ivanhoe]

Relevant to this thread because of Cramer's chump-and-dump tactics re SVB;

https://thepostmillennial.com/inverse-jim-cramer-etf-outperforming-market-trackers-after-just-2-weeks

 

Quote

In the two weeks since its launch, the "Inverse Cramer Tracker" exchange-traded fund (ETF) has been outperforming the market by allowing investors to short any stock CNBC Mad Money host Jim Cramer recommended buying.

The ETF was launched on February 28, alongside another that goes along with all of Cramer's top picks.

 

[Ssnake]

1 hour ago, Ivanhoe said:

In the two weeks since its launch, the "Inverse Cramer Tracker" exchange-traded fund (ETF) has been outperforming the market by allowing investors to short any stock CNBC Mad Money host Jim Cramer recommended buying.

No matter how stupid the guy is, the law that long-term you can't substantially outperform the market also means that you can't seriously underperform in the long run (unless you bankrupt yourself). Because, that would mean that doing the opposite would, again, outperform the market.

[EchoFiveMike]

Presuming that the guy isn't just pumping up stocks for the cabal so they can be dumped.  It's just market manipulation.  S/F....Ken M

[17thfabn]

3 hours ago, DKTanker said:

What should the upper limit be?  The Federal government just this week said there is no upper limit, that they'll make good on all deposits regardless of how large.  In other words there is no upper limit.  Now banks have been incentivized to offer all manner of risky ventures to their depositors because they know potential losses are being underwritten by the federal government. 

The owners of the bank (stockholders) and management are not incentivized to make risky moves. The federal insurance only supports the depositors not the stockholders. 

If the bank makes bad moves the stockholders can still be wiped out.

[Ivanhoe]

3 hours ago, Ssnake said:

No matter how stupid the guy is, the law that long-term you can't substantially outperform the market also means that you can't seriously underperform in the long run (unless you bankrupt yourself). Because, that would mean that doing the opposite would, again, outperform the market.

Only in market conditions with symmetric information among all parties. 

[DKTanker]

19 hours ago, 17thfabn said:

The owners of the bank (stockholders) and management are not incentivized to make risky moves. The federal insurance only supports the depositors not the stockholders. 

If the bank makes bad moves the stockholders can still be wiped out.

Today Janet Yellen testified before the Senate Finance Committee and stated that uninsured INVESTORS of SVB and Signature Banks will be made whole.  Private profit, socialized risk.  Ain't crony capitalism/corporatism great?

[17thfabn]

51 minutes ago, DKTanker said:

Today Janet Yellen testified before the Senate Finance Committee and stated that uninsured INVESTORS of SVB and Signature Banks will be made whole.  Private profit, socialized risk.  Ain't crony capitalism/corporatism great?

I saw 4 days ago Yellen said  the U.S would NOT bail out the owners and investors. Do you have a more recent qoute?

"Yellen rules out bailout of Silicon Valley Bank owners, investors"

“Well let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out,” Yellen said in an interview with CBS’s “Face The Nation.” The reforms that have been put in place means that we’re not going to do that again.

But we are concerned about depositors and are focused on trying to meet their needs.”

https://thehill.com/homenews/sunday-talk-shows/3896178-yellen-rules-out-bailout-of-silicon-valley-bank/

[DKTanker]

31 minutes ago, 17thfabn said:

I saw 4 days ago Yellen said  the U.S would NOT bail out the owners and investors. Do you have a more recent qoute?

"Yellen rules out bailout of Silicon Valley Bank owners, investors"

“Well let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out,” Yellen said in an interview with CBS’s “Face The Nation.” The reforms that have been put in place means that we’re not going to do that again.

But we are concerned about depositors and are focused on trying to meet their needs.”

https://thehill.com/homenews/sunday-talk-shows/3896178-yellen-rules-out-bailout-of-silicon-valley-bank/

From today's Senate Finance Committee hearing.

James Lankford (R-OK)

Quote

It has been reported publicly that SVB had a large number of Chinese investors, including some that are directly connected to the Chinese Communist Party. Will those companies, entities, and investors that are Chinese investors be made whole based on assessments in my banks in Oklahoma? So, what I’m asking is, will my banks in Oklahoma pay a special assessment to be able to make Chinese investors whole from Silicon Valley Bank?

Janet Yellen replied.

Quote

“Uninsured investors will be made whole in that bank and I suppose that could include foreign depositors, but I don’t believe there is any legal basis to discriminate among the uninsured.”

Added context.  It was revealed two days ago that California Governor, Gavin Newsom, owns three companies that did business with SVB.  It was revealed today that bank records show the Biden Crime Family Syndicate received over $3M from the Chinese government in 2017.

Edited March 16, 2023 by DKTanker

[17thfabn]

I don't know where they got the authority to exceed the $250,000 limit on insuring deposits, but at least an argument can be made for it.

Where would they have the authority to bail out investors / owners? 

I wonder if it is possible she misspoke, since she refers to investors and depositors in the same sentence.  

[DKTanker]

5 minutes ago, 17thfabn said:

I don't know where they got the authority to exceed the $250,000 limit on insuring deposits, but at least an argument can be made for it.

Where would they have the authority to bail out investors / owners? 

I wonder if it is possible she misspoke, since she refers to investors and depositors in the same sentence.  

We can parse the sentence six ways to Sunday.  They way I'm understanding her words is that there is a group of investors and a group of depositors all of whom will be made whole.  Either way, your banking fees (taxes) will be increasing to pay for this largess.

From where was the authority derived?  It was executive fiat.  Biden ordered it, it happened.

[rmgill]

4 hours ago, 17thfabn said:

I don't know where they got the authority to exceed the $250,000 limit on insuring deposits, but at least an argument can be made for it.

🤔

Does Biden NEED authority to just do what he wants with money? Hey, it's a pandemic emergency.

He can spend a Billionteen shaupaduperllars because he needs to. Come on man!

Edited March 17, 2023 by rmgill

[sunday]

[Ivanhoe]

https://notthebee.com/article/first-republic-bank-executives-sold-12-million-in-stock-in-two-months-leading-up-to-collapse

Quote

 

First Republic Bank is facing backlash after executives sold millions of dollars in shares before the bank saw a precipitous decline in value and currently faces the prospect of insolvency. FRB's stock has plummeted in recent days, and insiders had been selling for two months leading up the drop, according to government filings.

Several executives, including the bank's president of private wealth management, the chief credit officer, and the CEO, sold a combined $7 million in shares in the two months leading up to the stock's crash. Executive Chairman James Herbert II also sold $4.5 million worth of shares in the same timeframe.

The executives' shares were sold at $130 per share on average. First Republic shares opened at $20.22 today.

 

 

[17thfabn]

7 hours ago, Ivanhoe said:

https://notthebee.com/article/first-republic-bank-executives-sold-12-million-in-stock-in-two-months-leading-up-to-collapse

 

Didn't that get Martha Stewart jail time?

[rmgill]

36 minutes ago, 17thfabn said:

Didn't that get Martha Stewart jail time?

Yep. In this case, she got a tip from her stock broker (Peter Bacanovic) who fed her the insider info he had. 

https://en.wikipedia.org/wiki/ImClone_stock_trading_case

[nitflegal]

It's always reassuring to learn that our elites have learned nothing.  2008 showed that there were some banks too big to fail that were in effect underwritten by the Federal government.  After reassuring us that no banks would be allowed to do that again, here we are.  I'll vote for any candidate who uses his first day in office to identify every bank that is past the thresehold of being too big to fail and then breaking them up.  It is time like this somewhere along the line I became more of a populist than a conservative.

[bojan]

If anything is "too big to fail" it is also "too big to exist as such".

[nitflegal]

11 hours ago, bojan said:

If anything is "too big to fail" it is also "too big to exist as such".

Unfortunately, too big to fail also means plenty big enough to donate large amounts to politicians.

[Strannik]

This case was more like "depositors are too important to fail".  What will the next category be?

[Ivanhoe]

I assume that investors from the PRC called up Xi, who called Biden and gave him marching orders. 

 

[DKTanker]

12 hours ago, Strannik said:

This case was more like "depositors are too important to fail".  What will the next category be?

I've heard tell that a few (many?) were upset that they were essentially upside down because of the rising fed rate so they fomented the bank run to force the bank into failure, thus reaping the rewards of FDIC insurance.   They must have fainted with pleasure when they heard every single penny would be underwritten.

[DKTanker]

3 hours ago, Ivanhoe said:

I assume that investors from the PRC called up Xi, who called Biden and gave him marching orders. 

I've no doubt more than a few Republicans are also part of the bought by China squad as well.  The primary difference, thus far, they haven't had a drug addled family member let the cat out of the bag.  That said, I find it amusing that "RINO" Kevin McCarthy apparently isn't part of that squad.

[RETAC21]

On 3/18/2023 at 12:05 AM, nitflegal said:

It's always reassuring to learn that our elites have learned nothing.  2008 showed that there were some banks too big to fail that were in effect underwritten by the Federal government.  After reassuring us that no banks would be allowed to do that again, here we are.  I'll vote for any candidate who uses his first day in office to identify every bank that is past the thresehold of being too big to fail and then breaking them up.  It is time like this somewhere along the line I became more of a populist than a conservative.

This is precisely not the case. These banks are not too big to fail, which is why their depositors can be make whole. And because they weren't, they were able to lobby their congressment to be exempt of the capital and liquidity limits of big banks - leading to their collapse when they concentrated their assets too much and didn't take into account their liquidity needs.

[Ivanhoe]

On 3/18/2023 at 8:30 PM, DKTanker said:

I've no doubt more than a few Republicans are also part of the bought by China squad as well.  The primary difference, thus far, they haven't had a drug addled family member let the cat out of the bag.  That said, I find it amusing that "RINO" Kevin McCarthy apparently isn't part of that squad.

Some percentage of Rs are there for the grift. Even if they don't like the PRC nor are receiving 30 pieces of silver along with their D counterparts, I have no doubt that a bunch of them get "investment tips" from their bedfellows from across the aisle.