Comments by "nuqwestr" (@nuqwestr) on "How are the Credit Suisse crisis and Silicon Valley Bank collapse connected? | DW News" video.

  1. In the case of SVB, the money is held in 10-year T-Bills and Mortgage Back Securities, the safest kind of investment, only they are not liquid without penalty until mature. This is all very technical, but the BK will allow the FDIC to sell the assets at par, not current face value, a bookkeeping trick that works, and perhaps why SVB bailed instead of trying to hold on. ..
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  2. recession baked in before bank runs.
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  3.  @vikrammgokhale  nonsense, those t-bills are good, just not liquid enough for a cash run on the bank. US Treasury 2-year bond has great yield and very safe bet when inflation stays high. SVB's mistake was believing inflation was transitory, 10-year will pay off when FDIC sells SVB assets.
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  4. In the case of SVB, the money is held in 10-year T-Bills and Mortgage Back Securities, the safest kind, only they are not liquid without penalty until mature. This is all very technical, but the BK will allow the FDIC to sell the assets at par, not current face value, a bookkeeping trick that works, and perhaps why SVB bailed instead of trying to hold on.
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  5. nonsense, why would you say that?
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  6. SVB was not that kind of depository or investment bank, they focused on lending short-term to startups with VC cash deposits and influx of more cash when startup went into an IPO. This strategy inverted when IPOs slowed and inflation turned out not to be transitory, the SVB business model, based on 4 engines, all flamed out same time and they crashed. They held assets which the FDIC will find buyers for, so looks good for all.
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  7. no, SVB made a bet that inflation was transitory, the T-Bills and MBS are good, just not liquid, and the balance sheet will prove positive at par and be sold by the FDIC at a profit. SVB could have gotten a loan based on its assets but panicked and ran. Short-term T-Bills are doing very well right now and lots of money coming in to US from other countries.
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  8.  @r.r.r.918  no one talks about the inverted curve almost all of us saw on hedged on, the question is why CEO Becker didn't, and why did he bail out so quick when he could have gotten loans against assets.
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  9. depends on the kind of deposit, if you invest in a CD or mortgage pool, not liquid right away unless you pay a penalty. Same with T-Bill if cashed before maturity.
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  10. SVB was not that kind of bank, it catered to startups and VCs almost exclusively and depended on large cash deposits from IPOs. They hit a perfect storm that flamed out the 4 engines of their business model and crashed. Assets are good and will be sold off at par by FDIC.
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  11.  @AlmightyXI  no, held they are safe, SVB had bet not only on transitory inflation, but IPO activity would produce enough cash to sustain a run, CEO Becker's 4 prong business model all failed at same time and crashed. You can read about it in the January 2022 issue of BankDirector Magazine. The FDIC will manage a technical sale where the assets will not be current face value but at par. All good. 1-year t-bill a very good buy right now as a hedge against inflation, just not the `10-year.
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  12.  @cinpeace353  Fed and FDIC weight 10-year treasury bond as "zero" risk when it comes to balance sheet. That's law.
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  13. SVB not that kind of bank, really, the catered to a very narrow, focused clientele of startups and VCs.
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  14.  @cinpeace353  huh?
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  15. SVB bet on transitory inflation and cash flow from IPO activity, both failed, and without cash deposits from VC and IPOs their business model failed. Assets good, FDIC will find to easy to sell.
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