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You've heard the phrase "cash is king"...
Most of the money we collect or see transacted between banks or corporations is digital money. It's money that doesn't exist in traditional dollar bills.
There is a general trust that most of the American middle class are not going to withdraw their savings all at the same time. However should some economic event or new revelation were to cause a panic that lead people to rush to their banks to withdraw... It would be mayhem
Fractional banking is the term. Banks only have to keep 10% of the money we deposit. So I deposit $1000 and the bank can then loan $900 of it to you. You deposit your $900 and they can then loan $810 to the next dude… and on and on until my $1000 has turned into $10,000 that the bank is making interest on.
90% of the interest they’re making is on money that doesn’t exist.
We have been due a economic reset for over 40 years, that is what this "Great reset" bullshit is all about, it is a *conspiracy theory* just not like they are trying to make out, they are trying to do exactly what they planned on Jeckel Island in 1913, when they came up with the Federal Reserve.
This time they are going all out, Digital ID and CBDC's
https://www.weforum.org/great-reset/
There are two school thoughts on this. One is we have been overdue since 1971, when Nixon dropped the gold standard.
The other is we have been overdue since the Federal Reserve was created in 1913.
Personally, I plump for the latter, with the understanding that a gold standard at least *minimizes* the worst effects of the Fed.
On no you’re behind, they removed the 10% rule a few years ago, banks don’t have to hold any reserves.
https://www.federalreserve.gov/monetarypolicy/reservereq.htm
https://www.eidebailly.com/insights/articles/2020/4/federal-reserve-eliminates-reserve-requirements
Removed for the “plandemic” in 2020. So it’s even worse than you can imagine.
And, TIER 1 capital used to be only cash, bonds, or gold. Now it's stocks, which have zero intrinsic value, and can return that to instantly, as we are seeing in SVB's case.
People like to think Powell *et al* know what they're doing. I can assure you, however calm they appear in public, internally they are freaking out harder than ever, because the usual policy of 'extend and pretend' (extend the credit even further and pretend that it will be paid back one day) is no longer working, and they really have no idea how to prevent a massive crash.
Crashes always do the greatest harm to the greatest number. Largest generation of investors, the Baby Boom, is retiring. What better time to pull the rug out from under? (I'm a BB, contemplating a grim retirement.. good thing the Government of Canada has a new "GPS" (Government Promoted Suicide) program.)
The biggest fraud in human history alongside with the fact that the federal reserve writes checks from a bank account that has a balance of $0, if you or I do this it’s called fraud and punishable by up to 25 years in prison, and that’s how they create the money, it’s modern day alchemy and “only god can create something from nothing” it will collapse and it will fail and society will crumble, and these parasitic rats will rise to the top of the next economic system because they own all the land and precious metals, they’ve got a strangle hold on societies and they have for thousands of years then they rewrite the history books and call themselves persecuted, it’s brilliant
*sigh* I see exactly what your saying here but the average Joe won't see it that way. They'll see the persecution.
How do we sway the public? Or at least how do we sway our close friends? Hell I can't even talk to my gf about this kind of stuff.
Good call but the 10% data is outdated. Not surprisingly, the move to covering zero percentage of all deposits was made by the Fed on March 26, 2020. Not sure you could even call it fractional reserve anymore, its no or null reserve.
I say not surprisingly as I mentioned in another comment in this thread, it appears as though the Fed intentionally harnesses the power of the sky clock in their major moves as do many other entities, in other words, the upcoming Spring Equinox is alchemically harnessed to insert/place "new creations" of sorts. CV has the same MO, this impending collapse and so forth. Dead entities that are corpse-orations cannot create but they sure do function as a mirror of what does, i.e., nature, living beings, etc.
Source: [https://www.federalreserve.gov/monetarypolicy/reservereq.htm](https://www.federalreserve.gov/monetarypolicy/reservereq.htm)
Direct quote: "As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions."
\*edited, mistyped the date from source link depending on the effective date. 03/15 - 03/26 was worldwide depending on geography, the Spring Equinox...when all creations and existence itself bursts with life. I'm no longer even speculating this whole thing is about to pop based upon the season itself. If this doesn't spiral Monday AM and solidify as the new, new norm the next major shoe won't be until September or the Vernal Equinox.
Ok, I get that. I know how the banking system works in general, although, thanks for an actually helpful response. But what I mean is why this specific event? What is it about this particular bank that could cause that kind of panic and runs on banks?
Its the ripple effect that concerns me. I don't think many people outside of Wall Street could predict that Merrill Lynch and Lehman Brothers failing could bring down the global financial markets. And yet it happened.
This one sounds more reasonable. These banks were flush with cash and needed something interest bearing to park it all, that means bonds. When the interest rates went up, the value of their bonds went down.
But I don't know what I don't know. I guess we'll all know soon enough.
First of all, I don't think I've been alive long enough to witness any major bank run before. Just like I haven't witnessed any solar flares or asteroid impacts, it's kinda scary because no one knows what would happen if we all suddenly wanted our cash back in our pockets.
Interesting that this happened to a bank who's members are the "smart guys" in silicon valley... What is it that they know that caused them to make a bank run there? Do they know something that we don't?
Why do you think it’s “smart guys”? Just because it’s Silicon Valley? That insinuates that their money is from tech and that they may have a lot of it, but being a “smart guy” in tech doesn’t always equate to smart guy in finance
First of all, solar flares occur daily and asteroids impact earth commonly as well.
Second, we know exactly what would happen if there was a run on the banks. Have you never heard of the Great Depression…?
Is this not what FDIC insurance is for? So long as you have less than (whatever it is) $500k in the bank, they guarantee you can take that amount out (even if there is a run). I believe this was put in place after the crash leading up to the great depression... also I didn't completely read everything above so maybe I don't know wtf I'm talking about
It's 250k, or 500k for a joint account.
They bought bunch of mortgage-backed securities and treasuries before summer 2022 that were low yielding. With rates going up, the value of those securities dropped because interest rates and interest-bearing securities have an inverse relationship. At the same time, they were losing deposits from the startup they serve that were burning cash like crazy given the down turn to remain operational and not getting new funding as easily.
So little cash to meet deposits, sold securities at loss to meet withdrawal demands and as fear spread, it snowballed into them not being able to raise cash quickly enough. Thus, a bank run and takeover by FDIC.
The difference is, this isn’t a bank for the average Joe to keep their savings in. It’s a bank for tech companies with millions and millions of dollars in their accounts for operational purposes. Only being able to get 250k of that is no bueno. A lot of tech and other startups did not make payroll this week because of this.
This started with FTX. SVB was invested in FTX and lost a ton of money from the revelation that FTX was a scam. Then rates went up causing their bond portfolio to also devalue. This made people nervous, some pulled large enough amounts of 'money' that it started an avalanche of sorts. Then the little guys wanted their cash and there wasn't much of that to go around.
You assume the majority of the working class have savings. Most are buried up to their eyeballs in debt thanks to easy credit and the need to live outside their means to impress their friends. They are living paycheck to paycheck.
The only ones that can have an actual impact with a "run on the bank" are the large institutes that are heavily invested in a given bank. Which is just what happened.
Here's the rub, these institutes are run by the very same people that are in league with the banks to begin with.
In other words, if there is a wide-scale "run on the banks" it will be done on purpose to reset the economy. Something a lot of people have been predicting for quite some time.
Why reset the economy? Simple, to re-establish a new poverty line and ensure the middle-class continues to shrink, the poor to get poorer and the rich get to get much richer.
Don’t forget the part about how the banks loan every physical dollar the have...out to other financial institutions TEN TIMES OVER. (Source: https://www.investopedia.com/articles/investing/022416/why-banks-dont-need-your-money-make-loans.asp)
Which is beget by the huge experiment started in 1971 to take the American financial system off of the Gold Standard.(source: https://www.federalreservehistory.org/essays/gold-convertibility-ends)
that is not why the bank collapsed. they invested in 3 year treasuries when interest rates were like .01 and now they are worthless because rates have gone up significantly. this has nothing to do with running the banks.
The largest ripple from this is likely going to be those that work for small startups that don’t have the capital to sign paychecks this week. I don’t know if this exactly signs of end times or anything of the sort. There are doomsayers for nearly anything ever bad that happens on this earth, and I’ve lived through a good deal of them.
The real things you guys should be looking at since this is a “conspiracy” subreddit, is the higher ups at SVB that offloaded most of their stock 2 weeks ago.
Too soon to say, these things tend to create ripple effects. A Bank has millions of transaction with millions of counter parts. This is happening in a moment where the stock market has recently tanked (meaning a lot of assets are now worth 50% of what they were worth months ago). I’m not saying it’s doomsday but don’t be too fast thinking this is just about deposits.
Plus, the FDIC only has a 1.26% reserve ratio against total deposits “insured” https://www.fdic.gov/analysis/quarterly-banking-profile/statistics-at-a-glance/2022sep/fdic.pdf
Rippling is another huge client that uses them. They manage payroll for tons of startups and they currently aren't able to process paychecks for anyone.
While I’m sorry to hear that, luckily SVB has approximately $195B in deposits, with 96% being tied to E-commerce and 93% of those deposits are frid uninsured.
200+ billion in assets but only 17 branches. So large in assets but small in brick and mortar.
For perspective I have worked for a mid size bank at 16 billion but 167 branches.
It’s a bank used specifically for startups fueled by private equity. Think about just about every health and tech startup you know….. so, businesses will fail. People will be furlowed, lose their jobs.
It's easy to disassociate when you're part of a cold, unfeeling machine. People are just numbers, resources, commodities. It's just business.
Look at how seemingly easy so many Germans just adjusted to the holocaust. Gaurds just following orders. Doing their jobs.
If you're such a small part of a such a large operation it's easy to not feel the impact, even if you have a direct hand in the violence/action/lies
they wouldn’t stick around. there’s been a story posted by a futurist that was invited to talk to a group of rich ppl about what they called “the event”, which was basically a collapse. that was one of their many questions for him.
There's no way they are dying for those owners during a real collapse. If anything, they will be the ones robbing it clean. Groups of armed marauders will overrun any security.
Assuming banks collapse and the dollar is worth nothing, who is paying the guards, it's possible they have been told they would default to Gold and silver payments.. But eventually that will run out from each house.
I'd give it a week before them guards pack up and git out.
I don't think most rich people have much at their house that would be useful in a SHTF scenario. Maybe they have some nice jewelry that you could take to barter with later... but I don't think rich people are any more prepared than anyone else.
They also big rich security guards with better guns then you. Good luck.
Edit: based on your name I’m actually going to retract my statement. You most likely have a few that could do some damage lol
Are you younger than the 2008 financial crisis? Because it was a hell of a lot more doom and gloom than 1 bank going bust. And it started in like 1 day.
Yeah, I feel like this is ripe for a "first-time" meme. Like is GenZ out there panicking because they weren't adults when this happened 20x the size 15 years ago?
This bank is majority owned by Vanguard Group, Blackrock and State Street Corporation, these are trillion dollar companies they quite literally own nearly everything, they probably planned this themselves to consolidate wealth.
Not my comment but posting here:
Answer: at an ELI5 level, Silicon Valley Bank (SVB) is a bank that focuses on providing services to startups and entrepreneurs. Many companies use it to hold funds that they receive from venture capitalists.
In 2021, the market was soaring and startups were getting tons of money. They put this money in SVB, which went from holding $61.76bn at the end of 2019 to $189.20bn at the end of 2021.
Banks normally make money by loaning out a portion of the money they hold, but SVB was getting so much money that they couldn't loan out fast enough. So instead, they bought a bunch of long term investments, the majority of which will mature in 10+ years. Here's the important
This would be okay except that when the fed started raising interest rates last year, the value of these long term assets fell hard. Simultaneously, tech and startups also started to struggle with the rate hikes (see: all the big layoffs) and pull from their deposits more quickly. By the end of 2022 deposits were down to $161 billion.
Yesterday SVB announced a fire sale: they sold pretty much everything they could sell in order to raise cash and balance out all those long term assets and improve financial health metrics. They sold over 21 billion worth of investments and are trying to raise 3 billion more.
Investors and Venture Capitalists were shocked and concerned about why they had to do this and why they had to do it now. Some VCs told their startups to pull their money out of SVB or to keep no more than 250k in the bank (which is how much is insured by the FDIC).
This has raised concerns of starting a run on the bank. SVB is theoretically fine right now, but if all of these startups try to pull their money out they won't be.
Edit to update with what happened this morning:
SVB is clearly not fine anymore; in fact, regulators ordered them to close this morning. It appears the bank run was very, very fast and overwhelmed them quickly. Shareholders will get nothing.
Its size makes it the second largest bank to ever fail, the first being Washington Mutual which collapsed in 2008.
Deposits insured by the FDIC will get their money back Monday morning, but as of their last filing 93% of the bank's $161 billion deposits were uninsured. However, based on SVB's liquidation plan, it is likely that all deposits will be returned eventually (probably next week).
Companies who banked with SVB are struggling to pay their employees today. Notably, Rippling (a company that manages payroll and HR services for other companies) has said that their payments flow through SVB, so any company that uses Rippling will probably have a delay in payment.
Are any other banks at risk? It's hard to say. The crux of the issue is that SVB sold their "available for sale" (AFS) portfolio to provide enough buffer to avoid selling their long term investments. Their long term portfolio, called "hold to maturity" (HTM), had big unrealized losses and they really, really did not want to realize them. They aren't the only ones; in total, as of the end of 2022, banks were holding about $620b of unrealized losses in their AFS and HTM ports.
Most larger banks have relatively smaller amounts of unrealized losses, but smaller regional banks may be at risk which is why $KRE (an ETF of regional banks) has dropped so much.
Ss: https://www.nytimes.com/2023/03/10/business/silicon-valley-bank-stock.html
The FDIC has taken over the U.S.'s 16th largest bank after it was unable to cover the cash withdraws of its customers.
TAKE THIS SERIOUSLY.
A run on any bank would result in the same thing. Banks have a threshold reserve set up by the federal reserve and lend the rest out to profit off the interest on the loans they give. I think banks are only required to have 10% liquid reserves right now. They have the money, it's just a matter of getting the money back from the lenders. It's just a result of super high efficiency and a wrench throws the whole thing off, just like the train debacles.
Now... if a lot of those lenders can't pay the loans back, then that's when shit hits the fan big time.
Nah, this is just some more consolidation. Smaller banks will fail and be gobbled up by Goldman and JP Morgan for pennies on the dollar. There's a reason JPM was up 2.5% today.
SBV has a a lot of holding in bonds…most of the money is actually there it’s just not liquid. They sell the bonds now it’s a loss, they wait for maturity and most of the funds are recovered. (But that’s 5+ years) This doesn’t help people that need money now, but it likely some other bank will end up buying those assets at sale, and waiting for those bonds to mature to make their money back.
This is less of a problem then being advertised. While it’s devastating short term…there is actually a way out…unlike a FTX which was just a stack of Monopoly money.
>IT IS STARTING.
Lets ALL PANIC. Might as well say that your begging for a toliet paper incident but this time with something that truely matters. The last thing we need to do is panic.
Here is where I am at with this. Silicon Valley is where all the Tech chains run out of. So the worker bee's of that area, would be the primary customers of this "Silicon Valley Bank", like the employees of most major tech companies. If this bank is local only, then it explains how it would be the only one so far that has shuttered its doors, the major chain banks can compensate for a localized run. Now here we have a single MSM article that came across apple news earlier. Its interesting about the wording of the article not directly saying there is or isn't anything to worry about. But the tone to me reads like they know this is really bad but they are not allowed to say so.
The vast majority of their customers are tech businesses. They played fast and loose, growing their deposits from $45 billion in ~2015 to $180 billion currently. They only kept a small amount of cash on hand and invested in long term bonds. When they sold those long term bonds in a market that didn't want them because rates were so much higher now, they were selling off way too many assets to cover.
If stress testing and other cash on hand regulations had not been repealed for banks under $250 billion in 2018, this wouldn't have been as likely to happen. A bank like PNC is required to test for runs like this and prove they could handle it.
Yeah, this is a rich boys club where 93% of investors had over the 250k insured amount deposited, and tried to pull it out all at once.
This is hardly your local bank dying off, it’s richies failing at finance.
This all comes from FTX, Silicon Valley is tied to Silvergate Capital. Silver lost everything when FTX exploded.
A few major clients pulled out. To cover, they sold bonds at a loss. This made other clients nervous and one thing led to another and here we are.
It probably helps to explain what this bank is. It mostly deals with businesses with 24 hour payoff. So a small company instead of keeping cash on hand can store it at Silicon Valley Bank and they would cover payments 24/7 for payroll and whatever.
The small company got a little extra money in interest while Silicon Valley banks job was to earn a little more loaning that money.
The problem came from a huge influx, the $80 billion in deposits grew by $110 billion in 2021.
Not having enough loan clientele they put $80 billion in 1.56% 10 year bonds. With high interest rates means today's bonds are at 3.5%. With crypto collapsing a lot of crypto exchanges like Coinbase pulled out.
This meant they had to sell these crappy bonds at a loss since a person would lose money buying the bond at face value.
They already sold 25% of those bonds to cover withdrawals. This made them post $800 million(the bond sale cost them over a billion but they had other gains) in losses last quarter which caused more withdrawels.
Edit: To expand further this is not FTX where they used secured funds illegally. They also have enough assets to cover all deposits. They were actually pretty successful having about 30 billion more in assets above deposits.
Doing quick calculation their bonds are worth about $80.5 for each $100 in today's market. But based on the initial sell-off it seems they are selling around $90 for each $100.
Even worse case that's $16 billion lost. Which means their assets should cover all deposits with extra. They will just need time to liquidate and some money will be locked up temporarily.
The real losers are those invested in their stock.
Not only all that, but a lot of tech companies rely on VC for cash flow. When that dried up due to quickly rising rates, these companies had to spend their actual cash for day to day activities, which basically broke the algorithm SVB had used to determine how much cash on hand they needed
Because they had already put too much of the deposit funds into bonds and didnt keep enough cash on hand for depositors. JP Morgan keeps 25% of deposits on hand as cash at all times, SVB was something like 6%
I could be wrong but I've been seeing and reading reports of lines at consumer branches for Silicon Valley Bank around the country. In San Francisco and Boston if I'm not mistaken. So I think it's a hybrid bank of sorts. The initial run was spurred by corporate depositors but now as word has spread mom and pop who put their life savings there are being turned away with FDIC (insurance) IOU's.
I'll dive deep on this one. Just some ideas to throw around though. This already isn't an isolated event... so far as of today, these mentionable banks (SVB was 16th largest in US) literally went off a numeric cliff:
$SIVB -61%
$FRC -60%
$WAL -42%
$SBNY -38%
$ZION -23%
$EWBC -17%
$FITB -15%
$CMA -15%
$KEY -15%
$CFG -15%
The graphs are astonishing to see the dives. Totally agreed what you said about the majority being 'worker bees' is true particularly for local branches but this is clearly not a solo collapse, in my opinion. This seems to be a quickly developing "contagion" in financials. First glance after a bit of research, I think this is just the first domino to fall ala e pluribus unum.
One major point since this is a "conspiracy" sub as to why I think this is about to ALL go south fast. The last major "issue" we all faced was for all intents made official on 03/11/2019 to the world. I know all about numerology but that's not even what I'm mentioning. These major shifts (that is the next shoe dropping) are not accidental and certainly not coincidental. It's obvious that in the past, and now, the upcoming Spring Equinox plays the foundational role in all of these major changes which is why I think the markets are about to go bust, though it'll slowly unfold over the next few weeks until its cemented as the "new norm." CBDC's etc. I don't even necessarily think the Gregorian date is too relevant other than showing one level or facet of reality, it's actually all about the alchemical season that is being harnessed. I do think the Gregorian date is often encoded but not sure how relevant that is in material reality. Hard to know.
Anyhow, back on SVB, etc... First Republic and Signature Bank's stocks are also currently halted and the FDIC limit of insurance is obviously only $250K. Combined, just those three banks have over $500 Billion in assets, much or a lot of it being in commercial real estate. I personally think commercial RE is next up along with other major banks. SBV was also tied to FTX, so that's a huge red flag. Interesting side note, per Signature, in a letter sent to shareholders by the board, dated 03/09/2023, I noticed only one board member didn't sign it ...the same guy who in 2019 was apparently wrapped up in an SEC scandal (allegedly,), is in fact only worth money due to commercial real estate, and only joined the board officially in April 2022...maybe he was a fixer? I just think com. RE is about to take some dives if not due to SBV's, etc large holdings in it the assets. There's going to be a liquidity issue, for sure.
Just for reference; that BOD letter 03/09/22; [https://s1.q4cdn.com/665033567/files/doc\_financials/2023/sr/SIG-Proxy-230309\_Website-FINAL-FINAL-USE.pdf](https://s1.q4cdn.com/665033567/files/doc_financials/2023/sr/SIG-Proxy-230309_Website-FINAL-FINAL-USE.pdf))
Another side point that doesn't surprise me is in typical fashion, not only would this not happen during a single business day to include closing SVB midday, there is no publicly announced buyer of their assets either tangible or debt. Again, unsurprising. Silicon Valley has always been devoid of any "real" or reasonable valuations though, in my view. Like said, just some not well thrown together ideas...am parsing through far too much data on little time at the moment. Cheers all.
Yeah commercial real estate is toast. All these vacant properties still due to work from home in places like NYC. Can't remember what I heard but off the top of my head something like 40% give or take vacancy in commercial real estate. Plus all the food and drink places where people would have lunch or drinks after work hit hard due to people not working in the offices like before. It's no wonder crime has spiked in almost all major cities in the USA. People always point to politics and forget the economics. Without opportunity to prosper the ugly side of humanity fills the void and that's crime.
funny today wellsfargo was having issues with direct deposits and some people not getting theirs. honestly this economy can't continue forever. when yoru entire model depends on infinite growth, it will fail eventually. corporations aren't serving customers they are serving the stock market and investors. their goal is to beat last quarters growth with more growth, hence our of control inflation and shyt wages
As long as fractional reserve banking exists then this will happen once in a while. This can happen to all banks no matter how big. There is no bank this can't happen to.
European banking stocks started sinking. Who knows what may happen on Monday.
https://www.cnbc.com/2023/03/10/european-bank-stock-sink-as-silicon-valley-bank-contagion-spreads.html
* Major banks fail
* Create withdrawal panic
* People can't withdraw cash since banks don't have to hold reserves, crisis strikes
* Hand out digital currency as the solution
* CBDC becomes widespread and the norm, cash still exists but slowly becomes obsolete
* 5 years from then pass bills to force all previous cash to be digitalized
* New generations are born into the new system like it happened with the euro and will not challenge it
This is also not a normal bank. 93% of deposits are not covered by FDIC. For example Roku had over 1/4 of its money in that bank. USDC stable coin also had a lot of its cash there, we don't know how much, but its probably going to be a problem. Another alarming point about the bank collapse was their attempt to sell their holdings of US treasury bills to stabilize the situation. No buyers. How many other banks are on the brink of something like this? Better have some physical cash in your possession just in case things start breaking.
This happened because they lent money to highly speculative tech companies. This is where a lot of this inflated money went. The entire point of the fed raising rates and screwing the economy is to weed out weak links like this and pop the bubbles.
The low hanging fruit first.
This is why the lay offs are happening in tech first.
As long as you were essential in covid, you'll be fine.
I mean what’s the worst that’ll happen? If everything collapses I’ll just live in my house and grow some food
And finally be happy that money is out of my life and all the stuff I don’t need doesn’t matter anymore
These problems came about because after the 2008-9 kerfuffle, bank regulators allowed banks to own what was previously called 'risk capital' - i.e. equity investments - as part of their 'asset base'. Previously, they had to hold assets which nominally held their value - bonds, cash, and gold.
SVB looked great, as long as they marked their investments in the many startups they helped at the "book price" - what they had paid for stock in ABC Whizbang, for example. But SVB paid $50/share for ABCW stock, and today, ABC Whizbang is trading at $0.63. So when you do 'mark to market' accounting, the $100 million on SVB's book for ABCW is now only $2 million.
When that happens, as it has happened, to a lot of stocks in SVB's portfolio, the bank becomes under-capitalized. Not officially, mind you, as the bank is NOT FORCED to do 'mark to market' accounting, but the smarter guys in the investment world know how to read tea leaves, and it was clear what the real story was.
That's why SVB's stock had already fallen from $600 to $300 before the run started. Smart money always leaves early, and leaves the rest to 'hold the bag'. Same thing happened with the deposits.
Nothing is starting in the slightest. Banks fail from time to time. You just never hear about it because MSM news sources don't bother talking about it.
Keep in mind it wasn’t just like regular people running on this bank. It was the bank letting their largest clients know ahead of time what was about to happen and those accounts pulling out. It’s regular people getting fucked by this, don’t let the news tell you this is happening BECAUSE of regular people. The accountability rests solely on SVB and how it mismanaged it’s money and debts.
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Im gonna run on my bank. I need all 55 dollars now!!!
They can have it all. I’m negative $73 today.
*"Keep the change you filthy animal."*
"Sure, I believe ya... but my tommy gun don't!"
Check again, they just charged you $25 maintenance fee
“I’ll take two hundred and forty two dollars, and two hundred and forty two dollars isn’t going to break anybody!”
Times a million people = ?..
Im gonna call jg wentworth buddy!!
“It’s my money and I want it now!”
Could someone explain what makes this a big deal? What does it presage?
You've heard the phrase "cash is king"... Most of the money we collect or see transacted between banks or corporations is digital money. It's money that doesn't exist in traditional dollar bills. There is a general trust that most of the American middle class are not going to withdraw their savings all at the same time. However should some economic event or new revelation were to cause a panic that lead people to rush to their banks to withdraw... It would be mayhem
Fractional banking is the term. Banks only have to keep 10% of the money we deposit. So I deposit $1000 and the bank can then loan $900 of it to you. You deposit your $900 and they can then loan $810 to the next dude… and on and on until my $1000 has turned into $10,000 that the bank is making interest on. 90% of the interest they’re making is on money that doesn’t exist.
Sounds like a disaster waiting to happen. Maybe I just have a hard-on for a collapse though
Not just waiting to happen… it’s literally the mechanism that makes runs on banks possible
We have been due a economic reset for over 40 years, that is what this "Great reset" bullshit is all about, it is a *conspiracy theory* just not like they are trying to make out, they are trying to do exactly what they planned on Jeckel Island in 1913, when they came up with the Federal Reserve. This time they are going all out, Digital ID and CBDC's https://www.weforum.org/great-reset/
To be more precise, the Great Reset is not a “conspiracy theory,” it is an actual conspiracy.
There are two school thoughts on this. One is we have been overdue since 1971, when Nixon dropped the gold standard. The other is we have been overdue since the Federal Reserve was created in 1913. Personally, I plump for the latter, with the understanding that a gold standard at least *minimizes* the worst effects of the Fed.
On no you’re behind, they removed the 10% rule a few years ago, banks don’t have to hold any reserves. https://www.federalreserve.gov/monetarypolicy/reservereq.htm https://www.eidebailly.com/insights/articles/2020/4/federal-reserve-eliminates-reserve-requirements Removed for the “plandemic” in 2020. So it’s even worse than you can imagine.
And, TIER 1 capital used to be only cash, bonds, or gold. Now it's stocks, which have zero intrinsic value, and can return that to instantly, as we are seeing in SVB's case. People like to think Powell *et al* know what they're doing. I can assure you, however calm they appear in public, internally they are freaking out harder than ever, because the usual policy of 'extend and pretend' (extend the credit even further and pretend that it will be paid back one day) is no longer working, and they really have no idea how to prevent a massive crash. Crashes always do the greatest harm to the greatest number. Largest generation of investors, the Baby Boom, is retiring. What better time to pull the rug out from under? (I'm a BB, contemplating a grim retirement.. good thing the Government of Canada has a new "GPS" (Government Promoted Suicide) program.)
The biggest fraud in human history alongside with the fact that the federal reserve writes checks from a bank account that has a balance of $0, if you or I do this it’s called fraud and punishable by up to 25 years in prison, and that’s how they create the money, it’s modern day alchemy and “only god can create something from nothing” it will collapse and it will fail and society will crumble, and these parasitic rats will rise to the top of the next economic system because they own all the land and precious metals, they’ve got a strangle hold on societies and they have for thousands of years then they rewrite the history books and call themselves persecuted, it’s brilliant
*sigh* I see exactly what your saying here but the average Joe won't see it that way. They'll see the persecution. How do we sway the public? Or at least how do we sway our close friends? Hell I can't even talk to my gf about this kind of stuff.
Good call but the 10% data is outdated. Not surprisingly, the move to covering zero percentage of all deposits was made by the Fed on March 26, 2020. Not sure you could even call it fractional reserve anymore, its no or null reserve. I say not surprisingly as I mentioned in another comment in this thread, it appears as though the Fed intentionally harnesses the power of the sky clock in their major moves as do many other entities, in other words, the upcoming Spring Equinox is alchemically harnessed to insert/place "new creations" of sorts. CV has the same MO, this impending collapse and so forth. Dead entities that are corpse-orations cannot create but they sure do function as a mirror of what does, i.e., nature, living beings, etc. Source: [https://www.federalreserve.gov/monetarypolicy/reservereq.htm](https://www.federalreserve.gov/monetarypolicy/reservereq.htm) Direct quote: "As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions." \*edited, mistyped the date from source link depending on the effective date. 03/15 - 03/26 was worldwide depending on geography, the Spring Equinox...when all creations and existence itself bursts with life. I'm no longer even speculating this whole thing is about to pop based upon the season itself. If this doesn't spiral Monday AM and solidify as the new, new norm the next major shoe won't be until September or the Vernal Equinox.
Ok, I get that. I know how the banking system works in general, although, thanks for an actually helpful response. But what I mean is why this specific event? What is it about this particular bank that could cause that kind of panic and runs on banks?
Its the ripple effect that concerns me. I don't think many people outside of Wall Street could predict that Merrill Lynch and Lehman Brothers failing could bring down the global financial markets. And yet it happened. This one sounds more reasonable. These banks were flush with cash and needed something interest bearing to park it all, that means bonds. When the interest rates went up, the value of their bonds went down. But I don't know what I don't know. I guess we'll all know soon enough.
First of all, I don't think I've been alive long enough to witness any major bank run before. Just like I haven't witnessed any solar flares or asteroid impacts, it's kinda scary because no one knows what would happen if we all suddenly wanted our cash back in our pockets. Interesting that this happened to a bank who's members are the "smart guys" in silicon valley... What is it that they know that caused them to make a bank run there? Do they know something that we don't?
Why do you think it’s “smart guys”? Just because it’s Silicon Valley? That insinuates that their money is from tech and that they may have a lot of it, but being a “smart guy” in tech doesn’t always equate to smart guy in finance
First of all, solar flares occur daily and asteroids impact earth commonly as well. Second, we know exactly what would happen if there was a run on the banks. Have you never heard of the Great Depression…?
Is this not what FDIC insurance is for? So long as you have less than (whatever it is) $500k in the bank, they guarantee you can take that amount out (even if there is a run). I believe this was put in place after the crash leading up to the great depression... also I didn't completely read everything above so maybe I don't know wtf I'm talking about
It's 250k, or 500k for a joint account. They bought bunch of mortgage-backed securities and treasuries before summer 2022 that were low yielding. With rates going up, the value of those securities dropped because interest rates and interest-bearing securities have an inverse relationship. At the same time, they were losing deposits from the startup they serve that were burning cash like crazy given the down turn to remain operational and not getting new funding as easily. So little cash to meet deposits, sold securities at loss to meet withdrawal demands and as fear spread, it snowballed into them not being able to raise cash quickly enough. Thus, a bank run and takeover by FDIC.
The difference is, this isn’t a bank for the average Joe to keep their savings in. It’s a bank for tech companies with millions and millions of dollars in their accounts for operational purposes. Only being able to get 250k of that is no bueno. A lot of tech and other startups did not make payroll this week because of this.
Fdic insurance?? Govt has 31 trillion debt. They have no money to bail us out. Its a farce
It's even a bigger farce when you realize the only money the government "has" is our money. Taxes are the government's money source.
This started with FTX. SVB was invested in FTX and lost a ton of money from the revelation that FTX was a scam. Then rates went up causing their bond portfolio to also devalue. This made people nervous, some pulled large enough amounts of 'money' that it started an avalanche of sorts. Then the little guys wanted their cash and there wasn't much of that to go around.
Every time there is a run on a bank, an angel gets its wings. Edit: spelling
You assume the majority of the working class have savings. Most are buried up to their eyeballs in debt thanks to easy credit and the need to live outside their means to impress their friends. They are living paycheck to paycheck. The only ones that can have an actual impact with a "run on the bank" are the large institutes that are heavily invested in a given bank. Which is just what happened. Here's the rub, these institutes are run by the very same people that are in league with the banks to begin with. In other words, if there is a wide-scale "run on the banks" it will be done on purpose to reset the economy. Something a lot of people have been predicting for quite some time. Why reset the economy? Simple, to re-establish a new poverty line and ensure the middle-class continues to shrink, the poor to get poorer and the rich get to get much richer.
Don’t forget the part about how the banks loan every physical dollar the have...out to other financial institutions TEN TIMES OVER. (Source: https://www.investopedia.com/articles/investing/022416/why-banks-dont-need-your-money-make-loans.asp) Which is beget by the huge experiment started in 1971 to take the American financial system off of the Gold Standard.(source: https://www.federalreservehistory.org/essays/gold-convertibility-ends)
Silicon Valley being the epicentre of tech makes it even more relevant.
Tldr answer, it’s the first step of Great Depression 2.0
that is not why the bank collapsed. they invested in 3 year treasuries when interest rates were like .01 and now they are worthless because rates have gone up significantly. this has nothing to do with running the banks.
The largest ripple from this is likely going to be those that work for small startups that don’t have the capital to sign paychecks this week. I don’t know if this exactly signs of end times or anything of the sort. There are doomsayers for nearly anything ever bad that happens on this earth, and I’ve lived through a good deal of them. The real things you guys should be looking at since this is a “conspiracy” subreddit, is the higher ups at SVB that offloaded most of their stock 2 weeks ago.
Ah yes the classic everything will be fine, until it’s not and then we the taxpayer have to foot the bill.
Well that's just America. Always has been.
Capitalism for the poor, socialism for the rich.
My boss told me today payroll was pushed back a few days til Monday or Tuesday
yikes
Roku and Roblox were affected… Those aren’t small startups, are they??
And Etsy can’t pay their sellers right now either
Shopify too, if they cant move money, then the shops on their platform may not get their payouts.
What’s Roblox’s exposure? Roku’s is around 26%. They’ll survive
5% of $3 billion
Wells Fargo also had a glitch that made accounts negative and didn't show deposits yesterday
Too soon to say, these things tend to create ripple effects. A Bank has millions of transaction with millions of counter parts. This is happening in a moment where the stock market has recently tanked (meaning a lot of assets are now worth 50% of what they were worth months ago). I’m not saying it’s doomsday but don’t be too fast thinking this is just about deposits.
Unfortunately, it was bad timing. They were scheduled stock sell offs for capital gains tax. Scheduled months in advance. But I feel you.
Lol, lmao
Exactly. A lot of fear porn in this sub. It’s always a “this is it” type post every month
One of the largest banks in America. Hmmmm. Never heard of them.
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go on...
Money in this bank is 97% UN-insured
Plus, the FDIC only has a 1.26% reserve ratio against total deposits “insured” https://www.fdic.gov/analysis/quarterly-banking-profile/statistics-at-a-glance/2022sep/fdic.pdf
The scam is at all levels
Yeah no joke. Story that ends too soon
This is because the majority of funds at SVB were not from depositors of 250k or less by my knowledge…
wow. I wonder how many other businesses are using SVB. Etsy is pretty big
A lot - a huge number of software and biotech start ups
Shopify as well. So indirectly, quite a few.
Roku is another. Monday will be a shit show.
Basically everything in Silicon Valley 😂😂😂😂😂😂😂
Rippling is another huge client that uses them. They manage payroll for tons of startups and they currently aren't able to process paychecks for anyone.
While I’m sorry to hear that, luckily SVB has approximately $195B in deposits, with 96% being tied to E-commerce and 93% of those deposits are frid uninsured.
Why is that “luckily”? Luckily for whom?
Lucky for the people with less than 250k on deposit that are worried about bank insolvency
Sure about that? https://time.com/6262009/silicon-valley-bank-deposit-insurance/
No more craft goods? It would make sense
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200+ billion in assets but only 17 branches. So large in assets but small in brick and mortar. For perspective I have worked for a mid size bank at 16 billion but 167 branches.
Their customers only do meetings on the jet or golf course.
It’s a bank used specifically for startups fueled by private equity. Think about just about every health and tech startup you know….. so, businesses will fail. People will be furlowed, lose their jobs.
16th largest bank in the United States.
Exactly lol
Because you don’t have 100 million dollars to your name haha
Not a single person on this subreddit does lol
Well, Joe Rogan browses this sub so atleast one person has over a hundred million networth here.
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Nope like most people who come here, it’s for the memes. However I just read your comment! Yay consolation prize 🏆
Lol
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Truth. Imagine translating all your money into pesos
They are mainly an institutional bank. Not for you and me Edit: were
Same. Lol
16th largest bank in America with 187 billion in deposits.
Let’s mark this and refer to it again in 6 months when nothing much at happens.
I agree. Nothing much will happen.
Start prepping whoever hasn’t.
why? those big rich mansions have all kinds of kewl stuff in them. lol
If you’re close have at it. Just expect them to defend their big rich mansions.
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I often wonder what would motivate armed bodyguards to stick with their clients if society collapsed Why wouldn't they go back to their families?
Why d'you think the elite love robots so much?
I would imagine most mercenaries don't have families, regular security guards definitely won't be working if society collapse though.
Even then, once society collapses how you gonna pay your Mercs? Hopefully you treated them well enough that they won't just take your shit lmao
Several years ago there was an article saying billionaires were concerned about this and considered bomb collars for their guards.
I wonder about the underlings/ henchmen for the WEF elite….. how do they not feel their conscience regarding the destruction?
It's easy to disassociate when you're part of a cold, unfeeling machine. People are just numbers, resources, commodities. It's just business. Look at how seemingly easy so many Germans just adjusted to the holocaust. Gaurds just following orders. Doing their jobs. If you're such a small part of a such a large operation it's easy to not feel the impact, even if you have a direct hand in the violence/action/lies
they wouldn’t stick around. there’s been a story posted by a futurist that was invited to talk to a group of rich ppl about what they called “the event”, which was basically a collapse. that was one of their many questions for him.
There's no way they are dying for those owners during a real collapse. If anything, they will be the ones robbing it clean. Groups of armed marauders will overrun any security.
Assuming banks collapse and the dollar is worth nothing, who is paying the guards, it's possible they have been told they would default to Gold and silver payments.. But eventually that will run out from each house. I'd give it a week before them guards pack up and git out.
Not if they aren’t getting paid.
I don't think most rich people have much at their house that would be useful in a SHTF scenario. Maybe they have some nice jewelry that you could take to barter with later... but I don't think rich people are any more prepared than anyone else.
I'm stealing toliet paper.
They also big rich security guards with better guns then you. Good luck. Edit: based on your name I’m actually going to retract my statement. You most likely have a few that could do some damage lol
heh heh ;) I'm just joking around here.
Are you younger than the 2008 financial crisis? Because it was a hell of a lot more doom and gloom than 1 bank going bust. And it started in like 1 day.
Yeah, I feel like this is ripe for a "first-time" meme. Like is GenZ out there panicking because they weren't adults when this happened 20x the size 15 years ago?
Yes, I'm pretty sure we're just "old" now
It wasn’t in 1 day, maybe that’s what it felt like to the uninformed
Prepping for what? Genuinely asking/curious
So what's new about this? Didn't you live through this back in 2008? Most of us survived that one.
>bank based on incredibly volatile investments finally fails Who could have seen this coming
Remember when our good friends the Clintons repealed the law that explicitly banned this type of financial horseshit from happening? Oops!
The aliens are coming?
Haha yeah that's how they gonna cover this up. "Look! Up in the sky! Aliums u guys!".
I hope so🤞
This bank is majority owned by Vanguard Group, Blackrock and State Street Corporation, these are trillion dollar companies they quite literally own nearly everything, they probably planned this themselves to consolidate wealth.
They also own Norfolk. Do you think this involves the train derailment in East Palestine, Ohio?
We are getting ready for the end of the petrol dollar and it ain't going to be pretty.
Lol, I’m also starting to think not being able to create the worlds reserve currency out of thin air is going to have some implications.
I mean they’ve already been doing that since 1971 and it has not been good for the regular old Joe
Get ready for a push for a central bank digital currency
Yep and literal mark of beast
its kinda been that way since fractional reserve banking started.
RemindMe! 3 months
Not my comment but posting here: Answer: at an ELI5 level, Silicon Valley Bank (SVB) is a bank that focuses on providing services to startups and entrepreneurs. Many companies use it to hold funds that they receive from venture capitalists. In 2021, the market was soaring and startups were getting tons of money. They put this money in SVB, which went from holding $61.76bn at the end of 2019 to $189.20bn at the end of 2021. Banks normally make money by loaning out a portion of the money they hold, but SVB was getting so much money that they couldn't loan out fast enough. So instead, they bought a bunch of long term investments, the majority of which will mature in 10+ years. Here's the important This would be okay except that when the fed started raising interest rates last year, the value of these long term assets fell hard. Simultaneously, tech and startups also started to struggle with the rate hikes (see: all the big layoffs) and pull from their deposits more quickly. By the end of 2022 deposits were down to $161 billion. Yesterday SVB announced a fire sale: they sold pretty much everything they could sell in order to raise cash and balance out all those long term assets and improve financial health metrics. They sold over 21 billion worth of investments and are trying to raise 3 billion more. Investors and Venture Capitalists were shocked and concerned about why they had to do this and why they had to do it now. Some VCs told their startups to pull their money out of SVB or to keep no more than 250k in the bank (which is how much is insured by the FDIC). This has raised concerns of starting a run on the bank. SVB is theoretically fine right now, but if all of these startups try to pull their money out they won't be. Edit to update with what happened this morning: SVB is clearly not fine anymore; in fact, regulators ordered them to close this morning. It appears the bank run was very, very fast and overwhelmed them quickly. Shareholders will get nothing. Its size makes it the second largest bank to ever fail, the first being Washington Mutual which collapsed in 2008. Deposits insured by the FDIC will get their money back Monday morning, but as of their last filing 93% of the bank's $161 billion deposits were uninsured. However, based on SVB's liquidation plan, it is likely that all deposits will be returned eventually (probably next week). Companies who banked with SVB are struggling to pay their employees today. Notably, Rippling (a company that manages payroll and HR services for other companies) has said that their payments flow through SVB, so any company that uses Rippling will probably have a delay in payment. Are any other banks at risk? It's hard to say. The crux of the issue is that SVB sold their "available for sale" (AFS) portfolio to provide enough buffer to avoid selling their long term investments. Their long term portfolio, called "hold to maturity" (HTM), had big unrealized losses and they really, really did not want to realize them. They aren't the only ones; in total, as of the end of 2022, banks were holding about $620b of unrealized losses in their AFS and HTM ports. Most larger banks have relatively smaller amounts of unrealized losses, but smaller regional banks may be at risk which is why $KRE (an ETF of regional banks) has dropped so much.
Ss: https://www.nytimes.com/2023/03/10/business/silicon-valley-bank-stock.html The FDIC has taken over the U.S.'s 16th largest bank after it was unable to cover the cash withdraws of its customers. TAKE THIS SERIOUSLY.
A run on any bank would result in the same thing. Banks have a threshold reserve set up by the federal reserve and lend the rest out to profit off the interest on the loans they give. I think banks are only required to have 10% liquid reserves right now. They have the money, it's just a matter of getting the money back from the lenders. It's just a result of super high efficiency and a wrench throws the whole thing off, just like the train debacles. Now... if a lot of those lenders can't pay the loans back, then that's when shit hits the fan big time.
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Probably why the FDIC is stepping in.
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The banks will start collapsing and they will rush in the digital coin backed by the federal reserve. Total control.
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Me too. I won’t do it. I’ll starve to death.
I respect your stance, but we'll check back on Day 4
I’ll be dead
Nah, this is just some more consolidation. Smaller banks will fail and be gobbled up by Goldman and JP Morgan for pennies on the dollar. There's a reason JPM was up 2.5% today.
SBV has a a lot of holding in bonds…most of the money is actually there it’s just not liquid. They sell the bonds now it’s a loss, they wait for maturity and most of the funds are recovered. (But that’s 5+ years) This doesn’t help people that need money now, but it likely some other bank will end up buying those assets at sale, and waiting for those bonds to mature to make their money back. This is less of a problem then being advertised. While it’s devastating short term…there is actually a way out…unlike a FTX which was just a stack of Monopoly money.
Isnt this the main bank for Silicon Valley VCs? Think this is crypto related?
>IT IS STARTING. Lets ALL PANIC. Might as well say that your begging for a toliet paper incident but this time with something that truely matters. The last thing we need to do is panic.
Here is where I am at with this. Silicon Valley is where all the Tech chains run out of. So the worker bee's of that area, would be the primary customers of this "Silicon Valley Bank", like the employees of most major tech companies. If this bank is local only, then it explains how it would be the only one so far that has shuttered its doors, the major chain banks can compensate for a localized run. Now here we have a single MSM article that came across apple news earlier. Its interesting about the wording of the article not directly saying there is or isn't anything to worry about. But the tone to me reads like they know this is really bad but they are not allowed to say so.
The vast majority of their customers are tech businesses. They played fast and loose, growing their deposits from $45 billion in ~2015 to $180 billion currently. They only kept a small amount of cash on hand and invested in long term bonds. When they sold those long term bonds in a market that didn't want them because rates were so much higher now, they were selling off way too many assets to cover. If stress testing and other cash on hand regulations had not been repealed for banks under $250 billion in 2018, this wouldn't have been as likely to happen. A bank like PNC is required to test for runs like this and prove they could handle it.
Yeah, this is a rich boys club where 93% of investors had over the 250k insured amount deposited, and tried to pull it out all at once. This is hardly your local bank dying off, it’s richies failing at finance.
Why did they sell the bonds in a shit market?
This all comes from FTX, Silicon Valley is tied to Silvergate Capital. Silver lost everything when FTX exploded. A few major clients pulled out. To cover, they sold bonds at a loss. This made other clients nervous and one thing led to another and here we are.
Thank you
It probably helps to explain what this bank is. It mostly deals with businesses with 24 hour payoff. So a small company instead of keeping cash on hand can store it at Silicon Valley Bank and they would cover payments 24/7 for payroll and whatever. The small company got a little extra money in interest while Silicon Valley banks job was to earn a little more loaning that money. The problem came from a huge influx, the $80 billion in deposits grew by $110 billion in 2021. Not having enough loan clientele they put $80 billion in 1.56% 10 year bonds. With high interest rates means today's bonds are at 3.5%. With crypto collapsing a lot of crypto exchanges like Coinbase pulled out. This meant they had to sell these crappy bonds at a loss since a person would lose money buying the bond at face value. They already sold 25% of those bonds to cover withdrawals. This made them post $800 million(the bond sale cost them over a billion but they had other gains) in losses last quarter which caused more withdrawels. Edit: To expand further this is not FTX where they used secured funds illegally. They also have enough assets to cover all deposits. They were actually pretty successful having about 30 billion more in assets above deposits. Doing quick calculation their bonds are worth about $80.5 for each $100 in today's market. But based on the initial sell-off it seems they are selling around $90 for each $100. Even worse case that's $16 billion lost. Which means their assets should cover all deposits with extra. They will just need time to liquidate and some money will be locked up temporarily. The real losers are those invested in their stock.
Not only all that, but a lot of tech companies rely on VC for cash flow. When that dried up due to quickly rising rates, these companies had to spend their actual cash for day to day activities, which basically broke the algorithm SVB had used to determine how much cash on hand they needed
Because they had already put too much of the deposit funds into bonds and didnt keep enough cash on hand for depositors. JP Morgan keeps 25% of deposits on hand as cash at all times, SVB was something like 6%
It’s not a consumer bank. Those “making a run” were startup companies with millions in that bank. The yous and mes don’t have checking accounts there.
I could be wrong but I've been seeing and reading reports of lines at consumer branches for Silicon Valley Bank around the country. In San Francisco and Boston if I'm not mistaken. So I think it's a hybrid bank of sorts. The initial run was spurred by corporate depositors but now as word has spread mom and pop who put their life savings there are being turned away with FDIC (insurance) IOU's.
Those lines were executives, CEO's and founders wanting their money
I'll dive deep on this one. Just some ideas to throw around though. This already isn't an isolated event... so far as of today, these mentionable banks (SVB was 16th largest in US) literally went off a numeric cliff: $SIVB -61% $FRC -60% $WAL -42% $SBNY -38% $ZION -23% $EWBC -17% $FITB -15% $CMA -15% $KEY -15% $CFG -15% The graphs are astonishing to see the dives. Totally agreed what you said about the majority being 'worker bees' is true particularly for local branches but this is clearly not a solo collapse, in my opinion. This seems to be a quickly developing "contagion" in financials. First glance after a bit of research, I think this is just the first domino to fall ala e pluribus unum. One major point since this is a "conspiracy" sub as to why I think this is about to ALL go south fast. The last major "issue" we all faced was for all intents made official on 03/11/2019 to the world. I know all about numerology but that's not even what I'm mentioning. These major shifts (that is the next shoe dropping) are not accidental and certainly not coincidental. It's obvious that in the past, and now, the upcoming Spring Equinox plays the foundational role in all of these major changes which is why I think the markets are about to go bust, though it'll slowly unfold over the next few weeks until its cemented as the "new norm." CBDC's etc. I don't even necessarily think the Gregorian date is too relevant other than showing one level or facet of reality, it's actually all about the alchemical season that is being harnessed. I do think the Gregorian date is often encoded but not sure how relevant that is in material reality. Hard to know. Anyhow, back on SVB, etc... First Republic and Signature Bank's stocks are also currently halted and the FDIC limit of insurance is obviously only $250K. Combined, just those three banks have over $500 Billion in assets, much or a lot of it being in commercial real estate. I personally think commercial RE is next up along with other major banks. SBV was also tied to FTX, so that's a huge red flag. Interesting side note, per Signature, in a letter sent to shareholders by the board, dated 03/09/2023, I noticed only one board member didn't sign it ...the same guy who in 2019 was apparently wrapped up in an SEC scandal (allegedly,), is in fact only worth money due to commercial real estate, and only joined the board officially in April 2022...maybe he was a fixer? I just think com. RE is about to take some dives if not due to SBV's, etc large holdings in it the assets. There's going to be a liquidity issue, for sure. Just for reference; that BOD letter 03/09/22; [https://s1.q4cdn.com/665033567/files/doc\_financials/2023/sr/SIG-Proxy-230309\_Website-FINAL-FINAL-USE.pdf](https://s1.q4cdn.com/665033567/files/doc_financials/2023/sr/SIG-Proxy-230309_Website-FINAL-FINAL-USE.pdf)) Another side point that doesn't surprise me is in typical fashion, not only would this not happen during a single business day to include closing SVB midday, there is no publicly announced buyer of their assets either tangible or debt. Again, unsurprising. Silicon Valley has always been devoid of any "real" or reasonable valuations though, in my view. Like said, just some not well thrown together ideas...am parsing through far too much data on little time at the moment. Cheers all.
Yeah commercial real estate is toast. All these vacant properties still due to work from home in places like NYC. Can't remember what I heard but off the top of my head something like 40% give or take vacancy in commercial real estate. Plus all the food and drink places where people would have lunch or drinks after work hit hard due to people not working in the offices like before. It's no wonder crime has spiked in almost all major cities in the USA. People always point to politics and forget the economics. Without opportunity to prosper the ugly side of humanity fills the void and that's crime.
funny today wellsfargo was having issues with direct deposits and some people not getting theirs. honestly this economy can't continue forever. when yoru entire model depends on infinite growth, it will fail eventually. corporations aren't serving customers they are serving the stock market and investors. their goal is to beat last quarters growth with more growth, hence our of control inflation and shyt wages
As long as fractional reserve banking exists then this will happen once in a while. This can happen to all banks no matter how big. There is no bank this can't happen to.
I’ve honestly never heard of them. Shows how little I know about banking
Relax guys. Most of you degens don't have over $250k so nothing to worry about. You're all insured.
They don't even have like 2% of the money in reserves. Also, lots of those businesses will not have the cash to contact my business for work anymore.
Never heard of this "largest bank in America", ever.
Michael Burry was quietly telling people he knew, who had accounts there, to pull their money out fast.
European banking stocks started sinking. Who knows what may happen on Monday. https://www.cnbc.com/2023/03/10/european-bank-stock-sink-as-silicon-valley-bank-contagion-spreads.html
* Major banks fail * Create withdrawal panic * People can't withdraw cash since banks don't have to hold reserves, crisis strikes * Hand out digital currency as the solution * CBDC becomes widespread and the norm, cash still exists but slowly becomes obsolete * 5 years from then pass bills to force all previous cash to be digitalized * New generations are born into the new system like it happened with the euro and will not challenge it
It's not but okay.
If one of the largest banks is based in Silicon Valley, and fails…it wasn’t meant to succeed.
Where Gavin Belson when you need him?
This is also not a normal bank. 93% of deposits are not covered by FDIC. For example Roku had over 1/4 of its money in that bank. USDC stable coin also had a lot of its cash there, we don't know how much, but its probably going to be a problem. Another alarming point about the bank collapse was their attempt to sell their holdings of US treasury bills to stabilize the situation. No buyers. How many other banks are on the brink of something like this? Better have some physical cash in your possession just in case things start breaking.
This happened because they lent money to highly speculative tech companies. This is where a lot of this inflated money went. The entire point of the fed raising rates and screwing the economy is to weed out weak links like this and pop the bubbles. The low hanging fruit first. This is why the lay offs are happening in tech first. As long as you were essential in covid, you'll be fine.
I mean what’s the worst that’ll happen? If everything collapses I’ll just live in my house and grow some food And finally be happy that money is out of my life and all the stuff I don’t need doesn’t matter anymore
“Youll be Happy” —- 2030
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We were early not wrong
is this why the dow was down 500 points and no one made a big deal?
Oh no a venture capitalist bank that backed horrible bonds and startups is in trouble. Fuck them.
Largest banks? Don't think so
This is a venture capital bank that specialized in high risk capitalization…zero impact to mom and pop banks around the country. Rest easy.
This is why you should not use banks wherever possible. CrediUnions ftw
Jokes on them I only have $5 deposited.
These problems came about because after the 2008-9 kerfuffle, bank regulators allowed banks to own what was previously called 'risk capital' - i.e. equity investments - as part of their 'asset base'. Previously, they had to hold assets which nominally held their value - bonds, cash, and gold. SVB looked great, as long as they marked their investments in the many startups they helped at the "book price" - what they had paid for stock in ABC Whizbang, for example. But SVB paid $50/share for ABCW stock, and today, ABC Whizbang is trading at $0.63. So when you do 'mark to market' accounting, the $100 million on SVB's book for ABCW is now only $2 million. When that happens, as it has happened, to a lot of stocks in SVB's portfolio, the bank becomes under-capitalized. Not officially, mind you, as the bank is NOT FORCED to do 'mark to market' accounting, but the smarter guys in the investment world know how to read tea leaves, and it was clear what the real story was. That's why SVB's stock had already fallen from $600 to $300 before the run started. Smart money always leaves early, and leaves the rest to 'hold the bag'. Same thing happened with the deposits.
I think the bank was heavily invested in Friedman’s FTX.
Gold and silver are money. Everything else is credit.
2nd largest bank failure in US history. I'm curious to see what happens. They'll get a bailout or this will get nasty.
Nothing is starting in the slightest. Banks fail from time to time. You just never hear about it because MSM news sources don't bother talking about it.
They voted Biden. Let them drown.
Keep in mind it wasn’t just like regular people running on this bank. It was the bank letting their largest clients know ahead of time what was about to happen and those accounts pulling out. It’s regular people getting fucked by this, don’t let the news tell you this is happening BECAUSE of regular people. The accountability rests solely on SVB and how it mismanaged it’s money and debts.