Banks Failing: Is It 2008 Again?

[ilherman]

Is no one else concerned to be putting so much money into Tbills? with the debt so high and economy so volatile and a need to bail out banks...it seems so unstable to invest in the government

Well.... When / If you start being worried about T bills that is the end of the end..

[ExGingi]

A BIT OF FINANCE
In the 80s and 90s, on average, one bank failed (and closed) every other day.
Since 2000, we have had an average of 1 bank failing & closing every week.

So ignore those technologists who know nothing of financial history.

— Nassim Nicholas Taleb (@nntaleb) March 12, 2023

[PlatinumGuy]

Why can’t the gov pay for the long term investments that the bank has. Everyone keeps their money, bank stays open, economy stays stable and government makes a profit(in the long term at least)
Just wondering!!

Because it isn't enough to cover all deposits. No bank can withstand a run without the government guaranteeing deposits.

[Abey]

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm every depositor at every bank backstopped at 100%

[haltkup]

sadly signature is closed

[Abey]

Bravo ! Mr president and Fed did the right thing here
“Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed”
https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm

I would also like to see regulatory rewrite but that’s for tomorrow for now let’s celebrate this victory

[liosac]

sadly signature is closed

Major heimishe bank. Tho whose who of heimishe companies banked at signature.

[ExGingi]

https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/eye-on-the-market/silicon-valley-bank-failure-amv.pdf

[ExGingi]

sadly signature is closed

https://www.cnbc.com/2023/03/12/regulators-close-new-yorks-signature-bank-citing-systemic-risk.html

[Euclid]

Major heimishe bank. Tho whose who of heimishe companies banked at signature.

why? What was special about them? And what issues do they have now? Too focused on CRE?

[Abey]

Major heimishe bank. Tho whose who of heimishe companies banked at signature.

that sound that you are hearing is all of them releasing a collective sigh of relief

[Abey]

why? What was special about them? And what issues do they have now? Too focused on CRE?

too focused on a single sector. Also had long term maturity debt etc

[ExGingi]

The saddest thing about the whole SVB collapse are the rank and file people at SVB who are in their 50’s & 60’s who had much of their net worth/401K’s tied up in $SIVB. Wiped out. With 6,000+ employees, a lot of folks at the bank are having the worst weekend of their lives.

— BowTiedBroke (@BowTiedBroke) March 12, 2023

[CountValentine]

Bravo ! Mr president and Fed did the right thing here
“Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed”
https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm

I would also like to see regulatory rewrite but that’s for tomorrow for now let’s celebrate this victory

Did they have a choice?
The regulatory rewrite needs to be done now while the iron is hot.

[Definitions]

I was about to put money into my Schwab SWYNX target fund (Roth IRA). I'm assuming it would be smart to hold off for a week or so right?

[dealmaster]

that sound that you are hearing is all of them releasing a collective sigh of relief

is Signature also going to be 100% covered?

[ExGingi]

Unlike ‘08 with MBS nor being worth sh*t this is a time problem. Simple solution? Buy back those treasuries at par. Otherwise this *could* become a big problem at which point options will be far limited

Excellent, in my opinion.

Funding is at 1-year OIS (basically 1-year market-implied Fed Funds) plus a meagre 10 bps spread on top.

1 year guaranteed liquidity at Fed Funds plus 10 bps posting collateral deep in the mud but valued at par.

Quite the deal.

5/ pic.twitter.com/3BxUC3weyE

— Alf (@MacroAlf) March 12, 2023

[liosac]

Excellent, in my opinion.

Funding is at 1-year OIS (basically 1-year market-implied Fed Funds) plus a meagre 10 bps spread on top.

1 year guaranteed liquidity at Fed Funds plus 10 bps posting collateral deep in the mud but valued at par.

Quite the deal.

5/ pic.twitter.com/3BxUC3weyE

— Alf (@MacroAlf) March 12, 2023

Quite the reward for the other bad players that didn’t bother hedging risk but I guess there was little choice.

[neveryou]

why? What was special about them? And what issues do they have now? Too focused on CRE?

Didn't close accounts down like the big banks for doing shady stuff

[Abey]

Did they have a choice?
The regulatory rewrite needs to be done now while the iron is hot.

if they don’t force Mark to market of assets this will repeat. I hope they are wise.