/biz/ - Business & Finance

>>54062442
hyperinflation

>>54062442
>He doesn't have a depression proof portfolio
>He thought it was normal richies were buying up farms and gold
>He thought CBDC's were a real thing, and the elites weren't just prepping to stay rich during the next Great Depression.

>>54062442
>Is there an economic crisis facing America tomorrow?
No.
A bank that catered specifically to Venture Capitalists by holding their money in Long term bonds got fucked by high interest rates, the VC's panicked when the equity investment dried up (because high interest rates) and stampeded for their billions back, forcing the bank to sell the bonds into a shitty bond market (because of high interest rates).

Both were living in the past of 0% interest, and got fucked by a stupid paniic. It means nothing to you unless all your monies are in crypto like a retard.

>>54062452
I dont see how its the same as inflation if its just recuperating money supply that was deposited
>>54062499
>CBDC
I dont know what this is

>>54062442
>Why can't we just BRRRRRRRR the money back
>its not devaluin the dollar

Take an introductory economics course and then return

>>54062442
>Is there an economic crisis facing America tomorrow?
No.
>Why cant we just BRRRRRRRR the money back
Preserving US dollar reserve currency status is more important than saving startups.
>its not devaluin the dollar if its money that SHOULD have been there
QE devalues money more rapidly than QT.

>>54062499
A bunch of stupid, redundant VCs all trying to invent Space Taxis on the Blockchain all got soaked because they panicked and their bank was a monoculture with a singular investment strategy.
It's a nothingburger to the larger economy, Doomie.

>>54062516
Because that money supply hasn't been burnt lol, those deposited assets still exist, so you'd double that money supply

>>54062527
I did, I took macro and econ in college(years ago)

>deposit money
>bank makes bad loans or ????????
>your money is gone and we cant replace it because...look we just cant, ok?

>>54062510
>No.
Yes
>the VC's panicked when the equity investment dried up
Moody's was going to give SVB them a multi-notch drop and SVB arranged for sales before the VCs knew anything. Then moody's did give them a single-notch drop.
VC clients didn't panic until the stock price crashed.
>forcing the bank to sell the bonds into a shitty bond market
They were already going to sell and realize those losses because of the Moody's maneuver.
>Both were living in the past of 0% interest, and got fucked by a stupid paniic.
intelligent panic with appropriate risk management from investors and the bank's clients.
>It means nothing to you unless all your monies are in crypto like a retard.
the entire stock market will be wrecked tomorrow unless the federal government gives assurances. everyone in finance knows this.

>>54062516
>I don't know what a CBDC is.
Good, it was an entirely retarded idea. The FED doesn't lie because they are held liable at the felony level personally. They will mislead though.
Powell straightly said, they looked into the CBDC, but that it's just a gimmick to them.

>>54062548
>those deposited assets still exist
then why is a bank closure causing a shitstorm?

>>54062554
Bank loss is someone's profit. This money didn't go to nowhere.

>>54062540
Let's not forget that reserve requirements are still at 0%, and all banks are currently holding illiquid trash that they won't be able to cash in in case of a minor bank run (which is entirely possible for many banks in this situation).

It'll echo the liquidity crisis in the UK when pensions nearly got fucked because nobody would buy their trash bonds and treasuries, so govt. inevitably had to step in, print, and buy them out.

To ignore all of this is to ignore all the past mistakes that the FED has made to get us here.

I wish to announce here that janet yellen has announced she's going to make an announcement about it soon.

>>54062575
that value no longer belongs to the bank. so the clients can't get it.

>>54062442
>Is there an economic crisis facing America tomorrow? Why cant we just BRRRRRRRR the money back, since it was valid money being deposited into SVB?
Anon, SVB was a minor bank that traded in shitcoins and low-yield bonds, then snapped due to a very immediate liquidity issue since they kept virtually nothing onhand.
No, we're not seeing an economic crisis over this. Yes, they could've been bailed out, but they're a meme, so no.

>>54062622
so the assets arent there then

>>54062442
>its not devaluin the dollar if its money that SHOULD have been there
Somebody else has that money now. Money can't be in two places at once, so it SHOULD NOT be there.

>>54062575
Cause of money supply disruptions and fud about another banks. We are not sure how much it takes to remove deposits back to holders, especially if bank has negative equity.

>>54062597
so where does John Q taxpayer go to get his SVB savings?

>>54062597
Its good for whoever is buying all those long term bonds for 60 cents on the dollar and just sits on them til maturity.

>>54062603
Ironically SVB is just too small to fall under Federal liquidity regulation. If it had been larger it would have been required to have higher liquidity.

>>54062442
> valid money
SVB created credit. They did so on the proviso that the borrower kept that credit in SVB.
Then SVB goes bust.
Why should we make this self-referential tards whole?

>>54062641
THIS lol, discussion over, printing would just double the supply, idk how that's so hard to understand

>>54062628
thats some crazy spin posting this must be serious

ycombinatorman said startups kids dont get paychecks pretty soon here

which story is true?

>>54062681
>we cant double the supply, the money's still there
>ok, well can I check my account?
>no, its empty

>>54062632
the investment vehicles are still there but they declined in value. so the money isn't there.

>>54062654
To university to study that storing a lot of uninsured assets in a single bank is a bad diversification.

>>54062678
You know JPM has 3bn in liabilities but only 27m in liquid cash?

The liquidity regulation takes into account shit like short-term and long-term treasuries and bonds as "cash-equivalent". The issue comes when NOBODY wants to buy these, and the government has no choice but to step in and provide liquidity.

BRRRRRRRR.

All banks are insolvent, you just don't know it yet.

>>54062727
>he investment vehicles are still there, but the [same investment vehicle] isnt there

>>54062682
Silvergate and SVB are both signs that the easy money for bullshit ideas is drawing to a close.

>>54062735
Wrong pic ffs, let me replace that with this

>>54062540
>Doomie
I'm not a Doomie
SVB is a nothingburger. With the STATE of the market though. Where nobody had liquidity at near zero interest rates. You should absolutely have depression proof assets. Something is fucked somewhere, SVB was autism though.
It's annoying having to state the obvious. The Unknowns are greater than the knowns right now. We should be acting accordingly and not giving into the psychological shadow fallacies generated in our headcannon.

>>54062735
>You know JPM has 3bn in liabilities but only 27m in liquid cash?
JPMorgan Chase cash on hand for 2022 was $1336.625B, a 6.93% decline from 2021.

https://www.macrotrends.net/stocks/charts/JPM/jpmorgan-chase/cash-on-hand

>>54062758
We aren't going back.
We crashed banks in 08
We crashed banks in 01
We crash banks all the time, they aren't a sacred cow.

>>54062735
Here's JPM's balance sheet broken down. Many big banks are like this, you will likely start to see many crumble over the next few days, and you can thank the FED for their "inflation is transitory" meme. It's transitory until there's no buyers for their ponzi "safe haven" assets.

>>54062575
Because someone took the money and now a bunch of code monkeys won't get paid.

>>54062789
>Banks bought assets at the peak
>Are holding inflation prices higher because they can't absorb losses
>Jpow says he is bring inflation(not the rate) down
Please pay attention.
The fire sales are starting soon.

>>54062789
>you will likely start to see many crumble over the next few days
2 more weeks amiright?

>>54062442
They didn't actually have the "money" they said was there and the "money" you're talking about isn't even real. They're over leveraged to the tits. It's all fake and gay.

>>54062442
>Is there an economic crisis facing America tomorrow?

tomorrow? the first domino fell 3 years ago. we've been in an economic crisis for awhile now.

>>54062510
>by holding their money in Long term bonds got fucked by high interest rates
Same problem as any other bank with fixed rate securities

>>54062442
if we brrr ht emoney back then we get legit weimar hyperinflation, and then the world wont buy us debt anymore
we are fucked good luck all hope u have some shiny rocks and such

what the fuck is up with thes captchas im getting. they are fucked

>>54062789
I don't throw this around lightly but you're retarded. The balance sheet is showing in thousands, so multiply each of those numbers by 1,000.

>>54062510
>this is fine

>>54063116
>if we brrrr the money back so the money our own people legally deposited restores the true balance of the bank's holdings, we trigger hyperinflation

>>54063104
>Same problem as any other bank with fixed rate securities
Yes but regular banks aren't ALL IN on fixed rate securities like SVB. They have a diverse customer base and diverse investments and sources of income.

>>54062442
>Is there an economic crisis facing America tomorrow?
Honestly no. The white house/fdic/fed will say something definitive by market open tomorrow about all depositors being made whole. Panic will be subdued, there will be some runs but it won't matter because SIVB was uniquely shit with the extent of its underwater mbs/t-bills and its cash-hungry depositors. No other bank is even remotely close to them in terms of fucked up balance sheets.

The longer term impact will be people seeing the government deploy funds to stop a banking crisis, which they will rightly interpret as both QE and a promise from the fed to tread lightly in its future rate decisions because something finally broke. This is net bullish for risk assets and probably accelerates the next crypto bull (and AI bubble of course)

>REPORTER: Secretary Yellen, thank you for coming in
>SECRETARY YELLEN: Its a great pleasure, thank you
>This bank that had issues this week
>The one where they ran out of funds?
>Yes
>That was very untypical I can tell you that much!
>How was it untypical?
>There's a lot fo these banks operating all around the world and very seldom does something like this happen. I just don't want people thinking that banks don't have money
>Did this bank have money?
>I was thinking more about the other ones
>The ones that have money?
>Yes the ones that don't spend all their clients money
>If this one didn't have any money why did it claim have 200 billion dollars in assets?
>Well, I'm not saying it didn't have money just that it didn't have as much as other ones
>Why?
>Some of them are run so they don't spend any of their clients money
>Wasn't this run so they didn't spend their clients money?
>Obviously not!
>How do you know?
>Because they used client's money and when people wanted it back the bank imploded! That's kind of a give away. I'd just like to make it clear that THAT is not normal
>What sort of standards are these banks operating by?
>Oh, very rigorous financial standards
>What sort are those?
>They're not supposed to spend all their clients money for starters
>What other things?
>There's regulations what kind of assets they're allowed to hold
>Such as?
>Sanctioned currencies are out. No sanctioned currency derivitives
>Like Russian treasuries?
>No Russian treasuries! No North Korean yuan, no North Korean tobacco
>No bitcoin?
>Bitcoin's out. And they gotta have an office. There's a minimum staff
>What's the minimum staff?
>Oh, one I suppose
>So the allegations that this was run to just make as much profit as possible, that's ludicrious
>Oh absolutely ludicrious, these are very strong institutions
>So what happened in this case?
>They ran out of money in this case but its very unusual

>>54062442
Yes, we are long overdue for economic hardship. 1970s stagflation is my guess. 10 years of accumulation at least on the bright side of things

>>54063201
The only way all depositors are made whole is if the US bails out or bank stops them because >85% of accounts are about the $250,000 mark and thus uninsured.

There is also one domino even more shit than SIVB that the SEC had to ask them to delay their balance sheet. Even if nothing happens with the bank runs, that's the real thing to worry about.

>>54063119
>The balance sheet is showing in thousands, so multiply each of those numbers by 1,000.
post link or fuck off

This is literally the FED's goal. It hasn't even been a week since Jerome went in front of Congress and said with a straight face that unemployment needs to rise by 2m-4m people.

>>54063122
Lol, checked and this. The paranoid bag holder cope has been slowly increasing over the weekend haha

>>54062698
The "money" still exists in the economy as a whole. How dumb are you?

>>54063391
>The "money" still exists in the economy as a whole
where?

>>54063370
He's correct, you are retard.

>>54062442
>Why cant we just BRRRRRRRR the money back, since it was valid money being deposited into SVB?

becasue SVB spent the money on things that are no longer worth very much. the money is gone and they now own those things instead.

>>54062442
well that depends on what you mean by "crisis"

>>54062737
Jesus fucking christ, you deposit $100 at your bank, the bank buys a fucking stock for $100 thinking it’ll go up in price but instead it drops to $10. You go get your money out but the bank only has $10. This is as simple as it can be put for your retarded brain to comprehend

>>54062442
Yes there is. I just withdrew my cash from the ATM.

>>54063488
its as simple as that.

people think their money is somehow 'in' the bank.

the bank spent it and now owes you money is how it is.

>>54063488
so the money vehicle isnt there anymore, like I said

>>54062737
....do you think banks hold your assets 1:1 in cash?

>>54063524
what does the FDIC do then?

>>54063431
SVBs main issue was that they bought treasury bonds before rates were hiked so technically the government got the money and spent it on salaries and other stuff.

>>54063519
In SVB's case it was long dated Bonds. If you hold those bonds to maturity, all is fine and well.
If you are obligated to sell them to a secondary on the bond market before maturity, and the bond market is shit because of high interest rates, then you don't get the mature value of the bond, you get whatever the current market offer is on them.
The buyer, who can wait them out, profits because he's buying $100 bonds for $60.

>>54063541
You're clearly out of your depth here.

>>54063370
Here you go pussy

https://finance.yahoo.com/quote/JPM/balance-sheet/

Also apologies for forgetting that it's 1000x, will accept retardation on that part. The point still stands though, banks very illiquid.

>>54063586
answer the question

>>54063572

>>54063541
>what does the FDIC do then?

buys insurance so that it can pay depositors in the event of a bank failure

>>54063572
>In SVB's case it was long dated Bonds. If you hold those bonds to maturity, all is fine and well.

actually it isnt because they have devalued

>>54063541
Insurance.
Does your auto insurance give you a lump sum of cash to cover your car 1:1 until you need it? No. They disperse it when you need it, not before.

>>54063663
They mature to their value, they become LESS valuable on the bond market because with high interest there are simply more profitable places to park money (like Treasuries).
So no one desires an instrument where your money is parked for 10 years making a (relatively) shit return wen they could just buy 1 month Treasuries.
Thus when you are forced to sell then enmasse, there is no enthusiasm for buying billions in them from you, unless there is a discount that will ensure you make a reasonable profit from taking them off your hands.

In short, selling off long term bonds early reeks of desperation.

>>54062442
>its not devaluin the dollar if its money that SHOULD have been there
Make more money = money devalued.

>>54062789
Those values are in thousands. JPMorgan doesn't have a "mere" 3.6B in assets.
So this is saying they have hundreds of billions in cash.

>>54063519
the bank gave 100$ to the seller of the stock, who is presumably another non-fed non-government actor in the economy
money doesn't just "vanish" unless the government pays off debt or the federal reserve sells assets

so yes bank bailouts are inflationary and increase the money supply

>>54063805
In point of fact they have over 1 trillion in highly liquid assets all told.

>>54063756
>In short, selling off long term bonds early reeks of desperation.

Correct. The only question now is how many other banks are about to do the same thing.

>>54062516
You are too retarded to be managing your own money. Dump it in a trust or an ETF

>>54062597
Except that it literally came from nowhere due to fractional reserve lending, so then what?

>>54063829
"Other banks" don't have their assets concentrated into long term bonds, and have many different sources of income, and a variety of customers.

>>54062442
>Why cant we just BRRRRRRRR the money back,
You can but Powell is TRYING to cut back inflation and needs a recession to do that.
Everything he has done to date has failed and the only actual recession he has any experience of was caused by a banking crisis, so guess what he's going to do now.