*Cue's up Sisters of Mercy "A Slight Case of Overbombing"*
Bank Runs / Contagion - Via Twitter
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Genevieve Roch-Decter, CFA @GRDecter
Bill Ackman says there will be bank runs everywhere on Monday unless the FDIC does a system-wide guarantee.
FDIC only has $124.5 Billion on its balance sheet and a $100 Billion line of credit.
US banking system is +$22 Trillion.
FDIC assets cover only 1.26% of deposits.
Disturbing.
By then, it will cost several hundred fiat dollars for a loaf of bread, so...
The rollercoaster ride never ends wew! I just don't know how much this is going to affect the entire banking sector come Monday.
My wife and I will be fine either way, but I know there are others out there in much more dire situations.
I worry about them a lot.
A lot of trust being broken lately.
How the fuck was this allowed to pass?
Bitcoin. Sound Design. Video Game Design.
Working on my PHD in Meditation and mental self-care presently.
And just so you don't think I'm being a total dick, the startup my wife is working for had all their money tied up in... YUP!!! YOU GUESSED IT!!!! gallows humor is a helluva coping technique
American Life Pro-Tips
#techno
Here's some fresh beats to hopefully help get your weekend groove going on.
Watch out for falling jet-engines tho. Alien frens kinda pissed off dis weekend.
Had money tied up in Silicon Valley Bank - Stupid azzh0les. Keep tellin' dem to smash buy Bitcoin, but too busy trying to repair UFO. Gotta get the fuck out of this solar system ASAP yo
Thiel knew: "Thielβs Founders Fund Withdrew Millions From Silicon Valley Bank"
Answer: Different on every client lulz. Renders well on Iris. Not so much on Nostrid for now. We so early...
Wonder how Nostr handles raw Twitter linksβ¦
Go fuck yourself, and get smeared by a falling jet-engine.
Sincerely.
Not Financial Advice: Start loading up on JPM shorts!!!
Iβve done my research already - hence this rant against you - and realize Iβm wasting any further time engaging with a troglodytic retarded charlatan like you.
You keep on doing you. Iβm the least of your worries. We will not ever cross paths. I promise you.
Banking Contagion
Via Twitter:
Bill Ackman @BillAckman
The govβt has about 48 hours to fix a-soon-to-be-irreversible mistake. By allowing
@SVB_Financial to fail without protecting all depositors, the world has woken up to what an uninsured deposit is β an unsecured illiquid claim on a failed bank. Absent
@jpmorgan @citi or @BankofAmerica acquiring SVB before the open on Monday, a prospect I believe to be unlikely, or the govβt guaranteeing all of SVBβs deposits, the giant sucking sound you will hear will be the withdrawal of substantially all uninsured deposits from all but the βsystemically important banksβ (SIBs). These funds will be transferred to the SIBs, US Treasury (UST) money market funds and short-term UST. There is already pressure to transfer cash to short-term UST and UST money market accounts due to the substantially higher yields available on risk-free UST vs. bank deposits. These withdrawals will drain liquidity from community, regional and other banks and begin the destruction of these important institutions. The increased demand for short-term UST will drive short rates lower complicating the @federalreserveβs efforts to raise rates to slow the economy. Already thousands of the fastest growing, most innovative venture-backed companies in the U.S. will begin to fail to make payroll next week. Had the govβt stepped in on Friday to guarantee SVBβs deposits (in exchange for penny warrants which would have wiped out the substantial majority of its equity value) this could have been avoided and SVBβs 40-year franchise value could have been preserved and transferred to a new owner in exchange for an equity injection. We would have been open to participating. This approach would have minimized the risk of any govβt losses, and created the potential for substantial profits from the rescue. Instead, I think it is now unlikely any buyer will emerge to acquire the failed bank. The govβtβs approach has guaranteed that more risk will be concentrated in the SIBs at the expense of other banks, which itself creates more systemic risk. For those who make the case that depositors be damned as it would create moral hazard to save them, consider the feasibility of a world where each depositor must do their own credit assessment of the bank they choose to bank with. I am a pretty sophisticated financial analyst and I find most banks to be a black box despite the 1,000s of pages of @SECGov filings available on each bank. SVBβs senior management made a basic mistake. They invested short-term deposits in longer-term, fixed-rate assets. Thereafter short-term rates went up and a bank run ensued. Senior management screwed up and they should lose their jobs. The @FDICgov
and OCC also screwed up. It is their job to monitor our banking system for risk and SVB should have been high on their watch list with more than $200B of assets and $170B of deposits from business borrowers in effectively the same industry. The FDICβs and OCCβs failure to do their jobs should not be allowed to cause the destruction of 1,000s of our nationβs highest potential and highest growth businesses (and the resulting losses of 10s of 1,000s of jobs for some of our most talented younger generation) while also permanently impairing our community and regional banksβ access to low-cost deposits. This administration is particularly opposed to concentrations of power. Ironically, its approach to SVBβs failure guarantees duopolistic banking risk concentration in a handful of SIBs. My back-of-the envelope review of SVBβs balance sheet suggests that even in a liquidation, depositors should eventually get back about 98% of their deposits, but eventually is too long when you have payroll to meet next week. So even without assigning any franchise value to SVB, the cost of a govβt guarantee of SVB deposits would be minimal. On the other hand, the unintended consequences of the govβtβs failure to guarantee SVB deposits are vast and profound and need to be considered and addressed before Monday. Otherwise, watch out below.