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yeah SVB took deposits and bought 10 year treasury bonds and MBSes with them. when they bought those bonds were yielding about 1.5-1.7%. since right now you can buy a bond yielding 3.7% SVB has to offer a significant discount in order to convince someone to buy their bond which yields 1.7% for 9 years instead of a new bond that yields ~4% for 10 years. SVB could have theoretically held the bonds to maturity without an issue, if it weren't for the pesky problem of depositors wanting access to their money now due to the money hose drying up. after people noticed that this was a problem and started to move money out SVB scrambled and tried to hold a fire sale at even steeper discounts to sell stuff ASAP and "reassure" everyone that they had plenty of money to cover deposits but those sales didn't go great and all that did was cause even more people to demand their money right loving now. pretty much a textbook bank run.
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Mar 10, 2023 20:41
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Shifty Pony posted:yeah SVB took deposits and bought 10 year treasury bonds and MBSes with them. when they bought those bonds were yielding about 1.5-1.7%. lol, lmao
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Mar 10, 2023 20:44
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fart simpson posted:guy who posts in yospos 9 hours per day: my productivity going down killed the economy look it was already 99% down but if it loses that last 1% everything will fall apart ok
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Mar 10, 2023 20:50
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idk i really want to think that there's no political will to bail out silicon valley whiz kids but time will tell i guess
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Mar 10, 2023 20:52
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rotor posted:idk i really want to think that there's no political will to bail out silicon valley whiz kids but time will tell i guess dem wunderkid eric swallwell already is on the tweets about it
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Mar 10, 2023 20:53
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Archduke Frantz Fanon posted:dem wunderkid eric swallwell already is on the tweets about it well i mean yeah of course he would be but he cant do it on his own
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Mar 10, 2023 20:55
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rotor posted:idk i really want to think that there's no political will to bail out silicon valley whiz kids but time will tell i guess inshallah
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Mar 10, 2023 20:55
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really need to emphasize that the FDIC closing a bank in the middle of the day is a last-ditch move, especially mid-day on a Friday. they prefer to do it after close of business on Friday so they have the entire weekend to arrange for the transition to go smoothly and avoid situations like payroll not clearing. also the FDIC directly taking receivership of a bank is an absolute last-ditch move, they much prefer to have another bank take over the deposits in return for more market share, free money, and help unwinding the mess. both of those two things happening means that SVB wasn't going to make it to the end of the day and the FDIC had to grab the falling knife.
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Mar 10, 2023 20:56
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the biggest lmao for me so far is they bought all the MBSes in 2021, instruments that are known to be very sensitive to the nominal rate from The Fed, when everyone could see the writing on the wall for low interest rates. Bought high, forced to sell low.
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Mar 10, 2023 20:56
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if the fdic gets called at all its always a last ditch move. they just are the last ditch
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Mar 10, 2023 20:58
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The fun part is guessing how the contagion spreads from here
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Mar 10, 2023 21:01
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Nybble posted:The fun part is guessing how the contagion spreads from here I doubt it spreads to many other banks. SVB had a unique client base that basically meme'd its own money to death through a social media panic
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Mar 10, 2023 21:04
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bob dobbs is dead posted:right? but theres always some fuckin stupid thing
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Mar 10, 2023 21:06
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pmchem posted:I doubt it spreads to many other banks. SVB had a unique client base that basically meme'd its own money to death through a social media panic anecdotally its loving with a bunch of payroll and payment processors which will cause them to lean on their other banks which is one vector this could take
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Mar 10, 2023 21:07
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this feels like that bank in particular made some really bad bets around interest rates and withdrawal rates that don't reflect on the health of banks in general - if anything higher rate spreads should be more profitable but in the meantime i imagine a bunch of small/med companies using them for payroll accounts or whatever are stuck in the lurch until things get unwound. even if it only ended up being a 10% haircut on uninsured deposits in the end, they might be in for some real bullshit through no real fault of their own in the meantime
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Mar 10, 2023 21:08
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https://twitter.com/SVB_Financial/status/1632818336391213059 
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Mar 10, 2023 21:15
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https://mobile.twitter.com/CoinDesk/status/1634277243487768579 sickos.jp2
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Mar 10, 2023 21:19
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pmchem posted:I doubt it spreads to many other banks. SVB had a unique client base that basically meme'd its own money to death through a social media panic I had this exact thought a few days ago with silvergate, a much more lol bank with an even more niche clientele
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Mar 10, 2023 21:21
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at least silvergate "voluntarily" liquidated itself. video pony is right, usually they'd at least wait until the end of the day/COB today to do something like this it must be pretty bad lol
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Mar 10, 2023 21:27
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HolHorsejob posted:I had this exact thought a few days ago with silvergate, a much more lol bank with an even more niche clientele silvergate was criminal, svb is just a bank run
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Mar 10, 2023 21:29
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https://twitter.com/garrytan/status/1634286688922132481 all those fart-app-as-a-subscription-service startups...ruined... 
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Mar 10, 2023 21:30
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lol good job finding an old tweet that looks bad in retrospect, that must have been posted months or years ago I bet. now let me just comically slide my eyes down to the post date and...
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Mar 10, 2023 21:31
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Shame Boy posted:lol good job finding an old tweet that looks bad in retrospect, that must have been posted months or years ago I bet. now let me just comically slide my eyes down to the post date and... lmao
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Mar 10, 2023 21:32
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FMguru posted:https://twitter.com/garrytan/status/1634286688922132481 innovation of what exactly
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Mar 10, 2023 21:32
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post hole digger posted:innovation of what exactly scams and scam accessories (subscription scams)
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Mar 10, 2023 21:35
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post hole digger posted:innovation of what exactly proceduraly generated ugly pictures of monkeys? a new type of money that is inferior to current existing kinds of money in every way? you know - the future
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Mar 10, 2023 21:36
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forbe
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Mar 10, 2023 21:36
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im contacting my congressperson to tell them not to bail out SVB not because i have any nuanced opinions about it but simply because i am a hater.
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Mar 10, 2023 21:37
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https://mobile.twitter.com/RepRoKhanna/status/1634179619195633666 ro!!!!!
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Mar 10, 2023 21:39
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FMguru posted:self driving cars that seek out and murder children? steamed scams
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Mar 10, 2023 21:39
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post hole digger posted:innovation of what exactly https://forums.somethingawful.com/showthread.php?threadid=4026186
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Mar 10, 2023 21:42
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i'm gonna be real mad if Startup Bank gets a complete bailout
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Mar 10, 2023 21:43
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Beeftweeter posted:i'm gonna be real mad if Startup Bank gets a complete bailout
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Mar 10, 2023 21:44
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Beeftweeter posted:i'm gonna be real mad if Startup Bank gets a complete bailout
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Mar 10, 2023 21:45
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i dont think SVB even did anything wrong, really, except communicate poorly with their clients. i am an inveterate hater.
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Mar 10, 2023 21:46
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post hole digger posted:i dont think SVB even did anything wrong, really, except communicate poorly with their clients. i am an inveterate hater. I think uh SVB also very much cultivated a certain client base
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Mar 10, 2023 21:47
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post hole digger posted:i dont think SVB even did anything wrong, really, except communicate poorly with their clients. i am an inveterate hater. they seem to have been exceptionally bad at managing deposits, so it was run by idiots loaning to other idiots let it fail
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Mar 10, 2023 21:50
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ah, matt levine thinks the bank contagion is gonna be other businesses looking at uninsured portions of their business account deposits at other banks (which are actually fuckin huge, outside of svb itself) and running and withdrawing poo poo to get it insured. which is deffo some fuckin thing that would happen
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Mar 10, 2023 21:57
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Beeftweeter posted:they seem to have been exceptionally bad at managing deposits, so it was run by idiots loaning to other idiots gonna be a whole lotta treasury departments working late tonight
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Mar 10, 2023 21:57
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thats why boa shares ate poo poo, cuz boa actually only has like 30, 40% of business deposits under the insurance limit, iirc. so thats the next domino if theres a domino.
bob dobbs is dead fucked around with this message at 22:02 on Mar 10, 2023 |
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Mar 10, 2023 22:00
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