Business/Markets/Stocks/Economics Random, Random

[ti-amie]

[ti-amie]

[ti-amie]

[ponchi101]

What will happen on Monday, when the markets open?

[ti-amie]

Exhibit A of failing up. Wherever he goes fraud miraculously appears.

[ti-amie]

Felix Salmon
@felix@saturation.social

Yellen was at pains to make a distinction between a bailout *of the bank* vs a bailout *of depositors* (which is what people want). This headline at the margin makes people more worried, but also helps frame a depositor bailout as, somehow, not-a-bailout https://www.huffpost.com/entry/janet-yelle

[ti-amie]

This guy wrote his own movie script.


Alexander Torrenegra
@torrenegra
Silicon Valley Bank was the main bank for two of our companies, my personal savings, and my mortgage. This is how things unfolded for us:

Between 2013 and 2023, all good.

Thursday, 9 AM: in one chat with 200+ tech founders (most in the Bay Area), questions about SVB start to show up.

10 AM: some suggest getting the money out of SVB for safety. Only upside. No downside.

10:50 AM: I read the messages in a bathroom break. Immediately cancel the meeting I had. Ask my wife, Tania, to wire all of our personal money out to other banks. Call my teams. Ask them to do the same. One of them, at the dentist, has to stop the procedure and run home.

11:10 AM: We can't get the money out of any of the accounts. For our personal savings, we don't have other bank accounts readily available. For one of the companies, the permissions are not set up to allow such a significant exit of money. We can only get half of the money out. We wire it to Ameritrade, as we don't have any other bank account set up. For the 2nd company, the banking credentials had been changed. I cannot log in.

11:15 AM: Tania gets a hold of another bank we were already talking to, UBS. Ask them to open a bank account pronto.

11:20 AM: I change the permissions for the 1st company. We request another wire out to Ameritrade for the remaining money from that company. We have to wait for the wires to get out.

11:25 AM: After a long wait, I get a hold of an SVB agent. They reset my credentials for the 2nd company.

~12:00 PM: All of my chats with tech founders in the US light on fire with what’s happening. Obviously, we have a bank runoff. Surreal.

12:30 AM: We request two wires for all the money from the 2nd company to Mercury.

12:38 PM: Wires to Ameritrade clear. The 1st company is safe.

12:45 PM: We sign dozens of documents -without reading them- and complete the opening of a personal bank account with UBS.

12:50 PM: Tania requests SVB, via their website, to wire all of our personal savings to UBS. Given the permission settings in place, they tell us that they have to call us.

1:30 PM: SVB is a solid bank. I know their CEO, Greg Becker. Great guy. I figure this is a temporary issue caused mainly by people panicking. They'll recover. I buy shares of SVB at what I consider significantly low prices.

2:09 PM: One of the wires for the other company clears.

~3:00 PM: My chats with tech founders from Latin America start to catch up.

4:05 PM: SVB calls us. Tells us that our savings will be wired the same day, as requested.

4:10 PM: We jump on a plane to fly back to San Francisco.

11:50 PM: We land. We learn that the 2nd wire for the 2nd company hasn’t cleared yet. Worst, the wire to get our personal savings out of SVB is still in the queue.

2 AM: Go to bed.

Friday 7 AM: Wake up. Nothing. SVB stock is 60% down overnight.

7:30 AM: Cancel all morning meetings to focus on the problem.

~8:00 AM: Learn that SVB is now controlled by the government. The shares I bought the day before are now likely worthless. I made a mistake.

9:00 AM: Host a town hall with my team. Explain what's happening. Answer questions.

All day long: Wait and cope with the anxiety. Help other entrepreneurs. Share what we know. Answer questions from investors.

~4:00 PM: Figure that the money for the company with the pending wire is safe. It will be available as of Monday. Unfortunately, for our personal savings, only a portion is safe. We may recover most of the money. The percentage, however, remains unclear. It may take years.

5:00 PM: Play with the kids. They help me forget about the material world.

At night: Reflect. "What did I do wrong?". "Am I good enough to do what I do?" Hug Tania.

Saturday: Figure there is nothing of value by focusing on the topic. It’s an externality. We shouldn’t invest too much time thinking about them. Or trying to predict the markets. Time to go back to what we can control: the execution of our companies.

Continue pushing forward. Persist. Persist. Persist.



TL;dr

Evan Hill @evanhill

The learn to code VC genius types wiped out their own troubled but probably ultimately solid bank because they were all in a group chat together and panicked.

[ponchi101]

So, if I am reading this well.
A SOLID back can go under in a matter of hours if, in a chat, a group of people question how solid it is and their default mechanism to protect assets is to take their assets in that bank out of the bank, because it is the safe thing to do (no downside) and, in doing so, they then create a runoff that does make the bank unstable, together with all their assets, which make them, at a minimum, place such assets at risk and, at a maximum, lose them.

Therefore: NO BANK IN THE WORLD is safe. Might as well turn all your assets to gold and bury them in the backyard.

Am I misreading this?

[ti-amie]

British Banks in Talks Over Rescue Plan for SVB UK’s Depositors
Big banks push for government guarantee to take on customers
Scheme is Plan B if hopes for a sale of SVB UK fall through

https://www.bloomberg.com/news/articles ... ify%20wall

Paywall

[ti-amie]

So, if I am reading this well.
A SOLID back can go under in a matter of hours if, in a chat, a group of people question how solid it is and their default mechanism to protect assets is to take their assets in that bank out of the bank, because it is the safe thing to do (no downside) and, in doing so, they then create a runoff that does make the bank unstable, together with all their assets, which make them, at a minimum, place such assets at risk and, at a maximum, lose them.

Therefore: NO BANK IN THE WORLD is safe. Might as well turn all your assets to gold and bury them in the backyard.

Am I misreading this?

Nope.

[ti-amie]

PRESS RELEASES
Joint Statement by the Department of the Treasury, Federal Reserve, and FDIC
March 12, 2023
WASHINGTON, DC -- The following statement was released by Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg:

Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.

After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.

Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.

The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.



###

https://home.treasury.gov/news/press-releases/jy1337

[ti-amie]

What will happen on Monday, when the markets open?

[ti-amie]

MARKETS
Regulators close New York’s Signature Bank, citing systemic risk
PUBLISHED SUN, MAR 12 20236:24 PM EDT UPDATED 1 MIN AGO

U.S. regulators said Sunday it shut down New York-based Signature Bank
, a second financial institution they shuttered after Silicon Valley Bank’s collapse.

“We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority,” Treasury, Federal Reserve, and FDIC said in a joined statement Sunday evening.

The banking regulators said depositors at Signature Bank will have full access to their deposits.

“All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer,” the regulators said.

Signature is one of the main banks to the cryptocurrency industry. As of Dec. 31, Signature had $110.4 billion in total assets and $88.6 billion in total deposits, according to a securities filing.

To stem the damage and stave off a bigger crisis, the Fed and Treasury created an emergency a program to backstop deposits at Signature Bank and Silicon Valley Bank using the Fed’s emergency lending authority.

The regulators shuttered SVB on Friday and seized its deposits in the largest U.S. banking failure since the 2008 financial crisis — and the second-largest ever.

This is breaking news. Please check back for updates.


https://www.cnbc.com/2023/03/12/regulat ... -risk.html

[ti-amie]

I would feel some kind of way if taxpayer money is used to bail out the "eff the system" "venture capitalists".

See next post.

[ti-amie]

So if the affected banks paid into this fund they should be okay I guess.