Topic: SVB Analysis Shows More Than 186 US Banks Might Still Collapse (Read 267 times)

The same government that looks like the hero saving these banks are the same ones trying to hard to hide the misfortune of banks, I remember that banks have reports they drop every year through balance sheet and it always look perfect, how the hell are they now crashing? Those governments are pretending not to know and also pretending to be the only sole saviour of the banks. Why the hell crypto won't do better than centralized banks? Bitcoin looms like the only sensible digital assets that could come to the rescue but hell no, I bet they won't want that to happen, the fear of people around the world shifting totally to something the government can't control is scary for the government themselves. There is nothing that can be done than to watch them banks crumble.

This was the result of having higher interest rates, people kept putting their money into banks to make more from the interest rate that is much higher these days and the reality is that not many banks have the money to actually provide that much return.

This is the problem, now back  to solution and how we can figure this out; simply just drop the rates and people will take their money out. If you keep doing this then we are going to end up with people who will take their money out of the banks and the banks will do much better, they will not have to pay a lot, and even if they do not take their money out, at least the interest banks needs to pay will be lower. So in order to save the banks, FED needs to declare at least 0.5 lower rates to make it work.

I think mostly bonds and gold.

In the meantime, the FRC's decline continues, stock trading is forcibly halted today, and the bank's current market capitalization has fallen from $40 billion in November 2021 to $1 billion today. This bank is over, carry the next one.

But where does all the money go besides Bonds? Stocks are risky at current valuations, plus it might also crash soon because of the Federal Reserve's over-tightening, which could start a deflationary cycle. Bitcoin? Probably good for a small percentage of your total networth. Gold? China, Russia and other Central Banks around the world are accumulating Gold because the World Powers are probably going to war.

Yep. In the context of a high key rate, rather high interest income on short-term US Treasury bonds and amid high inflation, there is absolutely no reasonable reason to keep your money on deposits at a symbolic interest rate (usually 0.1%), at least an amount exceeding deposit insurance limit. Therefore, the outflow of funds from bank deposits will continue and I do not see how this trend can be changed.

It's the reporting of earnings week in the United States, and First Republic Bank reported that they saw $100 billion in deposits fall this year. Other banks might have the same reports. I believe we might see another drama from the legacy financial sector soon. Plus if the Federal Reserve hasn't cut rates yet, it definitely shows that they are not anticipating something to break. It's when Jerome Powell starts cutting rates that he's desperate to pump more liquidity into the system because something is about to break. BUT it will always be too late.

A month has passed and the passions around the banks have subsided a little, but the problems have not gone away. The high key rate and hints of its further growth make the outflow of deposits from banks increasing and it is not clear how this can be fixed. An interesting article in Bloomberg about this.

The fall of Silicon Valley is the worst since the fall of Lemon Brothers in 2008.
The current crisis that the banking sector is going through cannot be considered as part of a series of crises that have recently spread and are taking place over a relatively short and close period of time. Rather, it is much deeper and more complex than that. Especially since the center of the crisis is the United States of America, which has a great weight in the global economy in terms of being the largest economy in the world in terms of output, and also the largest financial market.

It's infuriating that these too-big-to-fail banks can do whatever they want and still get away with it. I'm not saying the government shouldn't bail out banks, but strict penalties should be given to these guys that mismanage people's funds. For a company to be too big to fail it should literary be too big to fail not failing and getting a bailout from the government. I believe these banks know that they have something to fall back on that's why they just keep making dumb decisions.
 

Not entirely that these particular 186 banks might or are showing signs of collapse (a little clickbait-ey for a title by the by), but more like vulnerabilities in their systems that are also found within SVB and are sought as the cause of its collapse. Honestly speaking, considering how for once, SVB is seen as the quintessential bank for startups in the olden days, it wouldn't be surprising for other companies to copy their business model hoping to emulate the same success that SVB once had, but that also meant they copied these armor chinks that were found in SVB's system. As investigation still rolls over and people are still at a lost with what really happened with SVB, more and more evidences will come up that would point towards the collapse of this once big bank. And since investigations are still ongoing, it wouldn't be wise to point fingers, assume shit, and whatnot all in the name of making bitcoin and crypto the better option in the people's eyes. Instigating a financial collapse is going to affect bitcoin too.

When it was thought that the recession had been visible during the toughest time during the pandemic wasn't really visible at all. But it was when things have come lighter and everything turned back to normal.

And while most of the economies in different parts of the world relies on US' global market and economy then these collapses that might soon to happen will even be more impactful and brutal.

These crashes are gonna slaughter a lot of little individuals that have put a lot of money in the stocks and bonds. While those giants and big investors that have been aware of the situation probably have gone long on a weekday and vacation took profits too early as they've anticipated it.

And here we are, not problematic about it since we've got our assets in bitcoin.

It's hard to know what to believe at the moment, as there are other so-called experts who state that banks are much better capitalized in general compared to the 2008 crisis. No recession or crisis tends to be like the others, but the subprime mortgage crisis was a whole different beast and it's hard to compare. What I heard before was that central banks left rates low for far too long, instead of slowly ratcheting them up they had to rush a really sharp spike of rates and now we're seeing the fallout of that. It shows that even the policymakers make very poor decisions if it means they have a comfier job and they don't want to annoy the public. If there are any more bank failures it is going to create ever more jitters.

Meanwhile, First Republic Bank (FRC) seems to be dead too. The fall of its shares is close to catastrophic today.

Which case are you referring to? SVB buying bonds or people trying to capitalize on this crisis to swing trade? I don't think diversification can help SVB this late in the game though, I don't see how it will work either since they basically have no cash, right? As for the latter, pretty sure most of them will just withdraw their cash and then use it to buy gold or BTC even further.

I'm not an economy expert but I don't think they care about retail customers who only have a $100k deposit or less. From what I understand, it seems like they will try to keep the big ones alive while slowly but surely closing the smaller banks.

They will just print more money at the end of the day. I won't be surprised if they even go as far as changing the law to make sure their goal is achieved, just like what happened with Credit Suisse.

Maybe that's why they should print more than 2 trillion of usd to maintain that gap. This could cause inflation and increment in debt but also grow the economy. But in this scenario when more than 186 banks are on the verge of chaos how the USA can think of printing 2 trillion dollars because it will default those banks by defaulting loans which in result decrease the value of assets that those banks holds, (like more). Overall, these steps are in not favor of those scrambling banks. Now I am wondering what exactly the USA is thinking about, Are they planning to clear the banking system or trying to reduce the banks by defaulting them? Do they have a backup plan? How will they secure people's money? Because I see no government intervention, Regulatory changes, and Economic boost stimulus acts in favor of banks till now, Maybe they come up later.

All I can say is if it is happening then the dominance of BTC is going to increase in no time because if there will be fewer banks and which means people will seek a source to invest their money and let their money earn for them while they are sleeping if it's not in banks then no doubt people will find another option, You know what I mean hehe.

I hope this will not happen. because it will devalue the US dollar mainly damaging those countries that used it for national reserves like my country and we are also near to being declared as default.

It's always important for individuals and businesses to be aware of risks in the financial system and to take steps to mitigate them, such as diversifying investments and maintaining adequate emergency funds. However, it's also important to recognize that the situation is complex and nuanced, and that sweeping generalizations or predictions should be approached with caution.

This will be an interesting week. Basically right now many of these regional bank ceo are going to see Warren Buffet and see if he can help them out. Basically what happened in 2008 with Goldman Sachs.

However if you remember correctly, Warren buying Goldman didn’t do much. The stock will crashed another 50% before bottoming many months later. Seems like this is a complete repeat.

The drama of the SVB is that in terms of banking, he did everything right. In the sense that it was not the gamble of managers who were too carried away by high-risk investments that led to its collapse, and there were no high-profile corruption scandals with the loss of the bank's reputation. Just the conservative rate on the "risk-free" asset in the form of US Treasury bonds did not work, in conditions uncontrolled surge in inflation.

And who did it? Of course, Putin.

50% seems about right considering these banks don't hold enough cash to insure depositors in the event the economy crashes and there's a need for liquidity.


There could be whatever regulation on SVB in retrospect and the bank would still fail unless the regulation were to be applied to the federal reserve themselves. It was them that created trillions of dollars of cash flowing into the economy in 2020-2021 and seemingly tech stocks is where a lot of that money was funneled to. The bubble popped and so did SVB. The treasury bonds they were holding onto only added to the complications. SVB can't control the inflation rate.

My personal theory is that the Biden administration will try to avoid bailing out banks in this occasion, unlike what we all lived back in 2008.

Also, we must be very careful and observer the movements of the Republican party and how they will deal with the debt ceiling when the moment to vote on it comes. If the debt ceiling is not increased and the uncertainty start to grow in the United States, then it could be the spark able to ignite the gun-power cage of the Global economy.

It would be a huge irresponsibility if both the Republican and Democrat party could not work together to avoid a disaster.