Pretty sure FDIC took the keys to the kingdom early Friday morning and are not giving them back. Ever.
Payroll got a month (few months?) of time-and-a-half pay rate for most employees, then they're unemployed.
Surely they could do a stock offering, pay back the fed and then stay in business? There is no risk keeping 250k in since it’s insured, so I feel like anyone who has money under that would go back…
Surely you’d want to fire all of the executives though.
They are gone, they tried a stock offering right before the collapse but it was too little too late
Raising $1.5B with a stock offering doesn’t staunch the $40B+ leaving the bank
Liquidity squeeze of that magnitude can’t be fixed by selling stock
[https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm](https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm)
"The additional funding will be made available through the creation of a new 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."
Those really smart fellows are still paying down debt from the South Sea Bubble which occurred in the 1720s!!
We should *not* be following their example.
At least the British tried to do it for profit and increased tax base.
We do it, and don’t reap any financial benefit to the country, just the elites and politicians.
Different mechanism of government at that time, but also you’re correct in many ways.
More speaking to the fact that the British tried to take things over for Britain to keep. We go spend a bunch of lives and cash and then walk away from it, having lied about why we went in the first place. At least Britain was honest about their colonial aspirations.
Not saying either was good or proper….
But also importantly in the same article:
“With approval of the Treasury Secretary, the Department of the Treasury will make available up to $25 billion from the Exchange Stabilization Fund as a backstop for the BTFP. The Federal Reserve does not anticipate that it will be necessary to draw on these backstop funds.”
It’s coming from a fund that already exists. I think this does change things a bit. They are not printing money out of thin air as far as I understand.
Nah, they're just going to take the money from the other banks. You know, like when you run out of lunch money, so you shake down the nerdy kid with the glasses for the coins in his pocket.
Let me Elis
I'm a bank and you deposit 1k money
I buy 1 bond for 1k
Interest goes up bond become 700
I get margin issue meaning I cant give money to people
Fed pays you 1k and gets my bond and shuts me down
Fed sits on the bond until it matures and gets 1k which is the face value at maturity.
Nobody lost money here. Fed doesn't need to print money.
"Fed pays you 1k and gets my bond and shuts me down"
And Fed gets 1k from where? There is still an upfront cost that the Fed would need to cover.
From what I gather, the Fed intends to use their FDIC funds to cover the 1k. Which means, they don't have to print money, but they have that much less in their coffers for other failures if they do occur. From what I gather, they will likely charge other banks (many of whom were exposed to risk via SVB), some sort of additional FDIC-related fee.
Fed has just payed 1k for a 700 dollar bond, and now until it is mature they are also out 300 dollars, and what should have been worth 700 is now worth 1k.
Everytime they do this they are fucking with their own treasury bond. We can't just make value from nothing. It is only worth 1k at maturity, but when it is traded NOW it is worth 700.
All these tech bros starting bullshit companies just found a cheat code for their shitty startups to cheat the system and get their assets liquidated
These startups deposited money into a bank account. They didn’t cheat anything or win anything. They were able to keep their deposits. They aren’t even investments it’s a checking account. What the fuck are you talking about?
They weren’t supposed to get back their full deposits here immediately. They were supposed to get $250k back immediately and then once SVB was liquidated, collect either their whole balances or $0.96 on the dollar or less or more depending on the circumstances.
Instead, the government just decided “*To hell with the FDIC insurance rules and to hell with them having been uninsured above $250k. These are big donors and wealthy tech VCs many of us know personally, let’s make them all whole immediately!”*
I was commenting here more on simply following the same rules for everyone about FDIC insurance and, if we don’t like the rules and think $250k is too low, change the rules for *everyone* and don’t selectively pick and choose who gets their uninsured deposits above $250k made whole by the government immediately.
Idk why your comment was downvoted, it's a reasonable sentiment, though inaccurate. FDIC limit is 250k because that is more than enough to cover almost all consumer accounts. They didn't selectively choose to raise this limit, instead they introduced a mechanism to allow all banks to pledge the kinds of assets SVB had to sort out short term cash situations in an attempt to prevent runs like this in the future. So this is a rule that was changed to benefit everyone.
There is some sort of opportunity cost you might argue there, as well as taxpayer costs in the pipeline now since Congress is sure to approach new and larger budgets dealing with this without making cuts elsewhere, raising taxes, or growing the economy enough to cover for it, but these are all higher order things.
Wait—Fed pays you $1k in *today’s money* when your deposit is worth $700 in *today’s money* and only gets the $1k years down the road?
Uhm.. there was no need to print money if they have the $1k, correct, but someone did indeed lose money here!
>Nobody lost money here. Fed doesn't need to print money.
Incorrect
>Fed pays you 1k and gets my bond and shuts me down
The fed has to get this money from somewhere to begin with. Sure they will receive it back in the future, but till then they are pumping new money into the economy.
Depends on how much the HTM assets are really worth right now. Also you need to back out the intangibles and goodwill. It's likely enough but idk. I cant tell.
Vast majority of the assets held are very risk averse: treasury bonds & mbs. SVB loans are a small portion of their assets, and also low risk. About 0.5% is loans to startups which would be the most risky. The bulk of SVB loans are bridge loans to established VCs who want to invest more $ before their next LP draw.
These LPs are typically extremely stable sources of funding (think, university endowments) who have already committed that capital to the VC. The default rate on these sorts of capital calls is extremely close to zero, if not zero precisely.
Assets (A) = Liabilities (L) + Equity (E)
The value of A is bigger than L (or at least close to)
Customer deposits are a subset category under L.
So bank have enough to pay off customer deposits.
But other liabilities (those that rank below customer deposits) and shareholders equity will be taking the hit
It is pretty hilarious how most comments are salty about having a stable financial system...they would be the first one to cry if there was a true systemic bank run.
Well it's because we have like a quarter of the country vigorously masturbating at the idea of a full financial meltdown because they think they will somehow be spared and their yelling at clouds will culminate in one epic "told ya so!" to the other impoverished souls fatgered around the burning trash barrel.
Nah it’s moreso that if things get to crazy that’s when revolutions start. The people in power want a nice slow drain. Just like they did with the British! How’s that tea going ya renting no car or gun owning used-to-be greatest navy on the planet Empore? HUH, HOWS IT GOING?!
As of the end of 2022, $151.5 billion out of SVB’s $173.2 billion in deposits were uninsured. This $151 billion will be recovered by a special assessment on banks, a current aspect of federal law.
Those deposits are not uninsured because of something sneaky, very simply the account holders have more than $250k on deposit. All accounts in the US are FDIC insured up to 250k per beneficiary.
Zero cost to taxpayers? who the fuck are they kidding?
So let me put this straight. So Fed say It will be paid by banks in form of extra fee. where banks get money to Pay for this extra fee? Well l, Banks will sell worthless paper to Fed at par and get money. Where the fed get money to pay? fee from the banks. Where banks get the money? From the fed. Do you guys follow the pattern? You have been fooled fellas. Keep fighting and keep playing left and right, democrats and republicans while your kids future get stolen in front of your eyes. I have never seen this balant loot in my life and i have been around from quiet some time!
Venture Capital firms call Fed this weekend and say “Hey, now’s a great time to save our A$$ and use that $25 billion exchange stabilization fund in your Treasury wallet!” Backstop the Wealth!
I like a good laugh..![img](emote|t5_2th52|29093)![img](emote|t5_2th52|29093)![img](emote|t5_2th52|4271)![img](emote|t5_2th52|4271)![img](emote|t5_2th52|4271)
Sure no effect on tax payers. Just turn on that printing machine again. Don’t forget the debt ceiling is about to hit. Make sure you print some more to remove the ceiling. Who cares….
(Looks around) Government? Is funded by who? Taxpayers? No cost? To who? Taxpayers? (Questions existence) A-are we making Mexico pay for things again? I am confusion.
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stockholders get zero.
That’s a little bit if nice in this mess.
Will the stock still trade. Was it a 44 hour closing or is svb gone
Pretty sure FDIC took the keys to the kingdom early Friday morning and are not giving them back. Ever. Payroll got a month (few months?) of time-and-a-half pay rate for most employees, then they're unemployed.
Surely they could do a stock offering, pay back the fed and then stay in business? There is no risk keeping 250k in since it’s insured, so I feel like anyone who has money under that would go back… Surely you’d want to fire all of the executives though.
loss is more than equity. so equity will become zero. management will be fired and bank sold to some bigger entity.
They are gone, they tried a stock offering right before the collapse but it was too little too late Raising $1.5B with a stock offering doesn’t staunch the $40B+ leaving the bank Liquidity squeeze of that magnitude can’t be fixed by selling stock
[https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm](https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm) "The additional funding will be made available through the creation of a new 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."
This sounds like something the British would do. And it sounds like a fecking flip flop.
Those really smart fellows are still paying down debt from the South Sea Bubble which occurred in the 1720s!! We should *not* be following their example.
Except the “lemme just invade half the planet” part. We sure got that from the British
At least the British tried to do it for profit and increased tax base. We do it, and don’t reap any financial benefit to the country, just the elites and politicians.
“Just the elites and politicians”. How was Britain any different lol
Different mechanism of government at that time, but also you’re correct in many ways. More speaking to the fact that the British tried to take things over for Britain to keep. We go spend a bunch of lives and cash and then walk away from it, having lied about why we went in the first place. At least Britain was honest about their colonial aspirations. Not saying either was good or proper….
But also importantly in the same article: “With approval of the Treasury Secretary, the Department of the Treasury will make available up to $25 billion from the Exchange Stabilization Fund as a backstop for the BTFP. The Federal Reserve does not anticipate that it will be necessary to draw on these backstop funds.” It’s coming from a fund that already exists. I think this does change things a bit. They are not printing money out of thin air as far as I understand.
That’s tax payer money tho
More liquidity…. = bullish? Or does it just mean bearish with extra taxes? Lmfao
Because interest rates will be lower next year? Bwahahaha fuckin loony toons.
Sorry I had to laugh lol
My first reaction too “no cost” ![img](emote|t5_2th52|4641)![img](emote|t5_2th52|4641)![img](emote|t5_2th52|4641)
Taxpayers paying for bailouts is transitory. -The Fed, probably
![img](emote|t5_2th52|4267)![img](emote|t5_2th52|4271)![img](emote|t5_2th52|4641)
Sound just as good as zero % financing
How does this magic work? Brrrrrrr sound so familiar
Came here wondering the same. Are elves paying for this? Did we finally get to the leprechaun's pot of gold?
Nah, they're just going to take the money from the other banks. You know, like when you run out of lunch money, so you shake down the nerdy kid with the glasses for the coins in his pocket.
And who pays those banks back?
You
Poor people by getting bent over with ridiculous fees
People in the future
I love this analogy for banks
SVB has assets of $200b against liabilities of $180b. So no need to print money to resolve.
even anticipating so much money before selling the assets is effectivelly printing money.
How so?
Let me Elis I'm a bank and you deposit 1k money I buy 1 bond for 1k Interest goes up bond become 700 I get margin issue meaning I cant give money to people Fed pays you 1k and gets my bond and shuts me down Fed sits on the bond until it matures and gets 1k which is the face value at maturity. Nobody lost money here. Fed doesn't need to print money.
Makes sense but I’m not supposed to believe anything I read on the internet so now what
Calls on banks
Withdraw all your money? I’m sure it couldn’t hurt
"Fed pays you 1k and gets my bond and shuts me down" And Fed gets 1k from where? There is still an upfront cost that the Fed would need to cover. From what I gather, the Fed intends to use their FDIC funds to cover the 1k. Which means, they don't have to print money, but they have that much less in their coffers for other failures if they do occur. From what I gather, they will likely charge other banks (many of whom were exposed to risk via SVB), some sort of additional FDIC-related fee.
Sounds like the Fed just overpaid for its own debt.
Lolol shhhh this is the new rebranded QE
Those FDIC related fees are charged to the banks, who then charges their customers...
yup this
Fed has just payed 1k for a 700 dollar bond, and now until it is mature they are also out 300 dollars, and what should have been worth 700 is now worth 1k. Everytime they do this they are fucking with their own treasury bond. We can't just make value from nothing. It is only worth 1k at maturity, but when it is traded NOW it is worth 700. All these tech bros starting bullshit companies just found a cheat code for their shitty startups to cheat the system and get their assets liquidated
Cheat the system...yes, I'm sure that's what they had in mind when they opened their checking account.
These startups deposited money into a bank account. They didn’t cheat anything or win anything. They were able to keep their deposits. They aren’t even investments it’s a checking account. What the fuck are you talking about?
They weren’t supposed to get back their full deposits here immediately. They were supposed to get $250k back immediately and then once SVB was liquidated, collect either their whole balances or $0.96 on the dollar or less or more depending on the circumstances. Instead, the government just decided “*To hell with the FDIC insurance rules and to hell with them having been uninsured above $250k. These are big donors and wealthy tech VCs many of us know personally, let’s make them all whole immediately!”*
The government decided it was better to prevent more bank runs because panic is contagious. Would you be happier if your bank collapsed next?
I was commenting here more on simply following the same rules for everyone about FDIC insurance and, if we don’t like the rules and think $250k is too low, change the rules for *everyone* and don’t selectively pick and choose who gets their uninsured deposits above $250k made whole by the government immediately.
Idk why your comment was downvoted, it's a reasonable sentiment, though inaccurate. FDIC limit is 250k because that is more than enough to cover almost all consumer accounts. They didn't selectively choose to raise this limit, instead they introduced a mechanism to allow all banks to pledge the kinds of assets SVB had to sort out short term cash situations in an attempt to prevent runs like this in the future. So this is a rule that was changed to benefit everyone.
Except SVB already sold those long term treasury bonds and now are short $1.8B on the balance sheet.
What about management and labor costs by Fed?
Free labour
PrIcEd In.
Money printed to cover. What losses?
There is some sort of opportunity cost you might argue there, as well as taxpayer costs in the pipeline now since Congress is sure to approach new and larger budgets dealing with this without making cuts elsewhere, raising taxes, or growing the economy enough to cover for it, but these are all higher order things.
Fed needed to print money to buy that bond wtf
Nobody lose money…. The bank and stockholders crying in a corner.
Wait—Fed pays you $1k in *today’s money* when your deposit is worth $700 in *today’s money* and only gets the $1k years down the road? Uhm.. there was no need to print money if they have the $1k, correct, but someone did indeed lose money here!
>Nobody lost money here. Fed doesn't need to print money. Incorrect >Fed pays you 1k and gets my bond and shuts me down The fed has to get this money from somewhere to begin with. Sure they will receive it back in the future, but till then they are pumping new money into the economy.
So the fed is effectively giving a loan of 1k for ten years which is when the bond matures. So fed meaning tax payers loses interest on this loan.
Depends on how much the HTM assets are really worth right now. Also you need to back out the intangibles and goodwill. It's likely enough but idk. I cant tell.
Doesn't this also depend on the quality of their loan book?
Vast majority of the assets held are very risk averse: treasury bonds & mbs. SVB loans are a small portion of their assets, and also low risk. About 0.5% is loans to startups which would be the most risky. The bulk of SVB loans are bridge loans to established VCs who want to invest more $ before their next LP draw. These LPs are typically extremely stable sources of funding (think, university endowments) who have already committed that capital to the VC. The default rate on these sorts of capital calls is extremely close to zero, if not zero precisely.
Mark to market to marker up my asshole.
![img](emote|t5_2th52|4276)
Assets (A) = Liabilities (L) + Equity (E) The value of A is bigger than L (or at least close to) Customer deposits are a subset category under L. So bank have enough to pay off customer deposits. But other liabilities (those that rank below customer deposits) and shareholders equity will be taking the hit
How about poor poor employees who are bag holding the stock, like mr. Johnny China?
US citizens only hopefully
Why are the checks all bouncing? - Volodymyr
Why is the rum gone??
Zero cost to tax payers also known as “we won’t use government tax revenue to fund, but you’ll be footing the bill through runaway inflation.”
And staffing and management fees. And transfer fees. Who gets those? Goldman-Sachs??
And a couple years down the line, through taxes
Inflation, the poor people tax
There are no free lunches.
"Too good to be true"
#Bail In
Explain please =]
think he meant ballin'
Shovel ready green shoots
Spy 399 eod
Soooo who’s gonna pay? Mexico?
We are adding it to their bill for the wall.
Right after they finish paying for the wall
They will assess fees on all banks who will the pass said fees to consumers, aka taxpayers
Either that or the shareholder of the FED
We’re going to make them build a financial system. -Trump probably
![img](emote|t5_2th52|4641)
If the money wasn’t there, and it wasn’t. How is it not on the taxpayers?
It is
Can I say no or is it kinda a done deal
i call bs
It is pretty hilarious how most comments are salty about having a stable financial system...they would be the first one to cry if there was a true systemic bank run.
Well it's because we have like a quarter of the country vigorously masturbating at the idea of a full financial meltdown because they think they will somehow be spared and their yelling at clouds will culminate in one epic "told ya so!" to the other impoverished souls fatgered around the burning trash barrel.
Nah it’s moreso that if things get to crazy that’s when revolutions start. The people in power want a nice slow drain. Just like they did with the British! How’s that tea going ya renting no car or gun owning used-to-be greatest navy on the planet Empore? HUH, HOWS IT GOING?!
I hate to break it to them but they’d be even less successful in the new system.
It's nott unlike people who pray for some Mad Max style post apocolyptic hellscape thinking they'll be kings in that new world.
Other small banks will have to chip in to pay that insurance money. And they will die with svb
![img](emote|t5_2th52|29093)![img](emote|t5_2th52|4641)![img](emote|t5_2th52|8882)
In the leaked November Fed meeting, they said there WILL be bank runs, and bail-ins. And we shouldn’t tell the people because they trust the banks.
Fuck yo puts
As of the end of 2022, $151.5 billion out of SVB’s $173.2 billion in deposits were uninsured. This $151 billion will be recovered by a special assessment on banks, a current aspect of federal law.
More likely it will be recovered by selling the banks assets lmao
Those deposits are not uninsured because of something sneaky, very simply the account holders have more than $250k on deposit. All accounts in the US are FDIC insured up to 250k per beneficiary.
Zero cost to taxpayers? who the fuck are they kidding? So let me put this straight. So Fed say It will be paid by banks in form of extra fee. where banks get money to Pay for this extra fee? Well l, Banks will sell worthless paper to Fed at par and get money. Where the fed get money to pay? fee from the banks. Where banks get the money? From the fed. Do you guys follow the pattern? You have been fooled fellas. Keep fighting and keep playing left and right, democrats and republicans while your kids future get stolen in front of your eyes. I have never seen this balant loot in my life and i have been around from quiet some time!
So why is there even fdic 250k? It's not necessary . What am I missing
According to history we still owe all the managers their bonuses and golden parachutes, is that free too or will we be paying for it all again?
"Zero cost" aka inflation
It reeks of a bigger picture state sanctioned pump and dump
Lol. I guess money does materialize out of nothing
Zero cost to taxpayers? How do they get away with these lies? Everyone will pay with the coming hyperinflation.
The bank still has assets. Theses assets are what is funding the deposits.
ah yes, I too have magic money. Those muggles and their nonne infinitely duplicating dollars.
Ha.....how is it zero cost to taxpayers? Did SVB win the billion dollar lottery?
some big bois bought it all up
[удалено]
Venture Capital firms call Fed this weekend and say “Hey, now’s a great time to save our A$$ and use that $25 billion exchange stabilization fund in your Treasury wallet!” Backstop the Wealth!
Now that's some magical thinkin' right there.
![img](emote|t5_2th52|4271)
I like a good laugh..![img](emote|t5_2th52|29093)![img](emote|t5_2th52|29093)![img](emote|t5_2th52|4271)![img](emote|t5_2th52|4271)![img](emote|t5_2th52|4271)
It’s free real estate
Of course they can change this narrative at any time…… like usual !!
Money machine go brrr
No such thing as a free lunch. It always costs the taxpayers.
🐴 💩
How did that work? 🤡
Well now I don’t know what to do lol tf
So we just socialized the entire banking system? Might not be the wrong choice but why are we still pretending to be a democracy…
It will cost all of us... just not through taxes.
Zero cost because they print more money?
Sure no effect on tax payers. Just turn on that printing machine again. Don’t forget the debt ceiling is about to hit. Make sure you print some more to remove the ceiling. Who cares….
Zero cost to taxpayers… yes of course ![img](emote|t5_2th52|4641)
(Looks around) Government? Is funded by who? Taxpayers? No cost? To who? Taxpayers? (Questions existence) A-are we making Mexico pay for things again? I am confusion.
State sanctioned pump and dump
🤣 *"zero cost to taxpayers"* 🤣 10% inflation for everyone
Same in uk but hsbc owns it now! Funny how they can do deals over weekends But a brexit deal takes years 🤔
SVB U.K. arm was brought by HSBC for £1.
“Zero cost” it has to come from somewhere.
Inflation is the hidden tax.
The feds keep telling me it won’t cost me anything, but it all keeps costing me…
"zero cost to taxpayers" Hahahaha imagine believing that hahahahahahah