My eyesight rapidly deteriorated once I reached the second paragraph.
That can be cured with money.
A SVB short seller explains red flags he saw months ago
121–130 of 186 posts
Re: A SVB short seller explains red flags he saw months ago
#122Isn't the question though, if you acted on the set of companies/banks that were showing these signs, how often would you be right and saved your money (or made money)? The analyses that tell you what led to a particular crash are hard to stomach as a reliable bet for the next time. I just saw this story: https://www.morningstar.com/news/marketwatch/20230310718/20-... ("20 banks that are sitting on huge potential secu…
I think Ally is very focused on auto loans, so again industry concentration. They raised the rate they pay on their savings accounts yesterday.
Will be interesting
Re: A SVB short seller explains red flags he saw months ago
#123My company has seen quite a few sell side analysts talking about SVB earlier this year, so I guess the risks were not unknown to financial markets. Problem is, we are in a scenario of great macroeconomic uncertainty. That can make borrowing costs (needed for shorting something) quite high, because everyone and their moms want to protect themselves from market downturns. So even if you guess correctly that some compan…
“Markets can remain irrational longer than you can remain solvent“. This was also the case with Burry and others shorting in 2008.
Burry got lucky but has been wrong more recently.
He’s basically an investment doomposter.
Re: A SVB short seller explains red flags he saw months ago
#124>>>don’t know how it all shakes out, or at the end of the day where that money ended up and where it went,” he says.
I'm going to take a stab - the money ended up at the issuer tbill or mbs, that has been funding the profligacy of the feds with very low interest rates.
In the meantime, fed stakeholders will declare a dividend and pay themselves for the priviledge of keeping musical chairs going
Re: A SVB short seller explains red flags he saw months ago
#125key 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…
Where did the $32B value come from?
80 - 40 - ?
Re: A SVB short seller explains red flags he saw months ago
#126Earlier quoted context omitted.
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.
If someone had deposited $20 billion last Monday, they would have been fine. In a way, it did depend on money flowing in exceeding money going out.
A $20 billion deposit would have saved them, yes. But that doesn’t make it a pyramid scheme. $20 billion can fix a lot of problems.
If a person is on the verge of bankruptcy and they get a cash infusion that saves them, they have not magically become a pyramid scheme. The fact that money helps fix a massive financial problem does not indicate something is a pyramid scheme, just that they have a massive financial problem.
Re: A SVB short seller explains red flags he saw months ago
#127I remember listening to an episode of Odd Lots a couple of months back discussing how someone was using the the Fed Discount Window. https://podcasts.google.com/feed/aHR0cHM6Ly93d3cub21ueWNvbnR... I'm not finance savvy enough to determine if this fits, but I've been wondering if some kind of event might follow
Amusingly the interest rates episode from a couple weeks ago got into the relationship between deposits, customer interest rates, and rising rates on assets:
https://podcasts.google.com/feed/aHR0cHM6Ly93d3cub21ueWNvbnR...
Re: A SVB short seller explains red flags he saw months ago
#128Earlier quoted context omitted.
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…
I mean I can give you that strategy right now: go buy index funds. 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 ev…
If you are short via options you have limited risks but you pay the premium
Re: A SVB short seller explains red flags he saw months ago
#129So when you short like that there is no risk for you as a borrower other than if the assets go higher?
Do you need to have enough assets to cover a x-times the price of the stocks to insure your position?
Re: A SVB short seller explains red flags he saw months ago
#130Short seller seems to have a pretty sober take on the reality of it all.
Reminds me of "just don't fucking dance." https://www.youtube.com/watch?v=7eYcWpgCb7o