Bank Runs! What's Going On? - Patrick Boyle

[TheDawn]

Well, I've never been a big fan of Bernanke or his successors either. However, I don't think there will be any spillover effect from the demise of Silicon Bank like what we saw in 2008 after Lehman collapse, which sent a shockwave all over the globe. Sure, some depositors and investors will lose their shirt from this debacle, unfortunately. But for the most part, it will be seen as just another mismanaged company that followed in the footstep of those that already went belly up. Speaking of which, do the market even care about FTX anymore?

BTW FDIC obviously didn't think Silicon Bank was "too big to fail" and I'm not sure how I would feel about that if I were their customer.

I agree. SVB is a very specialized bank that does its business exclusively in the high tech. industry so it does not really represent the banking industry as a whole which is very well-diversified across all sectors of the economy. Plus its inter-business dealings with the rest of the banks in the industry are also quite limited. Even though it's an FDIC-insured bank, it's pretty much a bank that just did its own thing in its own domain, quite isolated from the rest of the banking industry unlike Bears & Stearns and Lehman Brothers which were an integral part of Wall Street.

That's why I feel its failure would have a much more limited possibility of spilling over to the rest of the banking industry.

 

[johnarb]

These people don't like online banking

https://www.dailymail.co.uk/news/ar...e-Republic-Bank-money-SVB-bank-collapsed.html

 

[Businessman]

These people don't like online banking

Or they have accounts at just that one bank, so no where else to transfer the money too.

Although they got nothing to worry about they will be below the FDIC limits.

 

[newwurldmn]

Dude. People with over 250k in SVB will lose some of their demand deposits. This happend like yesterday.
No one is being irrational and this has nothing to do with politics.

In the U.S., real bank runs, where individual are fearful of losing all or some of their demand deposits and actually could, are a thing of the past. Individuals can be irrational. They can even think that somehow Joe Biden stole millions of votes from Donald Trump. But believing in nonsense does not make it true.

 

[Pekelo]

Next is Signature Bank

 

[vanzandt]

It's not that hard to figure out which banks might be in trouble if there's a run on them. I explained this in another thread:

If people had looked at the balance sheet in their last report they'd have seen this line:

“held to maturity.”

That would be their bonds at purchase price.
BUT.... even though they are not required to deduct the losses at the current value, as they would another loss, they are required to line item the current liquidation price, as applied to their balance sheet. Anyone could have spotted this on SVIB's latest report. They were not doing real well ratio wise.
Any analyst, or any bank geek at the likes of Citadel that knows these things, would have spotted this.

So whoever you referred to that stated price action foretold this.... they are probably right.... BUT.... there is a reason behind that price action... somewhere out there was a few smart cookies that caught it and started selling.

There's another post here about bottom fishing the sector.
That is an excellent idea.... but one must know what they are doing first, odds are... as ET members, they don't.

Smart money would suggest before buying any bank stock right now, pulling up the latest report, obviously of a regional, and then line item “available for sale” or “held to maturity” (again, these bonds that are underwater) as a ratio to their total depositor liabilities. The one with the lowest number wins.

I already did this. There's a few. Personally, I like 5th Third.

Since they're worth a 1000 words, I'll add a little picture here so you all can go bottom fishing for a good bank armed with this simple insight.

 

[MoreLeverage]

Next is Signature Bank

Or FRC

 

[schizo]

Didn't you hear Yellen saying she is monitoring a few other banks.

Translated that means: Shit about to get real

By this time next week, the market won't even remember what happened. It's just business as usual.

 

[The_Krakenite]

By this time next week,

Exact same phrase I heard all over reddit when the initial covid-drop started.

Then idiots went full retard on stupid shit like non-profitable theaters thinking they'd retire rich by buying shares 20% on discount.

 

[Businessman]

By this time next week, the market won't even remember what happened. It's just business as usual.

It is a bear market. Business as usual in a bear market means lower lows until the final bottom is in. And the one we got in October wasn't it.