Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

SVB Financial: Blow Up Risk (2022)

seekingalpha.com

Post reply on HN
Print view View original

61–69 of 69 posts

Re: SVB Financial: Blow Up Risk (2022)

#61

Post by paulddraper »

hn_throwaway_99 wrote: post #53
paulddraper wrote: post #47

Earlier quoted context omitted.

> Articles like this are especially damning to the execs that sold stocks just a few weeks ago. You mean the reverse, right? You can't insider trade if it's not insider information! This article supports the execs, not damns them.

No. Because a short seller speculates the bank is in trouble doesn't mean it gives execs carte blanche to sell their stock. The "inside information" piece is exactly when SVB would need to do a highly risky capital raise, which SVB did (or tried to do) conveniently 2 weeks after the CEO sold millions.

Yes, the timing of the sale and raise it suspicious.

The existence of the article only hurts and not helps the insider trading accusation.

Re: SVB Financial: Blow Up Risk (2022)

#62

Post by thevagrant »

dboreham wrote: post #26

After reading this article my take on the situation substantially changed from the typical (here) "idiot bankers put all their assets in HTM instruments". ianab but I get the impression that when you're operating a bank you think of depositors and loans like a SaaS service would view subscribers. You want more deposits same as we want more subscribers. Having got more deposits you set about lending the money in order…

I think you're right. They did not understand the needs of their customers (companies) that contributed the bulk of their deposits.

They were not assessing the risks and changes occurring in the market that could affect the behavior of their primary customer base.

I read they went 8 months without someone in charge of risk management, so it appears this is completely an own goal.

Re: SVB Financial: Blow Up Risk (2022)

#64

Post by sealeck »

mikeyouse wrote: post #59
IrnBru wrote: post #51

Earlier quoted context omitted.

That is irrational behaviour. Depositors should spread their cash across multiple banks. This is very basic risk management.

I’m just telling you what I’m seeing.. The “multiple banks” will be the few biggest ones, even if it’s 1/10th of their funds, nobody will accept the risk of a smaller bank.

Except that it's not quite so trivial to open an account at a new bank (especially if everyone decides to do it at the same time) and move US$15 billion dollars by the end of Monday.

Re: SVB Financial: Blow Up Risk (2022)

#66

Post by personomas »

dboreham wrote: post #26

After reading this article my take on the situation substantially changed from the typical (here) "idiot bankers put all their assets in HTM instruments". ianab but I get the impression that when you're operating a bank you think of depositors and loans like a SaaS service would view subscribers. You want more deposits same as we want more subscribers. Having got more deposits you set about lending the money in order…

Especially with more and more companies leaving (and start-ups not staring in) Silicon Valley.

Re: SVB Financial: Blow Up Risk (2022)

#67

Post by mikeyouse »

sealeck wrote: post #64
mikeyouse wrote: post #59

Earlier quoted context omitted.

I’m just telling you what I’m seeing.. The “multiple banks” will be the few biggest ones, even if it’s 1/10th of their funds, nobody will accept the risk of a smaller bank.

Except that it's not quite so trivial to open an account at a new bank (especially if everyone decides to do it at the same time) and move US$15 billion dollars by the end of Monday.

I opened a new business account at Wells last fall, it took maybe a week to apply and get approval? In any case, many companies have multiple banking relationships already - if I were in their shoes I’d be moving all of the excess funds to the biggest bank available.

It’s not fair to the well managed small banks but honestly I don’t care at all about my bank, I just want to pay bills. I’d bank at the Federal Reserve if they offered an interest free checking account with unlimited bank insurance.

Re: SVB Financial: Blow Up Risk (2022)

#68

Post by ADefenestrator »

therealcamino wrote: post #32
latchkey wrote: post #30

Two more followup articles from the same author that are good reads as well (along with a bit of well deserved gloating)... https://seekingalpha.com/article/4586033-svb-financial-blew-... https://seekingalpha.com/article/4586342-svb-financial-today...

I have to say, the articles in Seeking Alpha are so uneven that I never read the when they pop up in a news feed. The original article is pretty startling in how accurate it was (even if it was more concerned about the loans than the mortgage-backed securities.)

Yeah, even in a case like this where they turned out to be right, it might be one of those "predicted 15 out of the last 2 recessions" sorts of things.

Re: SVB Financial: Blow Up Risk (2022)

#69

Post by therealcamino »

ADefenestrator wrote: post #68
therealcamino wrote: post #32

Earlier quoted context omitted.

I have to say, the articles in Seeking Alpha are so uneven that I never read the when they pop up in a news feed. The original article is pretty startling in how accurate it was (even if it was more concerned about the loans than the mortgage-backed securities.)

Yeah, even in a case like this where they turned out to be right, it might be one of those "predicted 15 out of the last 2 recessions" sorts of things.

Ha, very true...
Post reply on HN