Sad. The current generation of stock market valuation (and the economy to a degree) is largely dependent on easy money, that’s been created out of thin air. While a lot of us have said that for a while, its sad that it has become normalized now. Take the money out and it collapses. SMH. With that in mind, one can argue current stock prices reflect the reality and not irrational exuberance.
Isn’t this a manifestation of justifying getting an overpriced V6 XSE because 5.49% is better than 9% or rolling in positive equity to turn a bad lease into a ‘lease hack’?
“Isn’t this a manifestation of justifying getting an overpriced V6 XSE because 5.49% is better than 9% or rolling in positive equity to turn a bad lease into a ‘lease hack’?”
They probably started asking you all the regular questions as well “going on vacation”, “is that your child”, “You married?”, “buying a used car”, “anything special?”. The more invasive the questions the smaller I make the bills.
"Your name is SVB and you have a 250k net worth: 10k in your bank account, 40k in AAPL shares (200 shares at $200), and 200k in your retirement account.
It was kind of dumb of you to put so much into retirement when you have so little on hand, but it’s not the worst thing you could do. Your retirement sometimes drops with the market but if you don’t touch it until you retire you’ll be rich.
However, inflation hits, the market starts dropping and your bank account is running lower than you want. AAPL is now 180, but you decide to sell, take a 4k loss and move 36k into your bank account. The loss hurts but is not a big deal, but your wife is concerned about why you had to sell at all.
Your wife thinks about her friends who were married to Silvergate and FTX. You are way more careful than them and are not in the same situation, but she gets scared and leaves you. Then your landlord kicks you out and her sister takes back the car she gave you. It’s too much all at once and now you’re so financially screwed that you may have to take early withdrawals on your retirement account."
I can vouch for this! Its an eeeeeeeasy hack that def boosted my score. Two payments of $1 spaced out over 2 weeks are greater than one payment of $2 every 4 weeks✔️
For the average person, I don’t think they would understand why SVB going under is getting so much . The best way I can explain is plain and simple fractional reserve banking. The bank’s “business model” is borrow short and lend long. This was exposed by the Fed’s tightening cycle in which I called out before. If the Fed continues to raise rates, there will be bigger defaults coming. Just remember the on and off ramps of the financial system is SLOW, so things are delayed by a lot.
I stand by what I said above. This is not “nonsense”. The banks NEED the value of collateral backing the loan to increase! Now, the Fed said the banks can borrow against NEGATIVE collateral. That’s insane
Money will come from DIF, which is funded by quarterly assessments levied on banks. Losses to the fund will be covered by “special assessments” from banks.
That said, taxpayers will end up footing the bill in higher bank fees and lower quality services.(not from actually “taxes”).
Biden just nationalized the us banking system for the most part. Doesn’t matter how terribly run a bank is, you’re safe. But not safe from inflation…
That’s why I bought in this am and some of my positions are up 300% now. Pacw, frb, wal all no brainers.
They allowed reserves to go to 0% under trump. Biden never repealed that the last 3 years. It’s just one continued cluster fuck while people fight left vs right and are robbed through taxation/inflation.
Tommy Lee, principal scientist at FICO, one of the two dominant credit scores, explains it this way: “Having a low utilization indicates you are using credit in a responsible manner.”
I like using the banks money then my own money. With inflation in 20% banks money makes me money with these low rates.
SVB bet heavy on Crypto.
Crypto is supposed to break government monopoly so they can’t manipulate value of ‘money’
Therefore, SVB subscribes to the Crypto premise.
SVB gets bailed out by government that basically manipulated value of ‘money’ in doing so, no matter what explanation is given.
So their loss on crypto is what led to then selling off assets to cover their losses on HTM bonds? I thought because interest rates were higher, their bonds were no longer worth what they were two years ago so they needed to cover the loss and that’s what precipitated the run on the bank.
. The best way I can explain is plain and simple fractional reserve banking. The bank’s “business model” is borrow short and lend long. This was exposed by the Fed’s tightening cycle in which I called out before. If the Fed continues to raise rates, there will be bigger defaults coming. Just remember the on and off ramps of the financial system is SLOW, so things are delayed by a lot.
