Banks Failing: Is It 2008 Again?

[CountValentine]

How about buying the bonds at par?

You want them to overpay?

[aygart]

It is not profitable. That is why many suitors with plenty of liquid assets are not taking it over.
It is in bad shape besides illiquid.
If the government makes some suitor a sweetheart deal that would be the only possibility.

My point is more that it could have been profitable and still have these issues.

[aygart]

You want them to overpay?

That is the program they are doing for other banks now.

[zh cohen]

I was talking about Silicon Valley Bank.

Was also shut down by the state.

[aygart]

https://www.cnbc.com/2023/03/12/silicon-valley-bank-signed-exclusive-banking-deals-with-some-clients.html

[CountValentine]

My point is more that it could have been profitable and still have these issues.

It has major problems and that is why there was a run on it.
As far as what the feds should do, that is another story.

[aygart]

It has major problems and that is why there was a run on it.
As far as what the feds should do, that is another story.

Yes

[Abey]

Which major player was going to take it over without a sweetheart deal?
Easy to blame someone.

supposedly they weren’t even allowed to bid in order to prevent the look of big banks profiting.

[Abey]

You want them to overpay?

They are not really overpaying just because the market is underpriced, it all comes from the same pocket, ours.

[CountValentine]

They are not really overpaying...

You know better than that.

[AsherO]

Everything will be normal tomorrow.

https://www.fdic.gov/news/press-releases/2023/pr23018.html

Then I’m right, signature will be marketed to bidders. Same for SVB I suppose.

ETA: The holding company for SVB actually leaves things ambiguous for whether it will be sold. Maybe with Signature they’re more confident about finding a buyer for some reason.

[Abey]

You know better than that.

If the Fed is the only buyer of these there is no price. That is the reality there is no buyer for all these assets

[ilherman]

Surprised it took this long for someone to go there.

Anything not true about that?

[savvydigz]

Still haven't heard any understandable reason why we the taxpayers are bailing out the depositors uninsured money which is clear risk which everyone knows of.

[savvydigz]

Anything not true about that?

It is, and it seems some are hesitant about the truth.
Say what you want, the bottom line reason this happened is because interests rates had to be raised due to inflation

[Abey]

Still haven't heard any understandable reason why we the taxpayers are bailing out the depositors uninsured money which is clear risk which everyone knows of.

Because you risk the entire banking system collapsing, at which point your options maybe very few. This is likely not costing tax payers in real money while not rewarding equity holders by wiping them out.

[Abey]

what are the second and third order affects ? Powell’s levers have been severely cut back now

Related: GS no longer expects the Fed to hike rates in March https://www.cnbc.com/2023/03/13/goldman-sachs-no-longer-expects-the-fed-to-hike-rates-in-march.html?

[savvydigz]

Because you risk the entire banking system collapsing, at which point your options maybe very few. This is likely not costing tax payers in real money while not rewarding equity holders by wiping them out.

You are risking the entire US defaulting, when will we wake up and realize that this national debt is not a joke, this can unravel faster than sivb collapse.

[Abey]

You are risking the entire US defaulting, when will we wake up and realize that this national debt is not a joke, this can unravel faster than sivb collapse.

That plays out in inflation and is a slower moving train with more levers to pull back. Your argument would’ve burned it all to ground on a moral hill we can’t afford to today, tomorrow? Regulate away

[Lurker]

Still haven't heard any understandable reason why we the taxpayers are bailing out the depositors uninsured money which is clear risk which everyone knows of.

When businesses have nowhere to operate out of safely, you kill virtually every business in the country. You can't pay vendors or payroll with Tbills. If there are no businesses, taxpayers have no jobs, and no taxes to pay. They also have no housing, food, or infrastructure of any kind. Game over.