He is shorting?
no, he's snorting ...
Bill Ackman: I expect there will be bank runs beginning Monday at non-SIB banks
31–40 of 52 posts
Re: Bill Ackman: I expect there will be bank runs beginning Monday at non-SIB banks
#32There's only one way to fix this folks. We need to abolish the FDIC and use the money saved to give a tax cut to the rich. The rich then trickle down onto the failing banks and their depositors to resolve this problem.
Re: Bill Ackman: I expect there will be bank runs beginning Monday at non-SIB banks
#33fake billionaire who specializes in losing other people's money has an opinion. good for him.
Maybe but people listen to him. In olden days Runs started with whispers. Now tweets.
Let’s see his short positions.
Re: Bill Ackman: I expect there will be bank runs beginning Monday at non-SIB banks
#34I expected more of this as well. What are the odds that SVB was the only bank to make this mistake?
Re: Bill Ackman: I expect there will be bank runs beginning Monday at non-SIB banks
#35Let's say you're a company with well over the 250k limit on a bank account. How would you even withdraw that? Get it deposited on some other account (why trust the other bank more?), get the money in cash?
open additional bank accounts at other institutions until it is under 250k per account, or simply one account at a big 4 bank
the transfer should occur by wire transfer
go to the institution to accomplish the higher value wire transfer, there is no shortcut if you aren't using a bank that specifically made this easy (like SVB or First Republic Bank)
Re: Bill Ackman: I expect there will be bank runs beginning Monday at non-SIB banks
#36I expected more of this as well. What are the odds that SVB was the only bank to make this mistake?
JP Morgan's report addresses this (assuming it's comprehensive)
>SIVB was in a league of its own: a high level of loans plus securities as a percentage of deposits, and very low reliance on stickier retail deposits as a share of total deposits.
https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/ins...
Re: Bill Ackman: I expect there will be bank runs beginning Monday at non-SIB banks
#37Capitalism on the way up, socialism on the way down
It’s still capitalism if you add guard rails and insurance. There is no reason to promote or allow bank runs. It doesn’t benefit anyone. The FDIC insurance cap should be increased and pegged to inflation and cover 90% of deposits. Then there should be additional voluntary insurance that could be purchased above that limit.
Re: Bill Ackman: I expect there will be bank runs beginning Monday at non-SIB banks
#38Even though I dislike this guy, he is not wrong. First Republic is most certainly going into receivership tomorrow.
He is (likely self-interestedly) angling for a system-wide guarantee on uninsured deposits. He's pretending something like this is true: SVB's failing will have a contagion effect on other banks (though some mechanism that he doesn't explain or have evidence for, although guys like him menacingly gesture towards MBS or something to remind us of 2008, even though it's completely different). By stopping the SVB run, we…
Even if it doesn’t create contagion it may wipe out a generation of start ups and destroy trillions of dollars of value that will be created in 10 years, destroying the most valuable ecosystem the world has ever seen and all just at the time AI is about to lead to the next revolution and economic transformation.
Given these implications, the policy choices are easy. Why allow these long term consequences in the name od stiffing depositors?
Re: Bill Ackman: I expect there will be bank runs beginning Monday at non-SIB banks
#39Even though I dislike this guy, he is not wrong. First Republic is most certainly going into receivership tomorrow.
That's the rumor and I imagine they got to pull the same tricks as SVB as regards to buying risky MBS without alerting the FED. But is there any evidence to support this?
They didn’t buy risky MBS. They bought standard vanilla MBS and Treasury Bonds. The problem is the speed of interest rates rising which cause 2 unrelated circumstances to hit at the same time. 1. The net present value of the long term MBS/treasury’s went down. 2. Start ups had trouble raising capital so their normal business activities shifted from net inflows to SVB to net outflows.
So instead of being able to hold to maturity, SVB had to sell assets they bought for $100 for $80. Perhaps they could have hedged against interest rates rising better than they did or had a more short term securities or capped account balances. But the fed could have been faster to act in raising rates to allow for more gradual in raising rates as that would have been less disruptive.
Now the Fed should set up a program to take these long term assets off of member banks balance sheets. Do so at a discount, make the members pay for their bad investments but prevent failures.
Re: Bill Ackman: I expect there will be bank runs beginning Monday at non-SIB banks
#40Earlier quoted context omitted.
Every bank run leads to this exact conspiracy theory.
So why do there seem to be runs against other banks being encouraged now? It's the induced panic that can do damage... in stampedes or bank runs.
People feel smart when they predict bad things. Fear is an animating force for the human brain both when felt personally and when triggered in others. Some people get off in triggering fear in others.