Bank Run Watch 2023 after Silicon Valley Bank shutdown - Over 97% of SVB's assets were not FDIC insured

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Hyperbola said:
Is there an Earth-logic reason why anyone would buy a near-zero% interest bond?

I mean, what does it *get* you?
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They didn’t want zero interest bonds which is why they were buying the longest ones they could get, paying like 2-3% (the table is out there).

And the value of those cratered. If they had been buying short term zero percents they’d have been rolling them and getting better and better rates.

Or they could buy TIPS.

Both of these are the non Greedy option.

Combined with interest rates rising meaning no NEW VC money was flowing in and SV was still spending money - boom
 
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Meat Target said:
As I shared in the US politics thread, Moody's has downgraded six regional banks. Four of those are in deep Red states, one in Arizona, and one in San Francisco.

As I prophesied, they are punishing the small banks for the Big Banks' fuckups.

"Never let a crisis go to waste. You may be able to do things you couldn't do before," says Rahm Emanuel. For example, consolidate an oligopoly.
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Western Alliance, First Republic and Zion we've been watching for a few days now. They are the other banks Yellen was talking about on Friday. What's the deal with Comerica? Look slike the sort of outfit that Vic's Lolyer banks with.
 
AN/ALR56 said:
Reminder that Switzerland basically got threatened unless they bailed out CS:
www.reuters.com

Switzerland faces pressure from at least one major government to intervene on Credit Suisse- source

Switzerland is facing pressure from at least one major government to intervene on Credit Suisse in the coming hours given the systemic nature of the bank, a source familiar with the situation told Reuters.
www.reuters.com www.reuters.com
I still wonder if 50 billion is enough though.
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Transcript of the call

"listen here fat, let me, let me tell you howz we do business here in the Senate...
We will be holding a committee meet up tomorrow and uh, I'm, uh, gotta explain to everyone why the banks don't have any money!
And that's not good! So you had better say what I uh, tell you to say or I'll, I'll uh....hey, jeff, what's this uh, word...
Or I'll REVEAL, that's it, I'll REVEAL where it is you get all your deposits, and no its not just our CIA slush funds!
Oh sorry, yeah, yeah sorry Jeff, i'll stick to what you wrote, come on man.
Anyway, that's just to start, you understand what I mean? Now you uh, you fix this. By tomorrow!"

Who was on the other end of the call was not revealed, or which head of state it was.
 
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AN/ALR56 said:
I still wonder if 50 billion is enough though.
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Oh it's not, far from it. This will cover their immediately liabilities, but should a bank run happen it'll be a drop in the bucket. Goal of this is more to try and calm nerves and keep money in place, though that's not going to last long once the first guy inevitably bolts for the exit.

The severity of this should be very telling when the Swiss government had to be physically strong armed into backstopping even this amount - no one wants to bail out CS because literally no one can. It's the consequences of "too big to fail" in action.
 
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Scale Smerch said:
Oh it's not, far from it. This will cover their immediately liabilities, but should a bank run happen it'll be a drop in the bucket. Goal of this is more to try and calm nerves and keep money in place, though that's not going to last long once the first guy inevitably bolts for the exit.

The severity of this should be very telling when the Swiss government had to be physically strong armed into backstopping even this amount - no one wants to bail out CS because literally no one can. It's the consequences of "too big to fail" in action.
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It's still scary that a western power had to threaten them to take the fall for this.
They got harassed last year over russian assets and were pressured to give military aid/join Nato.
Kinda reminds me how in WW2 the us airforce kept "accidentally bombing" swiss towns near the german border until the swiss finally cut relations in late 1944.
 
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Scale Smerch said:
Oh it's not, far from it. This will cover their immediately liabilities, but should a bank run happen it'll be a drop in the bucket. Goal of this is more to try and calm nerves and keep money in place, though that's not going to last long once the first guy inevitably bolts for the exit.
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Who would WANT to keep money in Credit Suisse right now? What sort of possible incentive could they offer to prevent capital flight? The only way to stop it would be the "offer you can't refuse", but that won't do jack shit to restore confidence in the market.
 
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mindlessobserver said:
Euro exchanges are gonna be fun here in a few hours.
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Nah they're gonna go green like they always do when the regulators get backed into a corner and have to give the banks tons of free cash. Bet it'll be Friday when the post money infusion elation wears off and the reality of continued rate hikes set in.
 
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Credit Suisse shares soar by 30 per cent after announcing central bank aid​

Posted 1h ago
(O)(A)

Credit Suisse's shares have soared 30 per cent after announcing it will move to shore up its finances by borrowing up to nearly $81 billion from the Swiss central bank.

Key points:​

  • Credit Suisse shares plunged when its biggest shareholder announced it would not be putting more money into the bank
  • It has dragged down other banks as fears about the banking system grow after the collapse of US banks
  • The additional liquidity is designed to support its "core businesses"
It is a massive swing after its shares plunged 30 per cent on the SIX Swiss stock exchange on Wednesday when its biggest shareholder said it would not put more money into the Swiss lender.

That dragged down other European banks as fears about the banking system expanded overseas following the collapse of some US banks.

Credit Suisse, which was beset by problems long before the US bank failures, said Thursday that it would exercise an option to borrow up to 50 billion francs ($81 billion) from the central bank.

"This additional liquidity would support Credit Suisse's core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs," the bank said.

Fanning new fears about the health of financial institutions following the recent collapse of Silicon Valley Bank and Signature Bank in the US.

At one point on Wednesday, Credit Suisse shares lost more than a quarter of their value.

The share price hit a record low after the Saudi National Bank said it would not inject more money into the Swiss lender.

The Saudi bank is seeking to avoid regulations that kick in with a stake above 10 per cent, having invested some 1.5 billion Swiss francs to acquire a holding just under that threshold.

AP

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Looks like the can just got kicked a little further down the road.
 
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Anyone else seeing random internet posters do damage control? I've seen a few posts from 'financial (armchair) experts' that say a variation of "yes, things are bad, but it isn't doom like people think, but things are bad. We need to stay calm and not draw all of our money out, otherwise there will be no money to draw out"

It just seems strange that random people are telling other random people not to panic.

Take with a truck of salt and YMMV
 
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Bog-standard Poster said:
Anyone else seeing random internet posters do damage control? I've seen a few posts from 'financial (armchair) experts' that say a variation of "yes, things are bad, but it isn't doom like people think, but things are bad. We need to stay calm and not draw all of our money out, otherwise there will be no money to draw out"

It just seems strange that random people are telling other random people not to panic.

Take with a truck of salt and YMMV
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Lots of those people were insisting things weren’t going to shit in 2008 when Lehman, Bear Sterns, etc. were going tits up. Most of the time it’s people convincing themselves not to panic, it isn’t like they have any documentation to back up their assertions. Lots of people are checking out their 401ks and seeing nothing but red, which will freak people out who dumbassedly feel stocks will only go up and there’s never any time where it goes down.

Tbh, governments are just going to make the printers go brrr to paper over these losses. I don’t see major banks falling apart without depositors being made whole. That’s slightly better than in 2008-2009 when governments just gave lots of cash to the banks who kept it and gave themselves nice bonuses with it.
 
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Bog-standard Poster said:
Anyone else seeing random internet posters do damage control? I've seen a few posts from 'financial (armchair) experts' that say a variation of "yes, things are bad, but it isn't doom like people think, but things are bad. We need to stay calm and not draw all of our money out, otherwise there will be no money to draw out"

It just seems strange that random people are telling other random people not to panic.

Take with a truck of salt and YMMV
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Normalcy bias and copium. Two of the most lethal drugs on the planet.

Remember when they said Coronachan wasn't transmitted by humans? Or that the Afghanistan withdrawal was the "Most Successful Airlift Ever™️"? How'd those turn out?

I'd rather be a pessimist and be wrong than be an optimist and be wrong.

ETA:

Lagarde just raised rates for ECB 50 basis points. According to this guy, Credit Suisse will get rawdogged:

 
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