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Bank run on Silicon Valley Bank

techcrunch.com

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Re: Bank run on Silicon Valley Bank

#131

Post by dylan604 »

phphphphp wrote: post #66
anon291 wrote: post #19

Earlier quoted context omitted.

Perhaps I'm overly skeptical, but everyone should know that all banks have the risk of 'if everyone takes their money out, the bank won't be able to make it work', right?

Sure, and everyone knows that their favourite person in the world could just run them over in a car and kill them in seconds, but if your best friend says to you, “you know, I could drive my car into you and you would die… your life could be snuffed out with a moments notice” you may start to question your friendship.

waiter, i'd like what they're having

Re: Bank run on Silicon Valley Bank

#132

Post by njarboe »

WJW wrote: post #80
antibasilisk wrote: post #55

[flagged]

Thing is, I want to start a business but need several hundred thousand USD in machinery. Lathes or bakery ovens are not free after all. I don't have that right now, and if I need to save up for several decades the opportunity will have passed. How do I convince people to lend me money without any interest? You can replace "want to start a business" with "want to buy a house" if you prefer.

If 30 year housing loans were not available, housing would be a lot cheaper.

Re: Bank run on Silicon Valley Bank

#135

Post by supernova87a »

chollida1 wrote: post #11

Shares just fell 60%, not this year, but today, which is the biggest drop I can think of. This is after a $1.25B common stock offering in an attempt to shore up its cash reserves. Keep in mind they are raising cash by selling equity with their shares at $100 when they were at $500 a less than a year ago. That's pawn shop levels of selling. To say they are in trouble is like saying it would be tough to sell a house th…

> That's pawn shop levels of selling. To say they are in trouble is like saying it would be tough to sell a house that is currently on fire.

"Motivated seller!" -- Lionel Hutz

Re: Bank run on Silicon Valley Bank

#136

Post by willmadden »

helsontaveras18 wrote: post #89
toss1 wrote: post #20

Seems like a good opportunity for Mercury. Been using Mercury for a couple of years, as a customer I can recommend their excellent support & services. That said, I know aprox zero of their balance sheet or those of their backing banks Choice Financial Group and Evolve Bank & Trust.

Mercury is great! I bank with them. But I'm not worried about Mercury, I'm worried about their partner bank. Anyone know if Evolve is in a similar situation?

Not to spread FUD, but a friend of mine shared this with me some time ago. It's a good article. I suggest reading it.

https://fintechbusinessweekly.substack.com/p/evolves-problem...

Re: Bank run on Silicon Valley Bank

#137

Post by FormerBandmate »

ncallaway wrote: post #78
FormerBandmate wrote: post #60

Earlier quoted context omitted.

This is how every bank has always worked since banks were invented

Yes, but it’s pretty much always been problematic when a bank leader has had to make a statement akin to “We’re fine as long as there’s not a run”. That’s the kind of thing that only gets said when there’s some concern that there will be a run.

They’re selling equity to get capital. That’s pretty dire straits, FTX was doing that before they went under (I’m not saying this is FTX, I’m just saying it can be akin to the nuclear option)

Re: Bank run on Silicon Valley Bank

#139

Post by mempko »

recursivedoubts wrote: post #21

Daily reminder that bank runs wouldn't be a thing if we did duration matching, forbidding banks from borrowing short and lending long. As always, the underlying problem in banking is that the banks are lying, telling two or more people they own the same dollar at the same point in time. If they locked deposits for a period of time they could safely (and morally) loan that money out without lying, and, in fact, there…

Banks don't loan deposits. You have it exactly backwards. Loans create deposits. Banks aren't intermediaries, but creators of money.

Re: Bank run on Silicon Valley Bank

#140

Post by yieldcrv »

carom wrote: post #4

Specific issues with SVB, not systemic. [1] 1. https://techcrunch.com/2023/03/09/silicon-valley-bank-firms-...

Okay so every bank faces the same vulnerability, which is that their bond portfolio has suffered major losses

The market was made aware of how deep the losses are, as this is not usually reported in investor disclosures and the bonds are usually held to maturity thereby not being subject to losses in their notional value

ANY bank with volatility in customer deposits is vulnerable to these losses as they have to sell the bond at its current value at a big loss to cover the customer withdrawal

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