Extremely uninformed opinion and question… What caused that bank to fail? Is it anything that could happen to online banks doing high yield savings accounts?
my understanding 1. Companies deposited a fuck ton of money into SVB during Covid boom. 2. SVB placed that money in 10yr securities with 1.6% annualized return 3. Companies burned through their cash and want/need their money 4. SVB has to take losses selling those securities before maturity since the 10yr is at 4% now.
Blows my mind how a bank can have such poor risk management. There has to be someone monitoring duration and interest rate risk, no?
I’d get out of Robinhood just cause it’s shit but you shouldn’t have to worry about your money it’s fdic insured
When I made the arguement tech was frothy and interest rates would it it hard I did not expect a Silicon Valley bank to go down.
My reason for asking is I have cash at Comenity/Bread Savings for their sweet sweet 4.162% currently. That is close to one of the highest rates offered I believe. They are FDIC Insured but was just wondering if something similar would happen to these online places with high interest rates.
I do wonder if this will spook enough people to flock to the big banks causing smaller ones to fail (sofi)
I work for a big bank and we have seen increased deposits the last couple of days. I don’t know about making any banks fail but I think you’re right about it making people question some of the smaller local and regional banks
Is there any publicized info about banks’ investments and where they’re held or getting their ROI from? It’s easy to see their reported assets and revenue but a deeper dive is probably also worth knowing
The online only banks have higher rates due to little overhead www.ibanknet.com is a good place to start
Yeah. Easy enough to not pick up or say no thanks one a year. It's been worth it for the features it has.
Some of you may be interesting in the SJIM (short Jim) ETF. An inverse Cramer ETF. https://www.marketwatch.com/investing/fund/sjim
Maybe I’m missing something but they aren’t insolvent they just made a bad bet that’ll cost em like 2-3B. Seems like all these folks should get 97c on their dollar? They’ll have to liquidate those securities and their customers will take the hit, right?
Correct. A somewhat simple mismatch of duration with risk profile. anybody seen anything about who had short positions on this? Someone made fuck you money in the last 48 hours on this. Not that I’m sophisticated enough or have enough time to track this, but a top 20 bank that had this kind of public facing exposure has to have been an obvious target for some short funds.
my brother has been in tech for over 20 years at this point and has been loving the libertarian tech bro meltdowns and just shedding their ideology when they're at risk. Sacks tweets have been getting sent to me regularly as he met him a few times and says he talks like a psycho cult leader.
Seen some Seeking Alpha articles that were calling this a few months ago, saw someone on Reddit turned $7.5k options into ~$2mm
JPM’s option collar is 3638 and I think 4065 on 3/31, will be interesting to see if we get close to either by then.
Feels like the most important week in Macro in a while, lots of data this week on inflation combined with an outside factor that has parts of the market pricing the Fed pausing/cutting. All this precede the Fed meeting next week.
I’m more interested to see how the bond market reacts come Monday, it had an aggressive move on Friday wonder if that unwinds.