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COINBASE has a $240M cash balance at Signature
Why would the Fed save crypto?
Coinbase: "As of close of business Friday March 10 Coinbase had an approximately $240m balance in corporate cash at Signature. As stated by the FDIC, we expect to fully recover these funds."
Who could be behind all this?
bankman
AFAIK most of Silicon Valley Bank's customers are businesses.
If you have 100 employees, each of which whom earns $100,000/year (which is a low for Silicon Valley), that's around $384,000 per fortnight just for salaries - not even counting the cost of benefits like health insurance, 401k matching, etc, plus all the expenses for the business (bills, equipment, software licenses, etc). A good business won't just have two weeks worth of money in a bank account (they'll have far more than that), and they're also not going to spend time and make things more complex splitting it across multiple accounts.
Still pretty accurate.
All depositors will be able to get their money back.
https://home.treasury.gov/news/press-releases/jy1337
By the way, no depositor has ever lost money due to a bank failure since FDIC was created in 1933. Only people who bought shares or bonds get wiped out, but they knew that risk when they bought it.
When an FDIC-insured bank fails, it only means that the bank failed to show the minimum requirements to operate, so the bank falls into receivership. This is perfectly normal, healthy and regulated capitalism, and it is not a scam. @Maounique SVB loaned too heavily to the crypto sector which is contracting now (it was really just an asset bubble inflated by low interest rates, I think) and so they are now out of business.
Not really. The money does exist, it's just tied up in bonds for a few years. If the quantative easing is only temporary and repaid as soon as the bonds mature, it'll ultimately have no effect on the economy other than solving the immediate problem.
The issue is just whether the government can be trusted to actually do that when the money comes in from the bonds, but if it's entrusted to a private company with a covenant on what it can do with the money, then it should be fine.
Yet, that was not the reason of its failure, it was the government bonds that did the trick.
If you want a good time, follow @KimDotcom on Twitter. He’s like a kid in a candy store with this story. He’s absolute batshit insane, his facts are either cherry picked to support desired conclusions or made up entirely, but it’s really entertaining.
Tbh Twitter as a whole is really entertaining on this topic. I don't mean informative or helpful, I do mean entertaining.
I think we will see another 2 or 3 banks fail this week.
Lowendbetting? Ride to the bottom on liquidity..
Cmon, tell us which, so we can go and short the stocks.
I'm not an expert and this is solely my own opinion but FRC and WAL come to mind. Maybe Pacwest too.
https://www.reddit.com/r/Superstonk/comments/11q79mw/say_goodbye_to_credit_suisse_breaking_credit/
https://www.reddit.com/r/Superstonk/comments/11q67zq/first_republic_bank_down_70_in_premarket/
https://www.reddit.com/r/Superstonk/comments/11q6ftn/western_alliance_joins_the_party_with_33_in_pm/
Found this linked to from hacker news. A good write up of what happened: https://stratechery.com/2023/the-death-of-silicon-valley-bank/
In short, whoever owned bonds is screwed as they collapsed in value.
To give an example, the yield used to be about 1.5 and it is now 3 times that. As a result, in order to obtain one dollar of income, you need invest three times less, therefore many people are dumping the bonds and the yields continue to increase, driving more sell-offs.
Most banks are MAJOR bonds holders and are posting huge losses as they have to sell those for liquidity or simply by adjusting the value of what they currently own. This spooks investors and savings customers who are pulling their funds. There is nothing abnormal here, absolutely normal reactions of the public and it was totally expected as the rates went up, that was why the markets were so spooked when they started to rise.
In the long run, however, the banks will do well, they will lend more and put less in bonds, will have a higher spread and bigger profits. The banks lending to regular people, the retail banks, those are to be watched as well as their portfolios, the ones which have lots of bonds and little lending to customers, avoid, the opposite, buy after the market bottomed up.
One last thing, but bloody essential!
In times of inflation, quantitative easing is a no-no, however, since this is structural inflation and not really monetary-aggregate driven, we would likely see BOTH high interest rates AND quantitative easing. This is the combo which would discourage growth and spending while keeping the system liquid/solvent.
FDIC taking over failing banks which own tons of bonds is QE by the backdoor. It will soon break-out in the open as it is the logical thing to do. At least, that is what I'm hoping for.
"Signature Bank" down.
https://www.dfs.ny.gov/reports_and_publications/press_releases/pr20230312
And this fkin collapse will have impact on world economy. Hail murica.
It certainly would, but not in the way you would expect. That is too complex an analysis to put here but, in general, the impact would be bad only on the poor countries due to the deglobalization.
I don't keep up to date with finance information/news , all the banks that seem to be going bang are US one wonder how long until you get a European ones going up in flames.
EU has stronger regulations, but the interest rates are going up in the EU as well, so it should not be long.
When American Banks fart european ones poop.
Starting Dominos effect
During the financial crisis, the US banks withdrew the investment in EU to patch up holes created by the mortgage derivatives collapse. Today that is no longer the case due to many reasons, however, the EU banks are holding bonds as well and the interests are going up there too, so things will be bad, albeit way less than in US because the EU banks are more tightly regulated and facing more stringent requirements.
I don't manage payroll but I wonder how much money firms keep on deposit with ADP versus automated wire transfers shortly before payroll is cut. I have to think ADP leverages its position as the nation's paycheck writer to require a goodly amount of cash on hand so ADP can benefit from the float.
No depositor has ever lost insured money.
Is it true that no one has ever lost uninsured money?
Eat it plebes
Bond Yield! Not bond prices.
This signals EXACTLY THE OPPOSITE of what you are saying. The dropping interest rates on governmental debt is almost never a bad sign. The system collapses in case of HIGH yields, like in Greece, when the Greeks could no longer refinance their debt because the interest was simply too high.
Additionally, bond yields going down, means the bond prices will be back up and less banks would be exposed AND might signal that QE I have predicted just a few hours ago already started.
These Twitter/Trumpistani "economists"... You break the basic rule of propaganda, it must be based on something, even a rumour, taking a picture of a sunny day and saying that is the worst storm ever won't work even with most trumpistanis.
First Republic are one of the main banks I use 👀
They're in a much better position than SVB were, though. Far more reserves, and it's not all in bonds. That doesn't stop people from panicking though - I saw a bunch of people lined up outside my local branch on Saturday, I guess to take money out.
The money for those wire transfers has to come from somewhere, though.
Right - what I meant was how many weeks of advance payroll would a typical corp have on deposit with ADP, versus doing a wire transfer every week/biweek before payroll.
Corps probably need their SVB funds for things other than immediate payroll was my point/speculation.