Bank collapse

Look, there are a number of things that caused this bank to collapse on Friday. But I can personally attest that a bank simply can’t be too woke

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This is what happens when you repeal Dodd-Frank.

Motown Spartan wrote:This is what happens when you repeal Dodd-Frank.

No no no, that’s not it. It’s woke.

I'm having trouble with all the wealthy investors crying "wolf" over one bank that they caused to become insolvent via their run on the bank.

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DWags wrote:[tw]1635033159162286082?s=46&t=o_-92Ldle66XHQBlJVUMFQ[/tw]

Does the damage Trump caused never end?

Trapper Gus wrote:

DWags wrote:[tw]1635033159162286082?s=46&t=o_-92Ldle66XHQBlJVUMFQ[/tw]

Does the damage Trump caused never end?

Not until his Supreme Court appointees die off.

Everyone needs to remember killing regulations is a mainstream republican staple. So everyone who had a bank (or train) crash affect them should place blame squarely in one place.
(They wont)

So, a second bank fails, and the CEO of the first bank, a member of the SanFran Federal Bank Board, says he didn't know what the Federal reserve was doing.

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Speaking of being tone deaf.

https://www.axios.com/2023/03/11/silicon-valley-bank-paid-bonuses-fdic

So glad I got my money out of banks and converted it to bitcoin and gold and silver and helium and tungsten and oxygen and granite.

Turtleneck wrote:So glad I got my money out of banks and converted it to bitcoin and gold and silver and helium and tungsten and oxygen and granite.

Coal is the new gold.

kingstonlake wrote:

Turtleneck wrote:So glad I got my money out of banks and converted it to bitcoin and gold and silver and helium and tungsten and oxygen and granite.

Coal is the new gold.

I love coal. Beautiful coal.

maybe they should try buying fewer lattes.

Motown Spartan wrote:This is what happens when you repeal Dodd-Frank.

https://www.nytimes.com/2023/03/13/opinion/elizabeth-warren-silicon-valley-bank.html

I wish all our Senators and Representatives were are smart as Senator Warren.

Trapper Gus wrote:

Motown Spartan wrote:This is what happens when you repeal Dodd-Frank.

https://www.nytimes.com/2023/03/13/opinion/elizabeth-warren-silicon-valley-bank.html

I wish all our Senators and Representatives were are smart as Senator Warren.

Cue the batschit crazy party to go on the attack

Years of near zero interest rates, followed by rapid inflation and rising interest rates are causing problems? Where's that shocked Picachu face when you need it?

TravelinMan wrote:Years of near zero interest rates, followed by rapid inflation and rising interest rates are causing problems? Where's that shocked Picachu face when you need it?

I see you have seem the right wing nut jobs talking points. How about not running such a high risk investment strategy as a bank to protect your customers and investors money, or is protecting your customers & investors too old fashioned a value?

Trapper Gus wrote:

TravelinMan wrote:Years of near zero interest rates, followed by rapid inflation and rising interest rates are causing problems?  Where's that shocked Picachu face when you need it?

I see you have seem the right wing nut jobs talking points.  How about not running such a high risk investment strategy as a bank to protect your customers and investors money, or is protecting your customers & investors too old fashioned a value?

Management definitely isn't getting a gold star for how they ran things, but U.S. Treasury bonds are supposed to be the lowest risk investment you can possibly make.

TravelinMan wrote:

Trapper Gus wrote:

I see you have seem the right wing nut jobs talking points.  How about not running such a high risk investment strategy as a bank to protect your customers and investors money, or is protecting your customers & investors too old fashioned a value?

Management definitely isn't getting a gold star for how they ran things, but U.S. Treasury bonds are supposed to be the lowest risk investment you can possibly make.

It’s not the investments, it’s the liquidity.

TravelinMan wrote:

Trapper Gus wrote:

I see you have seem the right wing nut jobs talking points.  How about not running such a high risk investment strategy as a bank to protect your customers and investors money, or is protecting your customers & investors too old fashioned a value?

Management definitely isn't getting a gold star for how they ran things, but U.S. Treasury bonds are supposed to be the lowest risk investment you can possibly make.

They are, and if held to maturity they return your principle plus depending on the bond you get the discounted interest when you buy or the coupon interest over the life of the bond. However, as any school child knows, the value of the bond fluctuates on the market as interest rates change, and thus the term of the bond needs to be matched to the term of the money they are invested from. Given that the bank apparently allowed instant withdrawal of any amount of depositors accounts they should have invested in the shortest term securities to lower the interest to principle risks. This really isn't high finance, and even with the long term bonds with their principle risk the bank should have offloaded a hedge to protect themselves. I'm an idiot about this stuff and I know that. Seriously, this is crimlnal mismanagement by the bank, especially as rates went up they had no business not altering such a high risk stratagem.

Motown Spartan wrote:

TravelinMan wrote:

Management definitely isn't getting a gold star for how they ran things, but U.S. Treasury bonds are supposed to be the lowest risk investment you can possibly make.

It’s not the investments, it’s the liquidity.

It took me paragraphs to say what you said in seven.

Motown Spartan wrote:

TravelinMan wrote:

Management definitely isn't getting a gold star for how they ran things, but U.S. Treasury bonds are supposed to be the lowest risk investment you can possibly make.  

It’s not the investments, it’s the liquidity.  

Yes, they took too many "long term" bonds. As I said, management isn't getting any awards. But still.... root cause.... years of idiotic Fed policy followed by rapid inflation and ham fisted attempts by the Fed to reign it in.

Trapper Gus wrote:

TravelinMan wrote:

Management definitely isn't getting a gold star for how they ran things, but U.S. Treasury bonds are supposed to be the lowest risk investment you can possibly make.  

They are, and if held to maturity they return your principle plus depending on the bond you get the discounted interest when you buy or the coupon interest over the life of the bond.  However, as any school child knows, the value of the bond fluctuates on the market as interest rates change, and thus the term of the bond needs to be matched to the term of the money they are invested from.  Given that the bank apparently allowed instant withdrawal of any amount of depositors accounts they should have invested in the shortest term securities to lower the interest to principle risks.  This really isn't high finance, and even with the long term bonds with their principle risk the bank should have offloaded a hedge to protect themselves.  I'm an idiot about this stuff and I know that.  Seriously, this is crimlnal mismanagement by the bank, especially as rates went up they had no business not altering such a high risk stratagem.

I love how, as a society, every fuck up by a business person is now "criminal." /s

TravelinMan wrote:

Trapper Gus wrote:

They are, and if held to maturity they return your principle plus depending on the bond you get the discounted interest when you buy or the coupon interest over the life of the bond.  However, as any school child knows, the value of the bond fluctuates on the market as interest rates change, and thus the term of the bond needs to be matched to the term of the money they are invested from.  Given that the bank apparently allowed instant withdrawal of any amount of depositors accounts they should have invested in the shortest term securities to lower the interest to principle risks.  This really isn't high finance, and even with the long term bonds with their principle risk the bank should have offloaded a hedge to protect themselves.  I'm an idiot about this stuff and I know that.  Seriously, this is crimlnal mismanagement by the bank, especially as rates went up they had no business not altering such a high risk stratagem.

I love how, as a society, every fuck up by a business person is now "criminal." /s

This is more than mismanagement. This was willful negligence. They intentionally had aggressive lending tactics that we unlawful just a few years ago. They knew what they were doing and got caught with their dick in the pickle slicer.

TravelinMan wrote:

Trapper Gus wrote:

They are, and if held to maturity they return your principle plus depending on the bond you get the discounted interest when you buy or the coupon interest over the life of the bond.  However, as any school child knows, the value of the bond fluctuates on the market as interest rates change, and thus the term of the bond needs to be matched to the term of the money they are invested from.  Given that the bank apparently allowed instant withdrawal of any amount of depositors accounts they should have invested in the shortest term securities to lower the interest to principle risks.  This really isn't high finance, and even with the long term bonds with their principle risk the bank should have offloaded a hedge to protect themselves.  I'm an idiot about this stuff and I know that.  Seriously, this is crimlnal mismanagement by the bank, especially as rates went up they had no business not altering such a high risk stratagem.

I love how, as a society, every fuck up by a business person is now "criminal." /s

Bankers have a fiduciary responsibility to the banks depositors, when they ignore the risks for their own personal gain they are breaking the law.

Yeah you’d have an easier time blaming the fed here if it were more than 1 decent sized bank. Instead every other bank is saying “wait lol you were doing what”. The idea that rates were going to rise at some point wasn’t exactly a novelty in 2021 or so when they bought those bonds. Not protecting yourselves against that was boneheaded stupid and not anyone else’s fault

https://www.pbs.org/wgbh/frontline/?utm_source=Iterable&utm_medium=email&utm_campaign=ICYMI&utm_content=19xxxx

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Travis of the Cosmos wrote:Yeah you’d have an easier time blaming the fed here if it were more than 1 decent sized bank. Instead every other bank is saying “wait lol you were doing what”. The idea that rates were going to rise at some point wasn’t exactly a novelty in 2021 or so when they bought those bonds. Not protecting yourselves against that was boneheaded stupid and not anyone else’s fault

Two banks.... so far.

Trapper Gus wrote:

TravelinMan wrote:

I love how, as a society, every fuck up by a business person is now "criminal."  /s

Bankers have a fiduciary responsibility to the banks depositors, when they ignore the risks for their own personal gain they are breaking the law.

You're an engineer, right? So the public isn't going to cry for you to rot in jail if you design a bad door handle.

Yet corporate pay structure is unfair? Fuck that. If you want me to lead a group of 10,000 employees and pray every day that one of them doesn't screw up and leave me facing criminal charges, you're going to have to pay me ALL the money.

TravelinMan wrote:

Travis of the Cosmos wrote:Yeah you’d have an easier time blaming the fed here if it were more than 1 decent sized bank. Instead every other bank is saying “wait lol you were doing what”. The idea that rates were going to rise at some point wasn’t exactly a novelty in 2021 or so when they bought those bonds. Not protecting yourselves against that was boneheaded stupid and not anyone else’s fault

Two banks.....so far.

Signature bank was bigger than I thought they were tbh. Fair enough.

That said I do not think that we’re in the throes of a widespread problem. Couple of banks did some monumentally stupid shit, and what happens when banks do some monumentally stupid shit happened. That does not mean that other banks were also monumentally stupid.

TravelinMan wrote:

Trapper Gus wrote:

Bankers have a fiduciary responsibility to the banks depositors, when they ignore the risks for their own personal gain they are breaking the law.

You're an engineer, right?  So the public isn't going to cry for you to rot in jail if you design a bad door handle.  

Yet corporate pay structure is unfair?  Fuck that.  If you want me to lead a group of 10,000 employees and pray every day that one of them doesn't screw up and leave me facing criminal charges, you're going to have to pay me ALL the money.

If the guy that sold millions in stock did it on the basis of insider knowledge, that is indeed very illegal.

If traps is saying they should be thrown in jail because they did something stupid, that’s silly. They were clearly not the right leaders for that bank but they didn’t take it over via a coup. The shareholders could have removed anyone they didn’t think was doing a good job as well. Unless they willfully did stupid things to tank the bank so they could sell those shares just before (which doesn’t seem very likely) then no, they shouldn’t be in prison. They should be ostracized from the industry and unable to find work for the rest of their lives tho.

TravelinMan wrote:

Trapper Gus wrote:

Bankers have a fiduciary responsibility to the banks depositors, when they ignore the risks for their own personal gain they are breaking the law.

You're an engineer, right?  So the public isn't going to cry for you to rot in jail if you design a bad door handle.  

Yet corporate pay structure is unfair?  Fuck that.  If you want me to lead a group of 10,000 employees and pray every day that one of them doesn't screw up and leave me facing criminal charges, you're going to have to pay me ALL the money.

The engineers at GM who were responsible for the ignition switch which had a foreseeable failure mode of shutting the engine off due to the weight of the keys on a key ring attached to the ignition key, a situation which they were supposed to test for, were criminally liable, and were prosecuted as individuals.

In general, engineers working for a multi-million-dollar business, incorporated or not, are not sued or prosecuted because there is much more money to be had by going after the much wealthier business.

However, engineers are suable for their designs & criminally liable also.  

If one is a licensed engineer, working independently or not, it is wise to have professional liability insurance since it is assumed as a licensed engineer that one has personal responsibility at a higher level than an engineer who is not licensed.

After I retired, I had an offer to work as an independent engineer, and part of the reason I turned it down was that it looked like I would have greater exposure to lawsuits.

Trump’s business is with foreign investors and foreign banks.

Dodd Franks was too public therefore “crippling” in his world.

They really are just going all in on “woke Bank” aren’t they? Incredible stuff.

Can anyone confirm that these republicans were all alive in 2022 when they did unexpectedly poorly largely as a result of meeting every problem with “it’s cause it’s woke” and not having any real answers for anything? Because I think they may have been napping or something.

They know their audience guys.

Travis of the Cosmos wrote:They really are just going all in on “woke Bank” aren’t they? Incredible stuff.

Can anyone confirm that these republicans were all alive in 2022 when they did unexpectedly poorly largely as a result of meeting every problem with “it’s cause it’s woke” and not having any real answers for anything? Because I think they may have been napping or something.

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DWags wrote:

Travis of the Cosmos wrote:They really are just going all in on “woke Bank” aren’t they? Incredible stuff.

Can anyone confirm that these republicans were all alive in 2022 when they did unexpectedly poorly largely as a result of meeting every problem with “it’s cause it’s woke” and not having any real answers for anything? Because I think they may have been napping or something.

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Every want to be elected official in the Republican Party sees that being anti-Woke really brings in the base, and with gerrymandering and the mob effect of people voting like their neighbors do we have this problem of smart people saying stupid things.

Liberals aren't immune from this, either. It just seems like liberals are for more positive actions, generally.

The vast vast majority of banks have 80-90% of their deposits under $250,000.

90% of SVB deposits were in excess of $250,000. That’s a huge problem.

Motown Spartan wrote:The vast vast majority of banks have 80-90% of their deposits under $250,000.  

90% of SVB deposits were in excess of $250,000. That’s a huge problem.

Seems like they had no limits on withdrawals, either.

They were running a huge liquidity risk if a run happened, which it did.