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I believe to frustrate search engines attempts to give answers to users without them opening your link.
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The first paragraph of this article is unnecessary.
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For most people news is entertainment and strongly dislike the “just the facts” bulleted writing style.
Shocking to me how much of the public don’t understand that modern news is literally just entertainment for bored masses. I got chastised for saying this in company not long ago and responded with “don’t blame me, you’re the one obsessed with endless tragedy porn” which didn’t go down well. Objective, informative, relevant news is long since dead if it ever existed at all.
Isn't it some kind of survivorship bias to ask the winners of such bets afterwards?
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I don’t know if he consistently made bad predictions, but he had a few howlers during the 2008 global financial crisis. He very loudly declared on his TV show that Bear Sterns was safe on the eve of its collapse: https://youtu.be/V9EbPxTm5_s
A couple days ago he told his audience to sell Bitcoin for USDC, a day later USDC had a -15% depeg event. Yes, he is a comically bad signal.
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“Markets can remain irrational longer than you can remain solvent“. This was also the case with Burry and others shorting in 2008.
One may argue the markets were irrational during the ultra low interest rate period and this disaster here is the result of hoping they would return to irrational before liquidity ran out.
Many of the things happening today are contradictory, but eventually a domino falls to topple everything else. Knowing which domino does that would make you lots and lots of money, albeit maybe with some guilt as everyone else suffers.
So basically the rapid increase in interest rates combined with lack of diversity in the bank’s clientele and investment choices quickly turned SVB into a collapsing inadvertent pyramid scheme?
It's not a pyramid scheme. A pyramid scheme can only continue it people keep putting money into it. SVB didn't need more money coming in, they just couldn't handle money coming out.
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Generally yes, that’s how engineers figured out where to reinforce war planes so they could survive longer in battle. In markets the loser’s reasoning often comes down to poor timing. They see similar red flags but can’t quite catch the right time. Predicting markets is relatively straightforward, predicting when something will happen is infinitely harder :)
I take issue with the characterisation of "poor timing" which makes it sound like a matter of accurately predicting an event occurring at some instant in time. Failure to do that teaches us comparatively little, much like failure to win the lottery. In reality, it's about picking a position that one can hold through various trajectories and that is profitable in most of the more likely ones. If one has assessed the a…
You can be right 99% of the time and still lose money because the market always rewards based on risk. Conversely you can be right 30% of the time and make billions.
With market timing you don't need to predict the instant something will happen, your time horizon really should depend on what your drawdown is. The predictions don't have to be single events, it can be a market environment. Timing a bear market when everyone is bullish, etc...
Every time you short the market you effectively open yourself to infinite loss, whether you are leveraged or not. There are effective hedging strategies in place, but unless you're doing this for a living or a very serious hobby, its tough to figure all the pieces out. That is why staying on the buy side can be pretty helpful for not losing one's shirt.
key grafs As of Dec. 2021, SVB’s interest expense on its deposits was $62 million. By Dec. 2022, it was $862 million. By the end of this year, Wettlaufer was projecting it to be nearly $4 billion. When Silicon Valley Bank posted its annual report at the end of last month, non-interest-bearing deposit levels were clearly deflating. And it seemed like those figures would keep falling. Wettlaufer was projecting non-inte…