Who Else Is Ready For The Banking Crash And Ensuing Bailouts?

[Thoughtful Monk]

Considering Sanders won't be bailing anyone out, let's move on.

Did a quick review of the financial news this morning from multiple sources. Points that stuck out to me: the three banks involved were all heavily involved in the tech sector. This may actually be a sign that a tech bubble is collapsing. Two were heavily involved in crypto so this may be the crypto issues moving over to traditional financial businesses. Finally, some sources are saying this months projected Fed increase is back to 25 bps at max and may be totally off the table.

Also interesting, all three banks started with the letter 'S'.

[Sparko]

Also interesting, all three banks started with the letter 'S'.

Soros!!!!

[seer]

Stocks of multiple banks get halted for volatility, more than once, to start the trading day

To gauge the panic-like activity of bank investors in the wake of the recent failures of SVB Financial Group’s SIVB, Silicon Valley Bank and Signature Bank SBNY, -22.87%, investors can check out the Nasdaq’s “Current Trading Halts” page. Multiple banks have had their stock halted for volatility, some more than once, since the opening bell. Among some of those that have already been halted at least twice, shares of Western Alliance Bancorp WAL, -52.82% plummeted 78.2%, Regions Financial Corp. RF, -5.87% sank 15.6%, First Republic Bank FRC, -62.46% plunged 65.5%, Comerica Inc. CMA, -14.69% tumbled 39.4% and PacWest Bancorp. PACW, -20.73% took a 47.7% dive. The selloffs come as the S&P 500 SPX, 0.72% inched up 0.1%, erasing an earlier drop of as much as 1.4%.

https://www.marketwatch.com/story/st...g-day-7002dcca

[Thoughtful Monk]

Stocks of multiple banks get halted for volatility, more than once, to start the trading day

To gauge the panic-like activity of bank investors in the wake of the recent failures of SVB Financial Group’s SIVB, Silicon Valley Bank and Signature Bank SBNY, -22.87%, investors can check out the Nasdaq’s “Current Trading Halts” page. Multiple banks have had their stock halted for volatility, some more than once, since the opening bell. Among some of those that have already been halted at least twice, shares of Western Alliance Bancorp WAL, -52.82% plummeted 78.2%, Regions Financial Corp. RF, -5.87% sank 15.6%, First Republic Bank FRC, -62.46% plunged 65.5%, Comerica Inc. CMA, -14.69% tumbled 39.4% and PacWest Bancorp. PACW, -20.73% took a 47.7% dive. The selloffs come as the S&P 500 SPX, 0.72% inched up 0.1%, erasing an earlier drop of as much as 1.4%.

https://www.marketwatch.com/story/st...g-day-7002dcca

I'm not familiar with several of these. Except for Regions, they all seem to be west coast banks.

[Thoughtful Monk]

To add to the thread title, "Are you ready for more consolidation in the banking industry and the big banks getting bigger?"

[seer]

I'm not familiar with several of these. Except for Regions, they all seem to be west coast banks.

It is still bad, and may spread...

[seer]

A great explanation by Ben Shapiro quoting the Wall Street Journal

[seanD]

Considering Sanders won't be bailing anyone out, let's move on.

Did a quick review of the financial news this morning from multiple sources. Points that stuck out to me: the three banks involved were all heavily involved in the tech sector. This may actually be a sign that a tech bubble is collapsing. Two were heavily involved in crypto so this may be the crypto issues moving over to traditional financial businesses. Finally, some sources are saying this months projected Fed increase is back to 25 bps at max and may be totally off the table.

Also interesting, all three banks started with the letter 'S'.

Sanders isn't important, but the "let's blame Trump" false argument he's making is important because they seem to be latching onto that as the cause, which just deflects from the real reason this is happening. It's the same thing they were doing to deflect from the real reason why inflation happened when they called it the "Putin price hike." Not only is that not cause, but we don't need more government regulation as they're arguing.

[seanD]

A great explanation by Ben Shapiro quoting the Wall Street Journal

I hate to say it, but he's not entirely correct. SVB didn't take huge risks. Had they bought all sorts of high yielding derivatives would have been risky, but they actually bought long term low yielding government bonds (treasuries), which are considered the "safest" assets you can invest in. The mistake they made was not realizing inflation would become a problem and the Fed would eventually have to raise interest rates to fight inflation. They thought inflation wouldn't be a problem and the Fed would keep interest rates low forever. However, you can't really blame them for that either, because the "experts" (i.e. Janet Yellen, Jerome Powell, et al) were telling them inflation wouldn't happen, and when it did, that it was just transitory.

[Sparko]

So two conflicting news stories:

US regulators say SVB customers will be made whole as second bank fails

In a joint statement Sunday, Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and Federal Deposit Insurance Corporation Chairman Martin J. Gruenberg said the FDIC will make SVB and Signature’s customers whole. By guaranteeing all deposits – even the uninsured money that customers kept with the failed banks
https://www.cnn.com/2023/03/12/inves...out/index.html

Treasury Secretary Janet Yellen says U.S. government won’t bail out Silicon Valley Bank

“Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out, and the reforms that have been put in place means that we’re not going to do that again,” Yellen told CBS’ “Face the Nation.
https://www.cnbc.com/2023/03/12/trea...lley-bank.html

So what are they meaning? That they will take over the bank after paying the losses?

[seer]

Whew - everything is OK...

Biden says Americans should 'feel confident' in banking system after federal response to SVB collapse

President Biden says the bank failures will not cost taxpayers money

President Biden says Americans should "feel confident" in their banking system after his administration's response to the collapse of Silicon Valley Bank (SVB) and Signature Bank last week.

https://www.foxnews.com/politics/bid...e-svb-collapse

[seanD]

So two conflicting news stories:

US regulators say SVB customers will be made whole as second bank fails

In a joint statement Sunday, Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and Federal Deposit Insurance Corporation Chairman Martin J. Gruenberg said the FDIC will make SVB and Signature’s customers whole. By guaranteeing all deposits – even the uninsured money that customers kept with the failed banks
https://www.cnn.com/2023/03/12/inves...out/index.html

Treasury Secretary Janet Yellen says U.S. government won’t bail out Silicon Valley Bank

“Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out, and the reforms that have been put in place means that we’re not going to do that again,” Yellen told CBS’ “Face the Nation.
https://www.cnbc.com/2023/03/12/trea...lley-bank.html

So what are they meaning? That they will take over the bank after paying the losses?

I think they're saying they're only going to "bail-out" the depositors while allowing the bank itself to fail, instead of just giving the banks billions of dollars so they don't collapse like they did in 2008, which is actually what they should have did in 2008, and is mystifying why they didn't do it that way.

[Sparko]

I think they're saying they're only going to "bail-out" the depositors while allowing the bank itself to fail, instead of just giving the banks billions of dollars so they don't collapse like they did in 2008, which is actually what they should have did in 2008, and is mystifying why they didn't do it that way.

So you are saying that Biden's administration is actually going to do something right this time? Or at lease is claiming they will?

[seer]

I hate to say it, but he's not entirely correct. SVB didn't take huge risks. Had they bought all sorts of high yielding derivatives would have been risky, but they actually bought long term low yielding government bonds (treasuries), which are considered the "safest" assets you can invest in. The mistake they made was not realizing inflation would become a problem and the Fed would eventually have to raise interest rates to fight inflation. They thought inflation wouldn't be a problem and the Fed would keep interest rates low forever. However, you can't really blame them for that either, because the "experts" (i.e. Janet Yellen, Jerome Powell, et al) were telling them inflation wouldn't happen, and when it did, that it was just transitory.

But didn't the wizards at these banks see the interest rates going up? Didn't they know that would tank bonds?

[seanD]

So you are saying that Biden's administration is actually going to do something right this time? Or at lease is claiming they will?

Personally, I don't believe government should get involved in private businesses at all. If folks are ignorant about finances and get burned, that's on them. Anytime government gets involved, it disrupts the financial balance of everything, not the least of which opens the door to reckless moral hazard. But, yeah, this is obviously much better than the atrocity they committed in 2008.