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Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

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Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#161

Post by BearOso »

1270018080 wrote: post #134
FormerBandmate wrote: post #53

Earlier quoted context omitted.

This is how financial crises start. IndyMac ($40 billion) went under in July 2008 which caused tension, and then Lehman fell apart two months later which led to 15 institutions failing in a matter of weeks. There are other financial institutions that are suffering. We could definitely see cascades among some of the weaker banks

Those banks were all built on a fraudulent and irrational housing bubble. SVB just bought too many bad bonds and got stuck. I don't see the industry-wide effects from this.

We're in a semi-fraudulent housing bubble now. Well, maybe not fraudulent, but unethical, and similar to what was going on in the '00s.

Big banks are holding onto large, mostly unoccupied housing developments to create artificial scarcity and drive the prices up. Then they're selling with huge loans to buyers that are going to see value plummet and be unable to pay anything back.

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#162

Post by piyh »

dehrmann wrote: post #106
helloworld wrote: post #92

Earlier quoted context omitted.

"SIPC protects against the loss of cash and securities – such as stocks and bonds – held by a customer at a financially-troubled SIPC-member brokerage firm. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash." https://www.sipc.org/for-investors/what-sipc-protects

> $500,000 That's way too low. The other thing this exposed is that FDIC protection for businesses is also too low.

It's a per bank amount. If you're floating 300k in cash as an average person, split it between institutions.

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#163

Post by Gustomaximus »

aynyc wrote: post #38

I think this might be the beginning. I think various funds (public or private) which have capitals stored in SVB is gonna be in a lot of trouble. Every investment firms are probably scanning their portfolios and business cash lines to see how much they are impacted by SVB and similar banks. I wouldn't be surprised to see a run on banks in the next few days/weeks if additional rumors (true or not) come out. Edit: didn…

What does a bank run look like at this level of corporate holdings? They can hardly ask for a few hundred million in cash.

Are they moving money from one bank to another, spreading money across banks to reduce single points of failure.

Maybe buying bonds, gold or other more secure investments? Roll the dice on crypt as if it does have a moment to shine this is it.

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#164

Post by paulclinger »

tiffanyh wrote: post #159
moralestapia wrote: post #135

Earlier quoted context omitted.

Sure, but why couldn't be a bank that's just like a money vault and that's it. I don't care if I get no interest, I may even pay a fee for that service.

That’s called a safety deposit box.

Chase doesn't allow storing cash in them (other than collectible items) and I know that others banks don't allow either (most likely to limit their liability).

I lived through Washington Mutual going through FDIC receivership back in 2008 (I was their employee, shareholder and account holder at that time) and their stock price dropped to almost zero when the news broke about that. I'm curious why this is not the case here.

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#165

Post by Gustomaximus »

hartator wrote: post #71

If you use your bank account brokerage to buy stocks, what happen to the stocks if the bank goes bankrupt like this?

Country dependent answers here.

In Australia most trade accounts use 'Chess' system which basically means when they buy shares they buy them in the account holders name so you own them and if the broker collapses it's not a problem.

In US I believe they are generally owned in the brokers name but using 'SPIC' so you have $500k protection coverage similar to bank deposit protection.

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#166

Post by skeeter2020 »

jrockway wrote: post #151
babyshake wrote: post #99

Earlier quoted context omitted.

"As long as everyone doesn't try withdrawing their money all at once, everything will be fine. So don't panic..."

Isn't this true of every bank since fractional reserve became legal?

Fractional reserves have never been illegal; the practice predates government monetary policy. The alternative would be a vault or safety deposit box.

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#167

Post by skeeter2020 »

metalspot wrote: post #126
Spivak wrote: post #67

Earlier quoted context omitted.

Is there any bank out there that can survive a panic bank run?

JP Morgan Chase, Bank of America, Citibank, and anyone else who will be bailed out by the fed. But seriously, the problem with SVB was that their assets are trash and everyone knew it. If their assets were actually worth what they claimed they would have no problems.

This is not the same situation as dogshit assets from the sub-prime crisis; the bonds are not "trash" in the sense people are thinking, but long-term, lower interest instruments. As interest rates have risen they are a relatively poorer invesment, but still have the long-term (illiquid) value of the underlying asset less the curret rate to return differential. It's inaccurate to say they mis-stated the value of their assets.

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#168

Post by koolba »

toomuchtodo wrote: post #65
koolba wrote: post #56

Earlier quoted context omitted.

Bear Stearns was even earlier that same year. It’s like that old quote about going bankrupt, first it happened slowly, then suddenly.

https://www.youtube.com/watch?v=gUkbdjetlY8

If you’re gonna shop Cramer clips, might as well show his take on SVB from about a month ago: https://twitter.com/WatcherGuru/status/1634246217226919937

(Spoiler: should have bought the inverse Cramer ETF…)

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#169

Post by stygiansonic »

rpeden wrote: post #112
phkahler wrote: post #100

Earlier quoted context omitted.

They don't create money, they loan out deposits. It's not as scammy as people think. You are free to put your cash in a mattress instead.

Sure, but loaning out deposits creates money, does it not? Most of that loaned out money is getting deposited into another bank account. And that deposited loan will (minus a percentage kept in reserve) get loaned out again. And so on, etc. I might be missing something important, though.

Yes that is roughly how it works.

https://en.m.wikipedia.org/wiki/Money_creation#Role_of_comme...

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#170

Post by xeromal »

briffle wrote: post #127
xeromal wrote: post #117

Earlier quoted context omitted.

Same here but SVB was the 18th largest bank in the US.

Can you name the 16th and 17th largest banks? Most of us can think of a few big ones, and a handful of local ones.

When I saw that they were insolvent, I looked up the bank rankings and saw their position. Out of the top 20, I am familiar with probably 14-15.
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