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Silicon Valley Bank / SIVBSVB Financial Group stock tumbled more than 42% in premarket trades Friday on fears of a run on the bank, as analysts downgraded the company and reports surfaced of funds advising clients to pull their money from the parent company of Silicon Valley Bank. Founders Fund, the San Francisco-based venture-capital fund co-founded by Peter Thiel, has advised companies to pull their money, according to a Bloomberg News report citing people familiar with the matter.In a separate development, The Wall Street Journal reported that SVB Financial Group took out $15 billion of loans from the Federal Home Loan Bank of San Francisco at the end of 2022, compared to zero in the year-ago period, to assure liquidity. The bank pledged collateral of about three times what it borrowed to back the advances, the WSJ reported, around the same time it sustained a 13%, or $25 billion decline in deposits in the final three quarters of 2022, the WSJ reported. The steep losses Friday came after SVB Financial SIVB, ended down 60% in the regular trading day after it disclosed large losses from securities sales and announcing a dilutive stock offering along with a profit warning. The bank was unprepared for rising interest rates which have hit its net interest income and net interest margin the troubles at SVB seemed unlikely to spread widely throughout the banking system. Morgan Stanley said in a note to clients that SVB’s issues were “highly idiosyncratic.” Also on Wednesday, SVB announced it sold $21 billion worth of securities to raise cash and reposition its balance sheet toward assets with a shorter duration, which are less exposed to rising interest rates. SVB estimated that it took a $1.8 billion loss on that sale.
SShort
by moonypto
16
USDC & SVBIn the past 24 hours, the trading volume of the Bybit USDC/USDT perpetual contract pair exceeded an astonishing $380 million, and the annualized funding rate was as high as 740% After Friday's stunning collapse of Silicon Valley Bank, questions swirled around the exposure of one of crypto's top firms, Circle, the issuer of the second-largest stablecoin, USDC. In its March attestation, Circle had revealed that part of its $9.88 billion in cash reserves was held at SVB, although it did not disclose the total amount. Following the collapse of SVB, withdrawals from USDC mounted, with the crypto intelligence platform Nansen showing over $1 billion in redemptions from the stablecoin since SVB's shutdown. USDC has a market cap just north of $40 billion. As USDC lost its $1 peg across different crypto exchanges amid withdrawals, Circle sought to instill confidence, with the company tweeting at 6:50 pm ET that it would continue to operate normally, sharing that SVB was one of the six banking partners it uses for the 25% of its reserves that it keeps in cash, although still not disclosing the amount held at SVB. As investors continued to move out of USDC, Binance announced it would be temporarily suspending its auto-conversion policy of USDC to its BUSD stablecoin, citing "market conditions" and describing the action as a "normal risk-management procedural step." At 10:11 PM ET, Circle offered more clarity, tweeting that $3.3 billion—or around 8%—of its reserves remained at SVB, revealing that wires initiated on Thursday to remove balances from the bank had not been processed. Dante Disparte, Circle's chief strategy officer, tweeted soon after that Circle was protecting USDC "from a black swan failure in the banking system." Meanwhile, USDC's peg continued to weaken, with the token trading at $0.92 against tether on Kraken as of 10:40 pm ET. Coinbase announced it would be temporarily pausing conversions from USDC to USD over the weekend while banks are closed, adding that during periods of heightened activity, conversions rely on USD transfers from banks that clear during normal banking hours. Coinbase worked with Circle to create USDC, launching the token in 2018. After the FDIC placed SVB into receivership on Friday, the weekend will prove an uncertain time as the financial world waits to see if the U.S. government is able to find a buyer for the failed bank or will otherwise backstop losses, with insured deposits only backed up to $250,000. Former Treasury Secretary Lawrence Summers called for depositors to be paid back in full. While the crypto industry seems to be safe from SVB contagion for now, with much of the sector moving to Signature Bank and other partners in the wake of Wednesday's voluntary liquidation of Silvergate, Circle could prove the exception. The firm is a fundamental cog in the crypto ecosystem, with USDC serving as a crucial on-ramp into crypto for investors globally. Some onlookers expressed confidence that Circle would be able to weather the storm. The investor Adam Cochran tweeted that Circle could cover a possible $3.3 billion gap from the interest it collects from reserves, a sale share, or other venture debt. "This is a non-issue in my mind," he wrote. The hedge fund North Rock Digital CEO Hal Press said that they has continued to buy more USDC at $0.88, having previously bought at $0.935; he believes that USDC will end up fully repegging, a worst case 70% of the cash via asset sales USDC would still be worth 93c.
CRYPTOCAP:USDC
by moonypto
Western Alliance | WALWestern Alliance shares pulled back from their session lows after the Arizona-based bank denied it was exploring a potential sale The Arizona bank described a report in the Financial Times that it was considering a potential sale of all or part of its business as “categorically false in all respects”, adding: “Western Alliance is not exploring a sale, nor has it hired an advisor to explore strategic options.” Two people briefed on internal discussions had told the FT that the bank, which has a FWB:2BN market capitalisation, was exploring strategic options including a potential sale of all or part of its business. The Arizona-based bank, which has $65bn of assets, fell by as much as 45 per cent after the FT report, before recovering to trade 39 per cent lower. Earlier on Thursday, PacWest, another bank that has unnerved investors, announced that it was exploring its options. Shares of US regional banks have come under heavy selling pressure this week after the regulator-brokered takeover of First Republic by JPMorgan Chase failed to restore confidence in the sector. In a press conference on Wednesday, US Federal Reserve chair Jay Powell tried to soothe concerns about the bank turmoil, saying conditions across the sector had “broadly improved” since the period of “severe stress” in early March and that the system as a whole was “sound”. US officials are watching deposit flows more closely than share prices, which Powell said on Wednesday had stabilised, given the view that they are a better indicator of the health of a bank. “The resolution and sale of First Republic is an important step toward drawing a line under that period of severe stress,” he said before PacWest announced plans to explore a potential sale. Western Alliance said on Wednesday that total deposits had risen to $48.8bn from $47.6bn at the end of March. It said it had “not experienced unusual deposit flows following the sale of First Republic”. It said 74 per cent of deposits were covered by Federal Deposit Insurance Corporation guarantees. Western Alliance for much of the past two decades was run by Robert Sarver, the former owner of the Phoenix Suns NBA basketball franchise. Earlier this year, Sarver was forced to sell the Suns after an investigation found evidence that under his leadership the team had created a hostile environment both for black people and women. Sarver was fined $10mn and suspended from the NBA and the WNBA for a year. Sarver, who had held the top role at Western Alliance since 2003, stepped down as chair of the bank last year as the NBA controversy unfolded.
NYSE:WALShort
by moonypto
2
PacWest Bancorp | PACWPacWest Bancorp sinks 56% in after hours following news the bank is exploring a sale but Powell said the US banking sector is strong! PacWest Bank, confirmed Thursday that it is exploring “all strategic options” after its share price was cut in half in after-hours trading following a Bloomberg report that it was considering a sale. “Exploring strategic options” is Wall Street lingo for “please help.” The last bank to announce it was exploring strategic options was First Republic Bank. That regional bank failed Monday, and JPMorgan purchased most of its assets. “In accordance with normal practices the company and its board of directors continuously review strategic options,” PacWest said in a statement. “Recently, the company has been approached by several potential partners and investors, discussions are ongoing. The company will continue to evaluate all options to maximize shareholder value.” The regional bank is assessing options, including a possible sale, and bringing in advisors to evaluate longer-term plans for the business,Piper Sandler and Stephens are the two firms advising PacWest, the person said. The shares of many West Coast regional banks have been hit particularly hard since the collapse of Silicon Valley Bank in March, in part because of concerns that their customer bases are similar. This week, First Republic Bank was seized by regulators and sold to JPMorgan Chase. The Los Angeles based PacWest has a roughly $750 million market cap, and is down by 72% this year. On Wednesday, PacWest shares declined nearly 2% during the regular session, and notched their fifth straight losing day. Other regional banks declined in extended trading following the report, with the SPDR S&P Regional Banking ETF shedding 5.3%. Shares of Western Alliance Bancorp dropped 27%, while Comerica slid 10%. KeyCorp shares fell 7%. PacWest reported that total deposits declined more than $5 billion in the first quarter to $28.2 billion as of March 31. However, the company said that it saw a net gain of $1.1 billion in deposits from March 20 until quarter end. PacWest also said that deposits grew by another $700 million from March 31 through April 24. As with many other US regional banks, the value of PacWest’s loans and bond holdings has crumbled as interest rates have surged. Customers yanked their deposits in March out of fear that the bank could fail and they’d be left holding the bag. Although the Federal Deposit Insurance Corporation insures accounts holding up to $250,000, many businesses have a lot more money in their accounts, much of which is uninsured. that left the bank and its competitors with a potential problem: If customers kept drawing down their accounts, the bank may run out of cash to pay them.that made investors nervous Michael Burry : Lawrence, I found something really interesting Lawrence Fields : Great, Michael. Whenever you find something interesting, we all tend to make money. What stock are you valuing? Burry : I want to SHORT the whole Banking system ! Whos ready for the BIG SHORT 2 ?
PShort
by moonypto
4
TFC in the "Valley of Risk"Preface and Disclaimer: I have a long term stake in Truist Financial Corp NYSE:TFC :( I wondered "why" Truist, company I have held for a very long time (when it was BB&T) would have been caught up in this contagion of small bank risk fears. An article by Seeking Alpha sheds some light on it: seekingalpha.com TL;DR, over the weekend analysis dug into their books and found that Truist was exposed to some of the same risk factors, namely low yield securities, as Silicon Valley Bank NASDAQ:SIVB . It is not existential risk, as Truist has a much better Deposit ratio than SVB, but it may impact the bank's profitability in the future. This fiasco is an example of why I do not assume bankers, Wall Street analysts, or "whales" operate at some vastly greater intelligence. In hindsight... buying up tons of low yield treasuries does not seem risky. But once something happened... suddenly EVERYONE realizes how risky it actually is and now EVERYONE is paying attention. There are thousands of people earning high 6 figs to look at and data crunch these numbers every day for months and only NOW realize they have a systemic risk problem. In my own analysis which I study and try to apply dispassionately I too can look back in hindsight at the price action of NYSE:TFC and see a clear warning sign I missed. In the summer of 2022 TFC was hovering around the 50% Retracement Level support from the COVID low to All Time High. I study and trade this key level every day on every timeframe. It's a technical analysis that I have learned to trust. By October 2022 price had clearly violated and broken the level as a part of the broader market selloff. This bearish trend that persisted through 2022 was not secular to TFC or banking. What it should demonstrate though is a secular lack strength to HOLD its own trend despite market conditions. Often price will hesitate and/or recapture said level... consolidating around it. The damage to the bullish trend though is already done and if one ignores these warnings the position is in danger of falling into what I call "The Valley of Risk" where there are no more supports until the last major low (The COVID low) and sometimes even beyond. That is where TFC has fallen today on this recent FUD. I still believe that TFC is a strong bank. This move down has put it into some spectacular dividend yield territory (6.45% as of writing). For a pure dividend play for me it is a hold. But as a technical trader I put this in my catalog of examples of how a bullish trend gives ample warning of failure before it truly drops.
NYSE:TFCLong
by norok
3
JPM / JP Morgan - Don't Gamble On Regional BanksI know that whenever something drops by 30 or 50 or 70 percent in one or two days it seems like you might be able to smash buy and ride the bounce back to the top, but just take a look at how well that worked out for tech stocks once the market started to correct at the end of 2021, or just take a look at how well that worked for Silicon Valley Bank dip buyers who found their shares worth $0 in a few hours. JP Morgan and the other big American banks aren't just "big American banks," but the financial arm of the United States' military industrial complex. Moreover, they're something that's become a pillar of the entire world's financial ecosystem. The heart of the world's economy is in Manhattan, but they're also the ones responsible for providing a financial life line (a blood transfusion) to the Chinese Communist Party all of these years. Here's some things everyone should think about: 1. Regional banks are not a buy, because they need to be eliminated for Central Bank Digital Currencies 2. SWIFT itself is expanding its CBDC platform pilot globally after a test run that involved a JP Morgan-created centralized fork of Ethereum . 3. CBDCs are required for the global implementation of the CCP's social credit credit system 4. CBDCs mean citizen and small business banking becomes centralized in Federal Reserve proxy accounts ran through the biggest banks 5. Welcome to communism. The purpose of all of this is to install communism for the purposes of attempting to change the human living condition. Credit Suisse is probably going to implode for real and that's going to cause some chaos for the markets. This play is pretty much a mirror of the 2008 GFC with Bear Sterns, which everyone would do well to educate themselves on how that went down . The problem with Central Bank QE isn't all the Libertarian crap you've been told. The problem is that deposits are a liability for banks because they have to pay interest on them, and so they need to seek yield. Seeking yield on a very large position is very hard, because guys like JPM and Blackrock and Vanguard happen to make the markets, and markets are a euphemism for a casino, and casinos are zero sum games where there's a small number of winners and a large number of losers. And so when there's no interest rates, banks have to take risks to generate cashflow to pay interest to the very, very large depositors. When QE was hot that seemed to have meant long bonds, long equities. And then the Fed raised rates 5 percent while they were holding a lot of equities and bonds and now those bonds and equities aren't worth very much. So they're red on their positions and can't HODL through it because of bank runs and go under. It's as simple as that and it was an engineered play for smaller banks to be destroyed and then the big banks buy the liquidations. It's the same as how whales kill sharks by holding them upside down in the water, which makes them disoriented and paralyzed, and then the whales eat their livers and leave them to die. JPM on the monthly is not likely to have topped and gives you no reason to think there's a financial crash or any real bearishness brewing: Yet the weekly shows you confluence between Fib levels and gaps, and that it's just too early to go long, and kind of scary to scalp short to boot: JPM's double tops at $145 made very little sense at the time, and that's because, in my opinion, they were short their own stock under $150 in anticipation of what everyone who's running big data analysis for real knew, that SIVB and SBNY and SI would collapse, that CS was a bloated corpse in the river that the Swiss National Bank couldn't save, and that it was time to start taking down the regional banks by using the crisis as an opportunity. Naturally, being a bank and part of the sector, this will give grounds to make JPM's shares drop, so they just sell, and then buy back, and then give themselves bonuses and go for happy hour with cocaine and strippers when the drama is over because someone buys CS and the Fed pauses hikes, and they pump their own stock back to $200. Another thing is that the narrative is that equities are *going2themoon* because the Federal Reserve just HAS to stop hiking rates now. Look at how much damage the rate hikes caused! They just have to stop hiking now! They probably won't. FOMC hasn't led to a dumpster fire in quite a few months and you should be concerned about that. After Wednesday's FOMC, the next one afterwards is May 2. Expect them to pivot then, not now, and for May, June, July to become another "most hated rally" for bears. Except this time it won't be a bear market rally, but a bump and run reversal, that pumps tech and other dumpster trash to a new ATH that makes bears blow their accounts. Look for longs in the $110 range on JPM and expect the October bottom to hold, because it's called a pivot for a reason, sons. It's JP Morgan. This kind of disaster in the markets today was arranged by them, and is not something they're personally subject to. The disasters that lie ahead for the current regime because of what they've been doing to help the CCP as it persecutes Falun Gong over the last 24 years are retribution that they haven't arranged and that nobody can dodge, and something that will catch the entire market off guard. But for now, you can get $40 a share if you buy in the $110s and sell at $150. And the time horizon is probably literally no later than the end of May, too. Don't go long on regional banks. Go long on the big banks. And then get out and be careful, because everything in this world is about to change very quickly, and human beings are not going to be able to bear the terribleness of what happens when the regime goes to install communism worldwide.
NYSE:JPMLong
by LordWrymouth
10
Bitcoin is doing exactly what it was designed to do!Traders, These are the times in history when we are supposed to see heroes rise to the occasion. With the trust in the U.S. dollar faltering a bit, lead by the failures of some major banks (Silicon, Silicon Valley, Signature, Credit Suisse), the time for Bitcoin to shine is now. And it has! To some, the recent move up in Bitcoin came as a surprise. However, it shouldn't have been. This is what Bitcoin was designed for, to provide a hedge against the failures of large centralized institutions and the eventual inherent risk of holding the U.S. dollar. And it's doing exactly that remarkably well. We should expect this type of response from Bitcoin again in the future as we continue to see cracks in the system laid bare! Stew
CRYPTOCAP:BTC.D
by stewdamus
4
The FED HAS already pivoted! Who cares what the FED does next?Apologies for the click-baity title, but I did want to get your attention to make (once again) my point that inflation is ON now and that the FED has actually pivoted while many are watching and don't see it that way. Let me explain. Back when the FED started raising rates rapidly I grew worried that at this unprecedented pace of rate hikes, something would break. I stated this all along through each of my post. Foolish people and businesses simply do not have the acumen to hedge against the rapidity of dried-up liquidity in the markets. I did not know the banks would become the first culprit exposed in their foolish investment endeavors. But here we are. Banks are failing because of their own stupidity and guess who gets to pay for it once again? That's right, you and I do through the continued devaluation of our U.S. dollar. "But the dollar's getting stronger", you emphatically retort. Yes. It was. As the FED moved to increase rates in a reactionary manner, as they always are, the dollar did gain strength and is currently fairly strong, relatively speaking. However, things will soon change and many do not even know it as they are focused on the wrong indicator, FED rate hike action and future interest rates. While this is certainly still important, it does not tell the whole story. As you know, I have been calling for a pause or pivot from the FED soon. That pivot has already come. "How so?", you asked. The FED has not articulated strong indicative language regarding a pause or pivot. That's true. But while the banks were failing, the FED did begin to guarantee depositors their money due to 'systemic risks'. I've heard this before (think 2008 and the BIG 3). In guaranteeing depositors their funds, the FED mushroomed its balance sheet by roughly $300 billion dollars last week alone! And this may just be the beginning! Incredible. This is the pivot that I was looking for from the FED. So, while everyone else continues to focus on what the FED will do next in terms of interest rates, savvy investors have already spotted the change and recognize that it's now inflation ON! This subtle (or not so subtle, pending perspective) change in direction correlates with three important thesis points that I have been making all along: That something will break That the FED will pause/pivot That we will see a blowoff top in the US stock market It also aligns with current technicals. As you can observe from the chart above, price action has retested our macro-downtrend line precisely as anticipated, has bounced from there as anticipated, and is currently trending up as anticipated. I do believe this is the beginning of our blowoff top with a price target of US500 to be at or around $5,500 to $6k by early to late fall. Maybe early winter. Timing is difficult. Best to you all, Stew
ULong
by stewdamus
2
The SVB Collapse and Why It Matters To YouInteresting situation with the collapse of SVB (SIVB), the people have yet to realize we control the market not the central planners. and the collapse of SVB is a realization of that power. So , here is what i know from the very little articles and podcasts that I listen to and I will give you guys the why its important. From what i know is that SVB business model was somewhat risky in the first place, and their main consumer base was startups, and tech startups. hence the name Silicon Valley portion of Silicon Valley Bank. Now a little money education... in the world of money and currency (remember currency as current it will become important later) there is a concept called the velocity of money, basically the volatility of money. for my stock traders think the VIX. when the VIX is low there is no money to be made because money is not moving. but when the VIX is high there is plenty of money going around so why not use your dollars as napkins, right or "fun coupons"! this is the velocity of money the faster a person can make money move the more money they stand to make. the banks know this. So when you go to the bank and deposit your check your money is already out the door into something else before you're able to but your wallet in your bag or pocket. this happens because of what is called as the "fractional reserve system" and to be honest its a "F"ed up idea but has worked thus far. what this system means for every dollar you put into the bank, the bank can lend out 10$. A bank is a business it makes its profits by lending money, and when you save your money it cost the bank money, because of your .01% interest rate. the reason for the big push for open accounts is because the more open accounts the bank has means the more money they have liquid, which means the more they can loan out, which means the more they stand to profit. now as an insurance policy the US government makes the banks keep a fraction of their total account balances on site incase of what they call a "bank run" happens (get to what a bank run is later) Now, normally you dont notice this or even care because when you go to the bank and want to pull 100$ from your account its no big deal whats a 100$ when your dealing with 100s of thousands. you want a 100$ you get 100$ instantly. But want to see the system become a problem for you, if you have more than lets say 25,000$ or more in an account go try to pull ALL that money out and see what type of road blocks you encounter. they will make you give ID, reasons for shutting down the account, basically your first born child and your blood type. partly is because they really want to know why you're closing the account, because thats profits walking out the door. but the main reason is, they have to reach out to sister branches and other banks to pool that money together to be able to give it to you and this typically happens like over night. so if you think you're about to waltz into your local bank and demand a 25,000$ check right then and there you're sadly mistaken. the same exact process happens when you take out a mortgage, now your talking $200K and up so now there are more road blocks. whether you're the buyer or the seller. you sell your house for 500K and you think that check you deposited is there right when you get it... yeah its not! back to the currency comment money is now a currency it has to keep moving to keep its value. think of it as a river, mostly you can drink water from a river and be okay because bacteria cannot grow in moving water but drink water out of a pond and you just might catch Syphilis (sarcasm intended). money is the same way, the faster you can make it move the more you stand to make and the healthier the money is, if take money out of the river and stick it in your pond as a savings account inflation will eat it alive making it very unhealthy. Even historically before all this crazy inflation started happening the savings rate in a savings account was like 0.01% and inflation was around 2 percent. Now the importance of this lays with the SVB. When looking at their business model it seems solid... "invest in high beta companies, or higher risk endeavors, then to off set this risk we will load up on the safest paper assets money can buy... the US 10Y bond." Officially the US hasn't defaulted on loans before... i mean we will print more money before we default. I mean it sounds like counterfeiting if you ask me, but who am I just a low key, low level, low volume trader with a computer living in my moms basement :) sarcasm... or is it?! Well from the looks of it it would seem SVB bought a ton of these 10Y bonds in 2021 when the economy was ripping and roaring. So, when bond yields are down their prices are way up. So in the full swing of the "roaring 20's" yields were around 1.12X or keeping it simpler 1.1XX. so that must mean the value must of been sky high. My only rational thought for this type of purchase was the risk manager must of thought he could off load the bonds in the bond market for a nice profit thinking good times were going to continue. On the surface it seems okay high risk business model with a low risk counter weight. But "We the People" were leaving SVB, and going back to what i said about taking your 25,000$ savings out, and they were running out of reserves and their bonds were worth less than the paper they were "printed" on, so they filed a loss on their report. on the surface this was fine, because only die hards read a companies 10Q or 8A but all it takes is one... and there is always that one Guy... and not this Regular Guy either. I personally dont like the instability of the tech industry. i mean i do believe we will make a full blown terminator but i dont want to gamble on which company that is regardless of what the gain is... might as well go gamble in my opinion. So, because there was a mass exodus of accounts they were having a hard time fill orders so file your 8A detailing you're offering more stocks to drum up some money and it falls flat. people read said 8A and see that you dont have cash so the word got out and the consumers made a bank run. Dont get it twisted either this can happen to any commercial bank JP Morgan, BofA, Chase, Citi, Credit Suisse and the like. a bank run is when the majority of depositors want their money back now and they do it in close succession of each other forcing the bank to say "we dont have your money" so they in essence "run" to the "bank" to get their worthless paper. Now, what i just learned is back in '08 our amazing government passed legislation basically stating they will no longer bail out banks. (honestly if you guys know the piece of legislation please post it in the comments) I agree with this legislation because when I lost 15k on a bad USDCHF trade 7-8 years ago the government didnt bail me out. that was all my money... just gone in a matter of seconds. So the US government came out and said " we will make sure all depositors will get their monies back... How? step in Bail-Ins And again a bail in is something i literally just learned about... i swear at this point were just making -ish up at this point... ok so we know what a bail out is... basically the US government funnels all this cash into a failing business(s) and the tax payer picks up the tab. so what is a bail-in?... glad you asked a bail-in is when the depositors pick up the tab... How? well the FDIC picks up the first $250K and anything over that 250K is now funneled into bank to help offset the loss. so if you have $500K in the bank the first $250K is yours... uncle sam gives it back via FDIC (which that money has been long gone spent, so i dont know where theyre going to pull money from to keep this facade of the FDIC up) and the next $250K is the banks... So congratulations you have just become a unwillingly silent partner of a failing bank. -ishy news is that the current administration is trying to give more power back to the IRS and bring it back to its glory days like it was in the 80's so you wont be able to claim those losses on your taxes, if you had a business friendly administration you might actually have a fighting chance. i have a feeling the whole world is watching what is about to happen, because the entire banking system relies on high value accounts. if the US says tough luck that might send uneasy shock waves to all the high income earners and might make them want to pull their funds out of the banking system... there is a very interesting article on Credit Suisse that i want to read so ciao!
TVC:US10Y
by ARegularGuy
1
1929 styled Bank Run Starting Tomorrow !!!SIVB SVB Financial Group Buyout or Bail Out, the only options! SVB was the second-largest banking failure in the history of the United States! Only 2.7% of Silicon Valley Bank deposits are less than $250,000. Meaning, 97.3% aren't FDIC insured, resulting in over $160 billion of uninsured customer deposits. Roughly 50% of the US venture capital-funded startups are clients of SVB, potentially putting 65,000 startups at risk of payroll disruptions. Such a situation could have significant consequences for the startup and tech sectors. SVB did business with FTX, plus many other formerly overvalued tech companies. With $210 billion in assets, $SIBV was the 15th largest bank in the US in terms of deposits. SVB held $91 billion in bond portfolio, classified as “held-to-maturity” securities, with an yield of 1.78! SVB CEO Greg Becker explained that the bank was selling its available-for-sale bond portfolio for $21 billion due to anticipated sustained higher interest rates, challenging conditions in both public and private markets, and elevated cash burn levels from its clients. This move resulted in a total loss of $1.8 billion for the bank. I think we are going to see a government take over of SIVB SVB Financial Group on Monday. In case they don’t do that, a 1929 styled bank run starting tomorrow! So i don’t think they have a choice other than bail out SVB Financial. In case of a Takeover, the buyout area should be $12.75 - $32. This is my Price Target for SIVB. 2020 Covid Lockdown level was $128 so the stock is Still expensive right now! Looking forward to read your opinion about it!
SShort
by TopgOptions
SVB, Silvergate, Signature: 2008 Again?Hi Traders, Investors and Speculators of the Charts 📈📉 Ev here, committed to keep you updated on the latest major event that's taking the world by storm: The recent collapse of three major banks: Silicon Valley Bank $SIVB , Silvergate Capital Corporation $SI and now Signature Bank $SBNY . It has since came to light that many cryptocurrency companies had vested interest in thee bank including Coinbase, Circle and Ripple. Furthermore, over a dozen Chinese-based firms confirmed their exposure to SVB. Many other companies have since confirmed exposure including Roku ($487 million) , Etsy $ETSY , BlockFi and more. Most recently: 🛑 HSBC agreed to acquires UK branch of SVB for 1 pound . Yes, yes you read that correctly. 🛑 Just a few hours ago, signature Bank, a New York financial institution with a big real estate lending business that had recently made a play to win cryptocurrency deposits, closed its doors Sunday after regulators said that keeping the bank open could threaten the stability of the entire financial system. 🛑 It comes to light that SVB executives sold large portions of their shares earlier in February: - CEO George B. sells 11% on 27 Feb - General Counsil Michael Z. sells 19% 5 Feb - CFO Daniel B. sells 32% 27 Feb - CMO Michelle D. sells 25% 1 Feb Are we seeing some shocking similarities to the 2008 market crash? The global financial crisis of 2008 was caused by a complex interplay of factors, including the collapse of several major banks. Some of the notable banks that collapsed or were bailed out during the crisis: 1) Lehman Brothers: This investment bank filed for bankruptcy on September 15, 2008, after it became clear that it was heavily exposed to toxic mortgage-backed securities. 2) Bear Stearns: This investment bank was acquired by JPMorgan Chase in a government-backed bailout in March 2008, after it became clear that it was struggling to meet its financial obligations. 3) Washington Mutual: This savings and loan bank was seized by federal regulators in September 2008 and its assets were sold to JPMorgan Chase. 4) Merrill Lynch: This investment bank was acquired by Bank of America in a government-brokered deal in September 2008, after it became clear that it was heavily exposed to mortgage-backed securities. 5) Wachovia: This commercial bank was acquired by Wells Fargo in a government-brokered deal in October 2008, after it became clear that it was heavily exposed to risky mortgage assets. These are just a few of the banks that experienced significant financial difficulties during the crisis. The collapse of these institutions had a profound impact on the global economy, leading to widespread job losses, foreclosures, and economic turmoil. In case you missed the earlier updates and important facts: In the past few weeks, there have been two significant bank failures in the United States that have sent shockwaves throughout the financial world. The collapse of Silicon Valley Bank and Silvergate Bank has sparked concerns about the stability of the banking system and the future of the crypto industry. The failure of these banks highlights the fragility of the financial system and the challenges faced by institutions that operate in high-risk sectors like tech and crypto. Silicon Valley Bank ( SVB ) was closed by the FDIC on March 9 due to its heavy losses caused by the downturn in technology stocks and the U.S. Federal Reserve's aggressive plan to increase interest rates. The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the US Congress in 1933 to maintain stability and public confidence in the nation's financial system. The FDIC provides deposit insurance that guarantees the safety of deposits in member banks, up to a certain limit. In the event that a member bank fails, the FDIC will step in to insure deposits, provide assistance to depositors, and liquidate the failed bank's assets. The FDIC also regulates and supervises member banks, as well as conducts research and analysis on the banking industry. Silicon Valley Bank bought bonds using customers' deposits, but the value of those investments fell as interest rates rose. This is usually not a problem for banks, but Silicon Valley Bank's customers were largely startups that needed cash. Venture capital funding was drying up, and companies were tapping their existing funds deposited with Silicon Valley Bank, which was at the center of the tech startup universe. In response to this liquidity crisis, SVB sold a $21bn bond portfolio at a loss of $1.8 billion. The bank attempted to fill the solvency hole with a combined equity offering of $2.25bn on March 8, but the attempt failed. This is the largest failure of a financial institution in the United States since Washington Mutual collapsed more than a decade ago. The closure of SVB had an immediate effect on some startups that had ties to the bank, as they scrambled to pay their workers and feared having to pause projects or lay off employees until they could access their funds. SVB , the 16th largest bank in the US, had assets of $209 billion, with more than 50% of its investments tied up in long-term securities, including exposure to the Silicon Valley tech and health startup world. The bank's sudden collapse has raised questions about its risk management practices, and the impact of its closure on its clients, who are largely startups and wealthy tech workers. The bank's large uninsured deposits and exposure to high-risk sectors like tech and crypto contributed to its downfall. But SVB isn't the only one... Silvergate Bank, which has been a significant player in the crypto world, has announced that it is closing and returning deposits. The bank's holding company, Silvergate Capital Corporation, stated that the decision was made "in light of recent industry and regulatory developments." The closure follows the loss of one billion dollars in a quarter after customers withdrew $8.1 billion, and a subsequent filing in March revealing even worse financials. The closure of Silvergate Bank is concerning for the crypto industry, as it may lead to companies turning to less regulated institutions for their banking needs, potentially making the space even riskier. Coinbase, Crypto.com, and Paxos have already started moving away from the bank. The collapse of the bank will likely draw scrutiny from lawmakers who are concerned about the crypto contagion affecting the traditional financial sector. The Silvergate Exchange Network, which allowed crypto exchanges like Coinbase, Gemini, and Kraken to move money between themselves and other institutions, has also been shut down. The bank's financial struggles have been ongoing for some time, with some of its high-profile clients like FTX and Genesis also experiencing challenges. Silvergate's collapse raises concerns about the future of the crypto industry, as companies may turn to less regulated institutions for their banking needs, potentially making the space even riskier for everyone involved. The bank's failure is also likely to draw scrutiny from lawmakers concerned about the potential contagion of the crypto industry on the traditional financial sector. Late Friday night Coinbase, a popular cryptocurrency exchange, announced that it would suspend conversions for the USDC stablecoin. This led to a rush of people trying to sell their USDC holdings, causing it to depeg from its value of $1 and trade as low as $0.87 before recovering to $0.92. Another stablecoin, Dai, also depegged and experienced a high volume of trading. Stablecoins are important in the cryptocurrency market as they provide a way for traders to move funds between different exchanges or cryptocurrencies without having to convert back to fiat currency. They are also used as a store of value by some cryptocurrency investors who prefer a more stable asset compared to the volatility of Bitcoin or other cryptocurrencies. If stablecoins depeg permanently, it could lead to a loss of confidence in their stability and reliability. This could potentially cause a sell-off of stablecoins and a shift towards other assets perceived as more stable, such as traditional fiat currencies. But before we panic too hard and FUD out, it's important to note that the impact of this crisis on cryptocurrencies such as alts and Bitcoin would depend on the severity and duration of the stablecoin depegging event, as well as other market factors such as investor sentiment and regulatory actions. In the past, there have been instances of stablecoins temporarily depegging from their underlying assets without significant impact on the broader cryptocurrency market. One notable example of a stablecoin depegging in the past is the case of Tether (USDT) in 2018. Tether is a stablecoin that is pegged to the value of the US dollar , with each USDT token representing one US dollar . In October 2018, Tether's price dropped below the $1 peg on several cryptocurrency exchanges, leading to concerns about the stability of the stablecoin. The depegging was attributed to a variety of factors, including regulatory pressures, concerns about Tether's reserves, and a general market downturn. The depegging led to a sell-off of Tether and a shift towards other stablecoins such as USD Coin ( USDC ) and TrueUSD (TUSD), which saw increased demand as traders and investors sought more reliable alternatives. Despite the depegging of Tether, the broader cryptocurrency market did not experience a significant impact, with Bitcoin and other cryptocurrencies largely unaffected. However, the incident highlighted the potential risks and uncertainties associated with stablecoins and their reliance on centralized institutions to maintain their pegs. In terms of price action for the immediate term, the Tether (USDT) depegging event in 2018 did have some impact on the cryptocurrency market prices, although the impact was relatively limited and short-lived. Following the depegging of USDT, there was a brief sell-off of Tether and a shift towards other stablecoins such as USD Coin ( USDC ) and TrueUSD (TUSD). This led to increased demand for these stablecoins, which helped to maintain their pegs to the US dollar . However, the broader cryptocurrency market, including Bitcoin , was largely unaffected by the Tether depegging. While there was some initial volatility and uncertainty, the market quickly stabilized and resumed its upward trend. 💭 Share your thoughts in the comment section and stay tuned! _______________________ 📢Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎Hit like & Follow 👍 We thank you for your support ! CryptoCheck
SShort
by CryptoCheck-
29
SVB, Silvergate Collapse & Affect on CryptomarketHi Traders, Investors and Speculators of the Charts 📈📉 Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year. In a twist of events, an incident that happened within the banking realm created chaos for the crypto realm. I bet you didn't have that on your bingo cards for 2023... In the past few weeks, there have been two significant bank failures in the United States that have sent shockwaves throughout the financial world. The collapse of Silicon Valley Bank and Silvergate Bank has sparked concerns about the stability of the banking system and the future of the crypto industry. The failure of these banks highlights the fragility of the financial system and the challenges faced by institutions that operate in high-risk sectors like tech and crypto. Silicon Valley Bank ( SVB ) was closed by the FDIC on March 9 due to its heavy losses caused by the downturn in technology stocks and the U.S. Federal Reserve's aggressive plan to increase interest rates. The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the US Congress in 1933 to maintain stability and public confidence in the nation's financial system. The FDIC provides deposit insurance that guarantees the safety of deposits in member banks, up to a certain limit. In the event that a member bank fails, the FDIC will step in to insure deposits, provide assistance to depositors, and liquidate the failed bank's assets. The FDIC also regulates and supervises member banks, as well as conducts research and analysis on the banking industry. Silicon Valley Bank bought bonds using customers' deposits, but the value of those investments fell as interest rates rose. This is usually not a problem for banks, but Silicon Valley Bank's customers were largely startups that needed cash. Venture capital funding was drying up, and companies were tapping their existing funds deposited with Silicon Valley Bank, which was at the center of the tech startup universe. In response to this liquidity crisis, SVB sold a $21bn bond portfolio at a loss of $1.8 billion. The bank attempted to fill the solvency hole with a combined equity offering of $2.25bn on March 8, but the attempt failed. This is the largest failure of a financial institution in the United States since Washington Mutual collapsed more than a decade ago. The closure of SVB had an immediate effect on some startups that had ties to the bank, as they scrambled to pay their workers and feared having to pause projects or lay off employees until they could access their funds. SVB , the 16th largest bank in the US, had assets of $209 billion, with more than 50% of its investments tied up in long-term securities, including exposure to the Silicon Valley tech and health startup world. The bank's sudden collapse has raised questions about its risk management practices, and the impact of its closure on its clients, who are largely startups and wealthy tech workers. The bank's large uninsured deposits and exposure to high-risk sectors like tech and crypto contributed to its downfall. But SVB isn't the only one... Silvergate Bank, which has been a significant player in the crypto world, has announced that it is closing and returning deposits. The bank's holding company, Silvergate Capital Corporation, stated that the decision was made "in light of recent industry and regulatory developments." The closure follows the loss of one billion dollars in a quarter after customers withdrew $8.1 billion, and a subsequent filing in March revealing even worse financials. The closure of Silvergate Bank is concerning for the crypto industry, as it may lead to companies turning to less regulated institutions for their banking needs, potentially making the space even riskier. Coinbase, Crypto.com, and Paxos have already started moving away from the bank. The collapse of the bank will likely draw scrutiny from lawmakers who are concerned about the crypto contagion affecting the traditional financial sector. The Silvergate Exchange Network, which allowed crypto exchanges like Coinbase, Gemini, and Kraken to move money between themselves and other institutions, has also been shut down. The bank's financial struggles have been ongoing for some time, with some of its high-profile clients like FTX and Genesis also experiencing challenges. Silvergate's collapse raises concerns about the future of the crypto industry, as companies may turn to less regulated institutions for their banking needs, potentially making the space even riskier for everyone involved. The bank's failure is also likely to draw scrutiny from lawmakers concerned about the potential contagion of the crypto industry on the traditional financial sector. Late Friday night Coinbase, a popular cryptocurrency exchange, announced that it would suspend conversions for the USDC stablecoin. This led to a rush of people trying to sell their USDC holdings, causing it to depeg from its value of $1 and trade as low as $0.87 before recovering to $0.92. Another stablecoin, Dai, also depegged and experienced a high volume of trading. Stablecoins are important in the cryptocurrency market as they provide a way for traders to move funds between different exchanges or cryptocurrencies without having to convert back to fiat currency. They are also used as a store of value by some cryptocurrency investors who prefer a more stable asset compared to the volatility of Bitcoin or other cryptocurrencies. If stablecoins depeg permanently, it could lead to a loss of confidence in their stability and reliability. This could potentially cause a sell-off of stablecoins and a shift towards other assets perceived as more stable, such as traditional fiat currencies. But before we panic too hard and FUD out, it's important to note that the impact of this crisis on cryptocurrencies such as alts and Bitcoin would depend on the severity and duration of the stablecoin depegging event, as well as other market factors such as investor sentiment and regulatory actions. In the past, there have been instances of stablecoins temporarily depegging from their underlying assets without significant impact on the broader cryptocurrency market. One notable example of a stablecoin depegging in the past is the case of Tether (USDT) in 2018. Tether is a stablecoin that is pegged to the value of the US dollar , with each USDT token representing one US dollar . In October 2018, Tether's price dropped below the $1 peg on several cryptocurrency exchanges, leading to concerns about the stability of the stablecoin. The depegging was attributed to a variety of factors, including regulatory pressures, concerns about Tether's reserves, and a general market downturn. The depegging led to a sell-off of Tether and a shift towards other stablecoins such as USD Coin ( USDC ) and TrueUSD (TUSD), which saw increased demand as traders and investors sought more reliable alternatives. Despite the depegging of Tether, the broader cryptocurrency market did not experience a significant impact, with Bitcoin and other cryptocurrencies largely unaffected. However, the incident highlighted the potential risks and uncertainties associated with stablecoins and their reliance on centralized institutions to maintain their pegs. In terms of price action for the immediate term, the Tether (USDT) depegging event in 2018 did have some impact on the cryptocurrency market prices, although the impact was relatively limited and short-lived. Following the depegging of USDT, there was a brief sell-off of Tether and a shift towards other stablecoins such as USD Coin ( USDC ) and TrueUSD (TUSD). This led to increased demand for these stablecoins, which helped to maintain their pegs to the US dollar . However, the broader cryptocurrency market, including Bitcoin , was largely unaffected by the Tether depegging. While there was some initial volatility and uncertainty, the market quickly stabilized and resumed its upward trend. 💭The collapse of Silicon Valley Bank is the second-largest bank default in U.S. history and puts the golden trifecta rule of banking (liquidity, solvency, and profitability) into review. This failure reminds us of the unintended consequences of unorthodox monetary policies, pandemic remediation measures, excessive leverage, and democracy eroding rulings. SVB had significant exposure to long-term securities and the Silicon Valley tech and health startup world. The bank's uninsured deposits pose a problem but insured deposits will be available as soon as Monday. The collapse of Silicon Valley Bank and Silvergate Bank underscores the need for stricter regulatory frameworks and tighter risk management practices in the financial industry. The failures also highlight the importance of diversification and risk mitigation strategies for banks and their clients. As the financial industry continues to evolve, it is essential that institutions keep pace with the changes and adapt their practices to ensure their stability and resilience in the face of future challenges. _______________________ 📢Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎Hit like & Follow 👍 We thank you for your support ! CryptoCheck
SShort
by CryptoCheck-
12
Analyzing Bank Liquidity: Key Charts to WatchThere is a lot of fear and uncertainty about bank runs right now, but fortunately, TradingView's charts give us objective and unbiased insight into the actual state of U.S. bank liquidity. In this video, I explain some key charts that you can use to analyze banking liquidity. You can add these charts to your Watchlist so you're always able to get a pulse on the current state of the U.S. banking system. Important Disclaimer Nothing in this post should be considered financial advice. Trading and investing always involve risks and one should carefully review all such risks before making a trade or investment decision. Do not buy or sell any security based on anything in this post. Please consult with a financial advisor before making any financial decisions. This post is for educational purposes only.
COINBASE:BTCUSD
by SpyMasterTrades
17
Banking on Disaster: Fed Continues to TightenThe Federal Reserve's extreme tightening just caused the second-largest bank collapse in U.S. history (in nominal dollars). In this post, I will explain just how far the contagion is likely to spread, and why this is likely just the start of what may be widespread liquidity crises. In early 2022, in order to mitigate the record inflation it caused, the Fed began hiking interest rates. By mid-2022, the Fed was raising interest rates at the fastest pace on record. The rate of change (or ROC) in Treasury yields began to rise parabolically. Below is a chart that I posted back in August 2022 to show how extreme the rate of change was for the 2-year U.S. Treasury bond yield. Since bond prices move inversely to yields, bond prices began to fall sharply in 2022 as yields were rising. In October 2022, I posted the below ratio chart of TLT and M2SL to illustrate the immense wealth destruction that holding Treasury bonds was having for investors and institutions. I warned that what was occurring is destabilizing. To understand how I used the ratio chart of TLT and M2SL to conclude that, due to the Fed's extreme tightening, destabilizing wealth destruction was occurring for bondholders, you can see my post below. By late 2022, it became a mathematical certainty that liquidity crises would occur. Many market participants who were holding extremely low-yielding bonds were experiencing extreme losses because of the Fed's extreme rate hikes. Such losses are unrealized unless the bondholders are forced to liquidate while yields are much higher than when the bonds were purchased. For those who recall what happened in October 2022, pension funds in the UK were forced to liquidate their highly leveraged bond positions at a loss due to margin calls. This caused the Bank of England to quickly pivot in order to avert a major liquidity crisis for pension funds. Silicon Valley Bank ( SIVB ) however was not as lucky as UK pension funds. SIVB was at the forefront of the central bank-engineered liquidity crisis because of its unique clientele: debt-dependent start-ups. As liquidity was being destroyed by the Fed at a record pace in 2022, start-ups, which are heavily reliant on debt and cheap money to continue operations and generate growth, began to draw down their deposits as cash evaporated and borrowing became more expensive. This in turn forced SIVB to liquidate its bond holdings at a major loss, similar to the UK pension funds in October 2022. Once Silicon Valley Bank reported this major loss to the public, the market suddenly began to fear its viability. Within days, the bank collapsed. The collapse of SIVB occurred with an estimated 85% to 96% of all deposit amounts not being FDIC-insured. This means that most of the $175 billion in deposits at the time of the collapse may be partially or totally unrecoverable. Two things about the bank's collapse are remarkable: First, the unprecedented speed by which the bank collapsed and was seized by the FDIC, and, second, the overwhelming majority of the money deposited in the bank was not FDIC-insured. This is quite concerning because such a lack of FDIC insurance on deposits undermines the public's faith in the FDIC to maintain banking stability. Such a lack of insurance also causes actual liquidity contagion. Circle, the company that manages the USDC stablecoin, has confirmed that $3.3 billion of its U.S. dollar reserves were in the now-collapsed bank. At the time of writing, Circle does not know if or when the FDIC will come to the rescue. It's possible that neither the FDIC nor the U.S. Treasury comes to Circle's rescue, as neither entities are eager to support the cryptocurrency industry, which undermines U.S. dollar hegemony. The FDIC, therefore, faces a major conundrum: Maintain the public's faith in FDIC-guaranteed banking and ensure there is no liquidity contagion, at the expense of acting as a protector of stablecoins and cryptocurrency, and more generally, increasing moral hazard. Nonetheless, this fear that the FDIC may not come to the rescue has caused USDC to de-peg from the US dollar. Each USDC is now worth less than one US dollar, as shown in the chart below. Upon seeing USDC rapidly de-pegging, the cryptocurrency exchange platform, Coinbase, decided to temporarily freeze USDC conversion into U.S. dollars, forcing a reprieve in USDC's de-pegging. Nonetheless, at the time of writing, USDC is still teetering on the brink of collapse, having lost nearly 90% of the Tether ( USDT ) in its 3pool currency reserves. USDC instability is now spilling over into other cryptocurrency spaces that rely on USDC maintaining a stable value. One such space is the AAVE protocol. AAVE is an Open Source Liquidity Protocol that operates on the premise that only "low-risk tokens" such as USDC be used as collateral and as a lending pool reserve. Now that USDC has de-pegged from the U.S. dollar, any collateral that was pledged in USDC is now suddenly worth less. This is destabilizing the liquidity and reserve structure of the AAVE protocol. AAVE currently has $6 billion of locked liquidity across its networks. Although it is possible that the FDIC can fully resolve the crisis caused by the Silicon Valley Bank collapse, it is likely that volatility may persist, especially when Coinbase resumes USDC swaps. In a worst-case scenario, USDC may follow the same trajectory as TerraUSD (UST) in May 2022. In this scenario, the shockwaves will be felt not only across the cryptocurrency space but also in the Treasury market. If too many stablecoin holders suddenly demand dollars, it could force a liquidation of Treasurys on reserve. Circle currently has over $32 billion worth of Treasurys in its reserves. Although this may not be significant enough to destabilize the multi-trillion dollar Treasury market, it can cause positive feedback and can increase fear in the market. This series of events was predictable and expected. The root cause is the central bank's monetary policy. The Fed is destroying the money supply at the fastest rate on record. Since the Fed is still tightening, which has a long and variable lag effect, the liquidity crises we're seeing now are likely the tip of the iceberg. The fact the Fed is still tightening so deep into the start of a financial crisis is unprecedented. When Lehman collapsed in September 2008, for example, the Fed had already pivoted over a year earlier (in August 2007). Now, it seems that a financial crisis is already underway but the Fed remains unable to pivot due to record-high inflation. Eurodollar futures are still demanding that the Fed hike rates. The Fed is therefore trapped. It must choose between runaway inflation or widespread liquidity crises. The yield curve is deeply inverted. This is a reliable indication that a recession is coming. The fact that it has been inverted for a while, and is deeply inverted, may be foreshadowing the extent and duration of the coming recession. In my post below, I explained why I believe that the most likely outcome is severe stagflation. The Fed is in a Catch-22, and there's no way to avert some kind of a crisis. Indeed, the coming years will likely reveal to us what the consequences are for decades of limitless monetary easing. Important Disclaimer Nothing in this post should be considered financial advice. Trading and investing always involve risks and one should carefully review all such risks before making a trade or investment decision. Do not buy or sell any security based on anything in this post. Please consult with a financial advisor before making any financial decisions. This post is for educational purposes only.
by SpyMasterTrades
19