Global Financial Crisis (5 Viewers)
- Thread starter Dostoevsky
- Start date
I don't know. There's seemingly a lot of similarities in that it's a liquidity crunch at first glance. In 2008, liquidity dried up because bad bets had to be covered due to leverage. This time, liquidity is drying up because of higher interest rates system wide, driven by the Fed. We don't need massive investment banks like Bear Sterns, and really, all of the same names should have failed back in 2008. But a whole bunch of regional banks running into liquidity issues because of higher rates and consumers maxing out their debt? The latter scenario seems worse to me in terms of the real economy, IMO. Regional and smaller banks are the lifeblood of our credit based system.
Of course, it might just be SVB. Hopefully it is.
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Doubt it. If we have another liquidity trap that shit is going down. I will buy maybe around 3k or something.
Of course, it might just be SVB. Hopefully it is.
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Doubt it. If we have another liquidity trap that shit is going down. I will buy maybe around 3k or something.
Meh. I rate it a nothingburger.
This reads entirely like an over-optimized bank with insufficient asset and customer diversification to withstand niche industry-specific economic risks. Deal only with risky startups, collect their VC cash, and put it all in mortgage-backed securities.
This is what’s called not only putting all your eggs in one basket, but also getting all your eggs from the same chicken.
Mom and pop aren’t all running ChatGPT and crypto startups, bruh.
This reads entirely like an over-optimized bank with insufficient asset and customer diversification to withstand niche industry-specific economic risks. Deal only with risky startups, collect their VC cash, and put it all in mortgage-backed securities.
This is what’s called not only putting all your eggs in one basket, but also getting all your eggs from the same chicken.
Mom and pop aren’t all running ChatGPT and crypto startups, bruh.
Yes, there are dependencies. And perhaps there need to be more questions about banks holding zero reserves since Covid.
But the CEO telling everyone “don’t panic” during a bank rush was a complete own goal. And SVB was over-indexed on startup tech.
By Monday the assets will be sold off to a bank with greater diversification and resilience and just about everyone gets their money. And the only reason Roku would need to immediately access their last quarter of cash is for a bank rush. A company like that should not be living hand-to-mouth with no reserves. There’s no way Roku needs $1.9 billion to make payroll every month.
This to me is another prime example of Silicon Valley hubris that thinks a diversification strategy is wasteful when you can make tons more money on startups and crypto. These banks, and companies, deserve to die.
The only way this is a sign of contagion is if everyone has as much hubris as narrow-minded startup investors. Punish those self-important fools.
But the CEO telling everyone “don’t panic” during a bank rush was a complete own goal. And SVB was over-indexed on startup tech.
By Monday the assets will be sold off to a bank with greater diversification and resilience and just about everyone gets their money. And the only reason Roku would need to immediately access their last quarter of cash is for a bank rush. A company like that should not be living hand-to-mouth with no reserves. There’s no way Roku needs $1.9 billion to make payroll every month.
This to me is another prime example of Silicon Valley hubris that thinks a diversification strategy is wasteful when you can make tons more money on startups and crypto. These banks, and companies, deserve to die.
The only way this is a sign of contagion is if everyone has as much hubris as narrow-minded startup investors. Punish those self-important fools.
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I think the question is... how many other similar banks did not hedge against interest rate risk? Pretty sure the thought was don't worry, interest rates will remain low forever, and thus we don't care.
The scary thing is, the whole economy has been built on this premise, that interest rates would remain forever low. Do I think that out of all the thousands of financial services and banking firms out there that SIVB is the only one that didn't hedge? Pfff, I think not.
It's always smooth sailing until it's not.
The scary thing is, the whole economy has been built on this premise, that interest rates would remain forever low. Do I think that out of all the thousands of financial services and banking firms out there that SIVB is the only one that didn't hedge? Pfff, I think not.
It's always smooth sailing until it's not.
Bill Ackman is generally a hard to take proponent of bailouts, but he’s got some good points in here. Of course, they shouldn’t be bailed out, but there will be lots of contagion here IMO.
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The coolest thing I ever learned about in college, even more so than atmospheric physics, was the Black Scholes Model. Financial engineering is incredible.
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The coolest thing I ever learned about in college, even more so than atmospheric physics, was the Black Scholes Model. Financial engineering is incredible.
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Black Shoals is peak innovation
