Bank collapse?

[Ausmumof3]

Anyone want to put what’s happening in the bank/financial world into perspective? ABC here is reporting it as the second largest bank failure ever but I’m not sure if that’s taking into account the value of the dollar etc?

[gardenmom5]

25 minutes ago, Ausmumof3 said:

Anyone want to put what’s happening in the bank/financial world into perspective? ABC here is reporting it as the second largest bank failure ever but I’m not sure if that’s taking into account the value of the dollar etc?

not taking into account the value of the dollar.  (Also not taking into account the size of that bank vs other banks.)  sadly, Sanctuary Bank? is now failing.

AND . . . SVB's "head of risk assessment" . . . (who is supposed to make sure the bank does NOT do stupid stuff that will crash the bank . . . . )  was spending her time pushing a woke agenda with the bank's money INSTEAD of making sure the bank didn't do stupid stuff that would crash the bank. 

AND - the bank officers paid each other nice bonuses just before the crash became public.  they all belong in jail - not just their head of risk assessment.

 

adding - dh started in banking.  He had 50 yard line seats for the Penn Square fiasco. (the bank at which he then worked had to sell out to a bigger bank so they'd survive).  quick and dirty: oilmen make money digging wells.   banks will only loan money if they think there will be oil at the bottom of the hole. . . . so, a group of oilmen bought a single outlet strip mall bank - and promptly started loaning themselves money and selling the loans to other banks. (who assumed the loans were legit.)

Edited March 13, 2023 by gardenmom5

[Pawz4me]

There seems to be much blame game being played. Everybody's got their pet reason(s)--the bank's investments, the previous administration weakening banking regulations, the Fed raising interest rates too quickly, panicked depositors and more. My guess is there are multiple reasons for the failure. But that's just from reading a lot of articles and quick convos with a couple people who are very familiar with finance in the US tech sector. I wouldn't be surprised that it's the second largest bank failure ever. Start ups tend to have lots and lots of money.

Edited March 13, 2023 by Pawz4me

[TravelingChris]

Hh Yep, corruption.   THE cEO wasone I f thr SF Fed board members.  The CFO, chief legal, etc all the top people had prior experiences w collapse and mismanagement. Like one was high up i n Lehman Brothers another one was selling junk mortages as r investments in 2007. 

Now this bank was n9t a typical bank .  89% of th e acvounts h2003ad more money than was insured by our government.  Plus as Gardenmom said, having any agenda other than making sure you don't lose the money of both investors and the people who put their moey in checking, savings accounts, CDs,etc.

Why Jim Cramer keeps making awful buy recommendations. Last yearhe recomended the crypto disastsr FNC

a few months before itx collapse in early Nov. Then in Feb 2023 he recommended investing in this bsnk.  I don’t know if he is just dumb or in cahoots w the crooks/idiots.

 

[duckabell]

I've been following this all weekend. I feel that this is a pretty good article that sums it up what led to the collapse. 

A few key takeaways. I did my best to summarize this, but I may be missing some things.

1. SVB is a unique bank in that it services mainly the tech and startup community. This leaves it vulnerable in a few ways. In 2020 and 2021 there was a lot of cash flowing into startups from VC companies. Banks have to make money and most traditional banks balance out the deposits they receive and loan them back out to other bank members. With all the money flooding into startups, startsup weren't taking out as many loans and so SBV had to find another way to generate profit. They did this by buying long-term treasury loans (many 10-year loans) that they would get interest off of. These are often seen as pretty secure.
2. In 2022, interest rates kept rising. This made VC companies fund fewer companies and so the startup money started drying up. This also meant less deposits coming into the bank and more people pulling their money out to fund their companies. Even with less money coming into startups, VCs felt that they weren't as conservative with their spending and were burning too much cash.
3. With the rapid rise of interest rates, the value of SVC's treasury bonds fell. At the end of 2022, there was an article that questioned how stable SVB was, but many people ignored it.
4. Earlier last week, SVB sold some of their bonds to balance their sheets, but they lost money doing so. This spooked the venture capital community.
5. The VC/startup community is pretty tight knit and known for a herd mentality. Led by Peter Thiel, VCs started talking to each other and felt that they needed to protect their companies and the best way to do that was to call all of the companies and tell them to pull out of SVC right away. So everyone started to pull out and did a run on the bank. The bank couldn't fulfill the quick demand of all the money being pulled out and on Friday it was shut down. Due to the quickness of the bank run, about 1/4 of the bank's assets were pulled out within a day - making it one of the largest bank failings.
6. A large majority of money at SVB was above the FDIC limit of $250K per account. SVB required that companies that had loans with them keep all of their money in the bank. In addition, companies are different than households and need more than $250K to run their business, including payroll. If their payroll is $2.5 million, it's not efficient to spread that across 10 accounts to stay under the FDIC limit. When the funds froze on Friday, companies were worried about making payroll and paying their vendors. There was no messaging about how long the funds above $250K would be frozen - days, weeks months? The industry was worried about people not getting paid and companies shutting down fairly quickly.
7. VCs started pressuring the FDIC to step in and at least make the depositors whole. They were very vocal and were concerned there could be contagion and people and businesses that bank with regional banks could be spooked and pull out of regional banks and put their money in the big 4 banks. This could lead to the collapse of regional banks.
8. Last night, it was announced that anyone who had deposits at SVC would have access to all of their money. The FDIC would step in and guarantee the deposits by assessing all the banks a type of fee to help cover the costs. The feds would also offer loans to banks whose bonds have tumbled in value if needed. The hope is that eventually there will be a buyer for SVC, but that takes time and speed was of the essence to help depositors and businesses feel their money is safe. They will not be bailing out SVC - that company is gone and the shareholders and managers lost all of their value in it.
   
   I have my own thoughts to add, but have to jump off to a meeting.
   
    

Edited March 13, 2023 by duckabell

[Starr]

4 hours ago, gardenmom5 said:

was spending her time pushing a woke agenda with the bank's money

What does this mean?  

[Bambam]

11 minutes ago, duckabell said:

I've been following this all weekend. I feel that this is a pretty good article that sums it up what led to the collapse. 


 

I got a virus alert when I clicked on this link. 

[duckabell]

1 minute ago, Bambam said:

I got a virus alert when I clicked on this link. 

Yikes. I updated the link. Does that one work better? If not, I'll remove.

[BeachGal]

Need to watch these three as well:

• First Republic
• Western Alliance
• PacWest

Today will be an interesting day.

[Arcadia]

FYI  https://home.treasury.gov/news/press-releases/jy1337 (March 12)

“After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13.  No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole.  As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.

Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors. “

[Arcadia]

https://www.cnn.com/2023/03/13/investing/svb-uk-business-deal-intl-hnk/index.html
“

HSBC has scooped up the UK arm of failed Silicon Valley Bank, securing the deposits of thousands of British tech firms that hold money at the lender. 

Had a buyer not been found, SVB UK would have been placed into insolvency by the Bank of England following the stunning collapse of its parent in the United States. Insolvency would have left customers with only deposits worth up to £85,000 ($100,000) — or £170,000 ($200,000) for joint accounts — guaranteed.

In a statement, the central bank said it “can confirm that all depositors’ money with SVB UK is safe and secure as a result of this transaction.” 

HSBC, Europe’s biggest bank, announced the £1 ($1.2) deal early Monday morning, saying it would be effective “immediately.”

The acquisition should “end the nightmare thousands of tech firms had been experiencing over the past few days,” Susannah Streeter, head of money and markets at investing platform Hargreaves Lansdown, said in a statement. 

SVB UK is a major bank partner for Britain’s tech sector, and the failure of its parent sent tech executives scrambling to work out how to get their cash out to pay staff and cover operating expenses.”

[Idalou]

5 hours ago, gardenmom5 said:

 

AND . . . SVB's "head of risk assessment" . . . (who is supposed to make sure the bank does NOT do stupid stuff that will crash the bank . . . . )  was spending her time pushing a woke agenda with the 

OH NO! The woke agenda! Woke woke woke! 

Just once I'd like to see someone tell us exactly what woke means, in detail. I'm guessing it's similar to the gay agenda and the drag queen agenda.

Because we're not supposed yo talk politics, correct? Guess your stupid code words don't count.

[fraidycat]

9 minutes ago, Idalou said:

OH NO! The woke agenda! Woke woke woke! 

Just once I'd like to see someone tell us exactly what woke means, in detail. I'm guessing it's similar to the gay agenda and the drag queen agenda.

Because we're not supposed yo talk politics, correct? Guess your stupid code words don't count.

From what I have been able to discern, a "woke agenda" means being inclusive and accepting and standing up for human rights. I tend to view is a compliment on the personal values and ethics of the person being described most of the time.

As for the people who use the term "woke agenda", well using that term tells us a lot about them, too. And I don't see that as a compliment at all.

Edited March 13, 2023 by fraidycat

[Arcadia]

https://www.washingtonpost.com/technology/2023/03/13/silicon-valley-bank-startup-relief/
“Start-up founders said they were able to finally relax after the U.S. government assured them they’d be able to access all their funds in Silicon Valley Bank

…

Founders reported early Monday they were able to access their Silicon Valley Bank accounts online and initiate wires to other banks. Two founders said their wires hadn’t been processed yet, but added that it usually takes a few hours.

About 10 customers were lined up to get into the Menlo Park location of the bank on Sand Hill Road which is known for housing venture capital firms. A representative from the FDIC was giving customers instructions as people in line filled out forms on clipboards.

…

Mauskopf had been putting all business expenses on her personal credit cards since Friday, the only solution she could quickly find because the only business credit cards she had were held with Silicon Valley Bank. That was by design — Winnie recently secured a line of venture debt from the bank, she said, and one of the conditions was that the start-up use Silicon Valley Bank as its sole financial institution.

“It turns out that banks aren’t as safe as I thought,” she said Sunday night.

Mauskopf was able to get another business credit card by early Monday, a relief since she had been carefully monitoring her personal balances all weekend. Winnie is now opening five different banking accounts in an attempt to avoid ever having the same experience, she said.

“I’m also just really happy that we can go into work tomorrow and focus on our mission of helping families access child care and not cash flow management,” she said.”

[KSera]

It looks like all the “pushing a woke agenda” stuff is a big talking point in certain circles because the Chief Risk Officer in UK is a lesbian woman who organized Pride Month activities and participated in LGBTQ and diversity causes. She well may be responsible for some of the failure due to the poor risk assessments made, but I don’t see how this is related to her support of diversity. Maybe the next time a company fails and we find out the CEO was a Little League coach, we should blame his involvement in baseball activities. 

[Faith-manor]

12 minutes ago, KSera said:

It looks like all the “pushing a woke agenda” stuff is a big talking point in certain circles because the Chief Risk Officer in UK is a lesbian woman who organized Pride Month activities and participated in LGBTQ and diversity causes. She well may be responsible for some of the failure due to the poor risk assessments made, but I don’t see how this is related to her support of diversity. Maybe the next time a company fails and we find out the CEO was a Little League coach, we should blame his involvement in baseball activities. 

Bingo!

[Arcadia]

https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/silicon-valley-faq.html
“Silicon Valley Bank - Santa Clara, California

Frequently Asked Questions

Last Updated: March 12, 2023

…

To protect the depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB). The bank will be open for a LIMITED period of time providing LIMITED services.

HOW DO I FILE A CLAIM FOR UNINSURED FUNDS?

Depositors do not need to file a claim for deposit insurance. The FDIC uses the records of Silicon Valley Bank to make deposit insurance determinations. If you have less than $250,000 you do not need to file a claim.

WHAT IF MY ACCOUNT HAS GREATER THAN $250,000?

If you would like to check to see if your accounts are insured, please visit our Electronic Deposit Insurance Estimator (EDIE) https://edie.fdic.gov.

CAN I STILL USE BANKING SERVICES INCLUDING CHECKS, ATM, AND DEBIT CARDS?

Starting Monday, March 13, 2023, you may continue to use your personal checks; for a limited period of time. 
You may use ATM/Debit cards for a limited period of time. You may continue to make deposits until the DINB closes. Online banking and bill pay services will not be available over the closing weekend, however, these services will resume Monday.

PLEASE REMEMBER TO ACT QUICKLY TO REPLACE THESE SERVICES. We are currently determining end dates on the below items:

• AUTOMATIC PAYMENT and BILL PAY
• ATM/DEBIT CARD
• DIRECT DEPOSIT AND SOCIAL SECURITY

HOW DO I CLOSE MY ACCOUNT?

There are four ways to close your account:

• Create a bill pay or automated payment to another financial institution;
• Direct a wire transfer to another financial institution;
• Write a check for your available balance, then deposit that check into an account at another financial institution; or
• Ask for a “no fee” Cashier's check or Money Order by visiting your local branch during normal business hours.
  NOTE: Please be sure to leave enough funds in your account to cover any outstanding checks.

If you prefer to speak with an FDIC Claims Agent call 1-866-799-0959 to schedule a telephone appointment.

….

WHAT HAPPENS TO MY IRA ACCOUNT?

IRA deposits are insured separately from all other accounts up to $250,000. You have 60 days to reinvest this deposit/distribution into another retirement vehicle to qualify as a rollover for income tax purposes. You should consult IRS Publication 590 and/or your tax advisor concerning the possible tax consequences of this distribution. IRS Publication 590 addresses this type of bank failure and may be obtained at www.irs.gov or by contacting your local IRS office.

….

HOW WILL I GET MY 1098/1099s FOR TAX REPORTING?

The FDIC as Receiver for Silicon Valley Bank will be responsible for mailing your 1099 tax information. Your 1098 reporting will be done by the FDIC as Receiver for Silicon Valley Bank or the servicer of your loan.”

[Arcadia]

SVB headquarters is nearby so many locals are just following out of interest. Glad people are able to get their money starting today and startup employees can get paid.

[pinball]

2 hours ago, KSera said:

It looks like all the “pushing a woke agenda” stuff is a big talking point in certain circles because the Chief Risk Officer in UK is a lesbian woman who organized Pride Month activities and participated in LGBTQ and diversity causes. She well may be responsible for some of the failure due to the poor risk assessments made, but I don’t see how this is related to her support of diversity. Maybe the next time a company fails and we find out the CEO was a Little League coach, we should blame his involvement in baseball activities. 

 

1 hour ago, Faith-manor said:

Bingo!

Well, yes, let’s blame him if he’s coaching little league and going to bingo when he is supposed to be running the company

[KSera]

55 minutes ago, pinball said:

Well, yes, let’s blame him if he’s coaching little league and going to bingo when he is supposed to be running the company

Let's blame Jay Ersapah if it can be found that she wasn't doing her job and made poor risk assessments which directly led to this. She is not running the company, despite many people clearly being confused and thinking that was her position. The bank had no Chief Risk Officer at all from April 22 until January of 2023. Eersapah serves as CRO of the UK Branch of SVB. Not sure how it is that she is now being considered the primary cause of this. Well I am, but it no one has given any evidence of what decisions she made or ignored that caused the bank to fail. I've not seen anything at all about that yet. If it's there and that's what happened, that's the thing to be talking about.

[pinball]

3 minutes ago, KSera said:

Let's blame Jay Ersapah if it can be found that she wasn't doing her job and made poor risk assessments which directly led to this. She is not running the company, despite many people clearly being confused and thinking that was her position. The bank had no Chief Risk Officer at all from April 22 until January of 2023. Eersapah serves as CRO of the UK Branch of SVB. Not sure how it is that she is now being considered the primary cause of this. Well I am, but it no one has given any evidence of what decisions she made or ignored that caused the bank to fail. I've not seen anything at all about that yet. If it's there and that's what happened, that's the thing to be talking about.

Yes, that’s exactly what I said! It’s funny how well you can read my mind

[KSera]

7 minutes ago, pinball said:

Yes, that’s exactly what I said! It’s funny how well you can read my mind

Perhaps you can spell it out more clearly what you meant then. I think that’s the inference most people would draw from what you said, so if that’s not what you meant, some clarity would be helpful.

[duckabell]

So while I know that SVC was on shaky ground and regulations had been rolled back, I have to wonder how much a handful of VCs are responsible for causing the panic and bank run. And then those same VCs were the ones to take it to twitter and social media about how this could become a contagion and affect other banks. It seemed the more they talked about it - the more likely a domino effect would happen. So not only were they playing with their own industry, but the whole economy as a whole. Low-interest rates benefit their industry a lot, so this almost felt like a lever they could pull to influence the feds on interest rates.

It ties into game theory - is it better to do what you think is best for your own personal gain (or their portfolio companies), even if that makes it more likely to bring down the whole system collectively?

Also, with the changes in social media and the speed at which you can move assets that have happened in the past decade, it adds a new level of social risk with little responsibility tied to it.

Edited March 13, 2023 by duckabell

[pinball]

9 minutes ago, KSera said:

Perhaps you can spell it out more clearly what you meant then. I think that’s the inference most people would draw from what you said, so if that’s not what you meant, some clarity would be helpful.

Don’t coach baseball or play bingo when you are supposed to be at work.

[KSera]

1 minute ago, pinball said:

Don’t coach baseball or play bingo when you are supposed to be at work.

👍

[Arcadia]

https://amp.cnn.com/cnn/business/live-news/silicon-valley-bank-collapse-updates-03-13-23/index.html
“SVB isn’t the only financial institution whose investments into government bonds and other assets have fallen dramatically in value. At the end of 2022, US banks were sitting on $620 billion in unrealized losses — assets that have decreased in price but haven’t been sold yet, according to the FDIC.”

ETA:

From MarketWatch app

”“Investors are scared by a flight of deposits to the too-big-to-fail banks,” Janney Montgomery Scott bank analyst Christopher Marinac told MarketWatch. “It’s a perception problem that’s become a perception crisis.”

During the financial crisis, the federal government established six U.S. banks as systematically important financial institutions, or SIFIs: JPMorgan Chase & Co. , Bank of America Corp. , Wells Fargo & Co. , Citigroup Inc. , Goldman Sachs Group Inc.  and Morgan Stanley .”

Edited March 13, 2023 by Arcadia

[Corraleno]

3 hours ago, duckabell said:

So while I know that SVC was on shaky ground and regulations had been rolled back, I have to wonder how much a handful of VCs are responsible for causing the panic and bank run. And then those same VCs were the ones to take it to twitter and social media about how this could become a contagion and affect other banks. It seemed the more they talked about it - the more likely a domino effect would happen. So not only were they playing with their own industry, but the whole economy as a whole. Low-interest rates benefit their industry a lot, so this almost felt like a lever they could pull to influence the feds on interest rates.

That's exactly what happened:

"Led by Peter Thiel, VCs started talking to each other and felt that they needed to protect their companies and the best way to do that was to call all of the companies and tell them to pull out of SVC right away. So everyone started to pull out and did a run on the bank."

And then, after starting the bank run on SVB, they used the threat of "contagion" and panic runs on other banks to strong-arm the Fed into agreeing to fork out billions to cover their losses that weren't FDIC insured.

[Corraleno]

According to certain media outlets, the collapse of a US bank was caused by a black lesbian executive in the UK (not US!) bank — the 75% male and entirely white US executive board were apparently powerless to prevent one gay black woman in the UK from bringing an entire US bank down just by arranging a Pride Month in the London office!

Pesky little detail: There was no run on the UK branch of SVB, which is not insolvent, so I guess she did a better job of risk assessment than the straight white head of risk assessment on the US board, eh?

A good summary of the insanity playing out in certain media:

"In a column for the Wall Street Journal, Andy Kessler writes: “SVB notes that besides 91 percent of their board being independent and 45 percent women, they also have ‘1 Black,’ ‘1 LGBTQ+,’ and ‘2 Veterans.’ I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.” [Note — the US executive team is 75% male and 100% white]

One does not have to do much to imagine how a board of 12 white men would have acted; 10 of SVB’s 11 directors are white, all of them are rich, and the youngest is 53 years old. SVB's board, it should be noted, is less diverse than any of the United State's top five banks, according to their own annual reports. 

There is, of course, literally no evidence whatsoever to suggest that SVB was “distracted” by diversity demands, and less than zero evidence that any token corporate interest in diversity led to its downfall. There is ample evidence to say, however, that while the story is complicated, the most important factor appears to have been the ... rollback of various regulations put in place after the last financial crisis to prevent banks from imploding. All of the banks that have imploded so far were totally concentrated on highly speculative, overheated sectors of the economy (cryptocurrency and startups), and slammed into the brick wall of rising interest rates and the deleterious effects on securities they held when depositors panicked. 

And yet, the idea that Silicon Valley Bank was somehow a “woke” bank and that this wokeness somehow led to its downfall has immediately taken hold by culture warriors on the right and made its way into the largest economic newspaper in the United States. This idea of SVB as “woke” seemingly originated on Twitter, when an account called The_Real_Fly posted a screenshot of a quote from senior SVB U.K. employee Jay Ersapah about representation and creating “a sense of community for our LGBTQ+ employees and allies.” “Head of Financial Risk at SVB Jay Ersapah might’ve been busy with more important projects at the bank, such as LGBTQ issues, rather than assessing risk,” they tweeted. ... 

On Monday morning... Stephen Miller tweeted that the “House GOP must subpoena SVB to learn, among other things: “How many hours & dollars were spent on equity/DEI/[environmental and social good]/climate scams.” Donald Trump Jr. tweeted that “SVB is what happens when you push a leftist/woke ideology and have that take precedent over common sense business practices.” Fox News, meanwhile, had on Home Depot cofounder Bernie Marcus to “rip ‘woke’ companies for prioritizing ‘diversity’ and ‘social policies’ and, separately, Tennessee Rep. James Comer said on air that SVB was “one of the most woke banks.”  

.....

"In the same prospectus the WSJ’s Andy Kessler uses as evidence of the company’s wokeness, that very same highly diverse board of 10 white people and one Black person said it was recommending a stockholder vote “AGAINST” a proposal that would have required an independent racial justice audit. ...

That SVB gave a halfhearted nod to diversity and inclusion in an official statement is not surprising nor is it unusual in the corporate world or in the world of banking. While no bank is actually doing that well on diversity, it should be noted that each of the top five banks in the United States have a more diverse board of directors than Silicon Valley Bank did, and that each of them give the same platitudes to diversity and inclusion that SVB does. ...

Is it "woke" to invest in American startups, to take deposits from biotech firms and cryptocurrency protocols, and to invest in government bonds? This is exactly what SVB did, and as risky or short-sighted as it may be, it's certainly not "woke." It's exactly the type of risk-seeking capitalism that low interest rates fueled for years, and is now being at least temporarily cooled off along with the rest of the economy. What happens next in terms of the effects on the U.S. banking sector—and whether this will ultimately benefit big players—is worth talking about, and maybe even getting mad about, but it has nothing to do with how many Black or LGBTQ people sit on a board."

source

 

Edited March 14, 2023 by Corraleno

[prairiewindmomma]

First Republic seems to be stabilizing with additional liquidity from Treasury and Chase: https://www.cnbc.com/2023/03/13/first-republic-drops-bank-stocks-decline.html?__source=androidappshare

SVB really messed up by selling assets.

[KSera]

1 hour ago, Corraleno said:

"In a column for the Wall Street Journal, Andy Kessler writes: “SVB notes that besides 91 percent of their board being independent and 45 percent women, they also have ‘1 Black,’ ‘1 LGBTQ+,’ and ‘2 Veterans.’ I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.”

This leaves me sputtering with no words. I just...I mean...did he actually say that out loud? Having 1 Black person, 1 LGBTQ+ person and 2 veterans indicates a company overly distracted by diversity demands? I mean....what??! It's loud and clear that Andy Kessler considers white men the default. That's a super gross quote.

[Corraleno]

26 minutes ago, KSera said:

This leaves me sputtering with no words. I just...I mean...did he actually say that out loud? Having 1 Black person, 1 LGBTQ+ person and 2 veterans indicates a company overly distracted by diversity demands? I mean....what??! It's loud and clear that Andy Kessler considers white men the default. That's a super gross quote.

"Oh no, a US bank run mostly by white men just failed, in large part because banking regulations to prevent this sort of thing were recently repealed by, and for the benefit of, a bunch of rich white men — let's blame it on a black lesbian in another country who had absolutely nothing to do with it and whose own bank did not fail!"

The only thing more pathetic than Kessler and his ilk thinking that absurd plan would work is... the fact that it worked. This totally bogus, completely invented "talking point" is now being mindlessly repeated all over social media. If only SVB had been run by 12 white men instead of 9 white men and 3 white women, this wouldn't have happened! No bank or corporation run exclusively by white men has ever failed or gone bankrupt! 

[Sneezyone]

15 minutes ago, Corraleno said:

"Oh no, a US bank run mostly by white men just failed, in large part because banking regulations to prevent this sort of thing were recently repealed by, and for the benefit of, a bunch of rich white men — let's blame it on a black lesbian in another country who had absolutely nothing to do with it and whose own bank did not fail!"

The only thing more pathetic than Kessler and his ilk thinking that absurd plan would work is... the fact that it worked. This totally bogus, completely invented "talking point" is now being mindlessly repeated all over social media. If only SVB had been run by 12 white men instead of 9 white men and 3 white women, this wouldn't have happened! No bank or corporation run exclusively by white men has ever failed or gone bankrupt! 

"The Color of Money" by Mehrsa Baradaran. It's gross and comical at the same time b/c every chapter is wash, rinse, and repeat...decade after decade after decade...

Edited March 14, 2023 by Sneezyone

[Corraleno]

Surely Fox News is not purposely trying to mislead their viewers by showing a photo of the black lesbian risk officer for the UK bank next to a photo of the US bank, instead of the married white mom of three who is the actual risk officer for the US bank? And they wouldn't purposely use the word "investing" in the title to mislead voters into thinking she was investing the bank's money in LGBT causes, rather than just engaging in the kind of normal diversity activities that occur in pretty much every bank or large corporation.

Edited March 14, 2023 by Corraleno

[Corraleno]

This is from Bank of America's website. Surely they must be on the verge of collapse with all this wokeness!

"“Having these benefits at work means that I work for a very progressive company, and it feels like I’m being supported in the right way. Being out and supported at work means that I can bring my authentic self to work every day.”
Ximena Delgado | Senior Vice President, Program Manager, Environmental, Social and Governance, Capital Deployment & Public Policy, San Francisco, Calif. 

The LGBTQ+ Pride Ally Program

Today, with more than 26,000 out at work LGBTQ+ employees and visible allies in 30 countries around the globe, our LGBTQ+ Pride Ally Program drives positive change by engaging employees in our LGBTQ+ initiatives and programs and providing opportunities to participate in educational and volunteer events. We foster an environment where LGBTQ+ employees can bring their whole selves to work with the visible support of top executives and other teammates.

Allies are effective and powerful voices of the LGBTQ+ movement. Not only do they help people in the coming-out process, they also help others understand the importance of equality, fairness, acceptance and mutual respect.

Our LGBTQ+ Pride Ally Program, an extension of our LGBTQ+ Pride Employee Network, deepens our commitment to our core values by realizing the power of our people, acting responsibly and delivering together as one team. Being an ally supports our commitment to being a great place to work for all teammates.

Events

Every June, Bank of America employees, family and friends come together to celebrate during Pride Month through various parades, festivals and other programs in support of the communities where many of us live and work. Across markets, we encourage entire communities to march together in support of Pride. We know that our differences can strengthen our connections and help to build stronger, more thriving communities. We seek to set an example of the importance of valuing, supporting, embracing and celebrating diversity.

Our active participation in Pride activities has been further enhanced by our partnership with Love Has No Labels, starting in 2015. Love Has No Labels is an Ad Council campaign designed to help Americans embrace diversity and encourage people to recognize their unconscious bias. It aims to inspire people to treat others with fairness and respect. The campaign has been incorporated into a wide range of our Employee Network activities.

Our LGBTQ+ Pride Employee Network continues to expand in Asia Pacific, adding chapters in Korea, India and China. We have also added chapters in Brazil and Mexico. Bank of America has been a platinum sponsor of Pink Dot since 2014, and members of the local LGBTQ+ Pride Employee Network have shown support for diversity and inclusion, attending such events as the Queer Culture Festival in Seoul and the Pink Dot parade in Hong Kong.

We also invest in our employees through a variety of development and learning programs that help drive our culture of inclusion, foster diverse talent, and promote teamwork and positive engagement at every level of our company. For example, since 2013, close to 20,000 employees across the U.S., EMEA and APAC markets have attended training events to become better informed about the issues facing the LGBTQ+ community and how together we can promote an inclusive working environment."

https://careers.bankofamerica.com/en-us/culture/diversity-inclusion/lgbtq

Edited March 14, 2023 by Corraleno

[Corraleno]

SVB and it's president, Greg Becker, spent half a million dollars lobbying Congress — successfully — to remove the regulations on his bank that would have prevented the collapse. Excerpt from The Guardian:

"Eight years before the second-largest bank failure in American history occurred this week, the bank’s president personally pressed Congress to reduce scrutiny of his financial institution, citing the “low risk profile of our activities and business model”, according to federal records reviewed by the Lever. Three years later – after the bank spent more than $500,000 on federal lobbying – lawmakers obliged.
.....

In 2015 Greg Becker, SVB’s president, submitted a statement to a Senate panel pushing legislators to exempt more banks – including his own – from new regulations passed in the wake of the 2008 financial crisis. Despite warnings from some senators, Becker’s lobbying effort was ultimately successful.

Touting “SVB’s deep understanding of the markets it serves, our strong risk management practices”, Becker argued that his bank would soon reach $50bn in assets, which under the law would trigger “enhanced prudential standards”, including more stringent regulations, stress tests and capital requirements for his and other similarly sized banks. Becker insisted that $250bn was a more appropriate threshold.
.....

The final rule guaranteed that category IV institutions are “not required to conduct and publicly report the results of a company-run stress test” and “reduces the required minimum frequency of liquidity stress tests and granularity of certain liquidity risk-management requirements”, according to Federal Reserve officials at the time. ... [Under the new rule, SVB was] exempt from the more frequent and detailed analyses that regulators perform to determine whether banks above $250bn of assets have sufficient capital to withstand a crisis."

The full article is here. 

[Cdan]

11 hours ago, Corraleno said:

Tennessee Rep. James Comer

James Comer is a Kentucky representative. I realize that wasn’t your mistake. I read the linked article, and Vice misstated where he is from. 

[livetoread]

Yes, we all know white men are usually sober and clear thinking and can't be distracted by things like affairs and greed and drugs and advocating for causes they believe in like deregulation. They can be counted on to do their jobs with focus and integrity. "Diverse" people, otoh, are flitting off with their woke agendas so it's easy to believe that happened here without any evidence it actually did.

This is ugly, ugly stuff. Somehow I'll manage to focus on doing all the things I need to do today while still calling out the ugliness of it - I'm just amazing for a woke woman. Maybe someday I can be as competent as a white man, though I will still, clearly, never be viewed as such by a large segment of our country.

 

[pinball]

And sometimes white men get up by 9 am to address bank collapses and that’s a BFD

😂

[stephanier.1765]

As I was walking out of Walmart this morning, I overheard a man's phone conversation. "I was telling them, 'You don't know what I'm going through.' Then I started taking out as much money as I could.'" Are people everywhere taking money out of their bank?

[Arcadia]

11 minutes ago, stephanier.1765 said:

As I was walking out of Walmart this morning, I overheard a man's phone conversation. "I was telling them, 'You don't know what I'm going through.' Then I started taking out as much money as I could.'" Are people everywhere taking money out of their bank?

When MarketWatch did an article on 20 banks most likely to fail which included SVB, Signature and First Republic (according to my husband), people started thinking and checking that the amount they have in each bank does not exceed $250k for single or $500k for double. 
I am not sure if FDIC counts the limit per bank or per type of account, as is it $250k total or $250k savings (including CDs) and $250k current. We have our accounts with Citibank and Wells Fargo which are in the list of 6 banks that are “safeties”. So we aren’t as worried about moving money around. 

Edited March 14, 2023 by Arcadia
typo

[Pawz4me]

22 minutes ago, stephanier.1765 said:

As I was walking out of Walmart this morning, I overheard a man's phone conversation. "I was telling them, 'You don't know what I'm going through.' Then I started taking out as much money as I could.'" Are people everywhere taking money out of their bank?

That could be a separation/divorce thing?

[ocelotmom]

1 hour ago, stephanier.1765 said:

As I was walking out of Walmart this morning, I overheard a man's phone conversation. "I was telling them, 'You don't know what I'm going through.' Then I started taking out as much money as I could.'" Are people everywhere taking money out of their bank?

I admit, I ordinarily pay minimal attention to financial news. However, I'm one of the people who didn't get paid last Friday because of the SVB failure. I'm fine - both my company and the payroll company addressed it admirably quickly, and even if they hadn't, I'm not living paycheck to paycheck. But hitting so close to home, it was a bit of a wakeup call to reconsider how I'm managing my finances.

Currently all my money is in one bank. While the balance is well below $250,000, something that even temporarily interfered with access to it, whether it was something widespread like a bank failure, or more personal like an account security breach, could be a major problem. Also, as far as savings go, there are banks offering much better interest rates.

Therefore, I'll likely be pulling money out of my current bank and putting it in one or more other banks in the near future. Eventually, I will likely be transferring most of the money from that bank to others, but am considering doing so gradually in order to avoid contributing to a bank run. 

However, I'm not intending to go pull my money out of banks entirely and hoard cash or anything like that. 

[prairiewindmomma]

28 minutes ago, ocelotmom said:

I admit, I ordinarily pay minimal attention to financial news. However, I'm one of the people who didn't get paid last Friday because of the SVB failure. I'm fine - both my company and the payroll company addressed it admirably quickly, and even if they hadn't, I'm not living paycheck to paycheck. But hitting so close to home, it was a bit of a wakeup call to reconsider how I'm managing my finances.

Currently all my money is in one bank. While the balance is well below $250,000, something that even temporarily interfered with access to it, whether it was something widespread like a bank failure, or more personal like an account security breach, could be a major problem. Also, as far as savings go, there are banks offering much better interest rates.

Therefore, I'll likely be pulling money out of my current bank and putting it in one or more other banks in the near future. Eventually, I will likely be transferring most of the money from that bank to others, but am considering doing so gradually in order to avoid contributing to a bank run. 

However, I'm not intending to go pull my money out of banks entirely and hoard cash or anything like that. 

Consider putting money in two banks, preferable both in the “too big to fail” list, as a way to handle a freeze.

We will always do this after traveling overseas and needing to access an atm only to discover the bank was doing a system upgrade for the next three hours and their atm access was down. Thankfully we had the other bank card. 

[Ann.without.an.e]

I’ve googled “exact meaning of woke” and “what the heck does woke have to do with banking” and I still have no idea how to respond on this thread.

So I’ll just be here in the corner and listen 😇

Edited March 14, 2023 by Ann.without.an.e

[duckabell]

We're currently in a wait-and-see with our banking. We own a small business, so the weekend bank run hit a little close to home. It would be a nightmare to not be able to run payroll because your assets are frozen due to no fault of your own and when you thought you were being prudent and responsible with your cash management. My most important job as a business owner is making payroll and taking care of our employees so they can care for our clients.

In the next few weeks, we'll likely open up business accounts with a second bank to diversify where our assets are. I'm hesitant to do it this week when things seem so fragile.

For our household accounts, they are already spread between two banks and so I feel a little more secure that way.

Edited March 14, 2023 by duckabell

[Arcadia]

1 hour ago, prairiewindmomma said:

 

We will always do this after traveling overseas and needing to access an atm only to discover the bank was doing a system upgrade for the next three hours and their atm access was down. Thankfully we had the other bank card. 

We have a credit card with BoA for similar reasons and make sure our credit cards are MasterCard and Visa (instead of all same type). We get cash from our credit cards when overseas.

[Sneezyone]

We have always operated from two banks just b/c the federal credit unions we use will advance us funds based on prior direct deposits if Congress decides to stop paying military salaries (which has happened several times in DHs career). My pay goes into one, his goes into another, and our retirement accounts are separate. It does make me wonder if we need to diversify our retirement portfolio tho.

[AnotherNewName]

On 3/13/2023 at 4:43 PM, duckabell said:

So while I know that SVC was on shaky ground and regulations had been rolled back, I have to wonder how much a handful of VCs are responsible for causing the panic and bank run. And then those same VCs were the ones to take it to twitter and social media about how this could become a contagion and affect other banks. It seemed the more they talked about it - the more likely a domino effect would happen. So not only were they playing with their own industry, but the whole economy as a whole. Low-interest rates benefit their industry a lot, so this almost felt like a lever they could pull to influence the feds on interest rates.

 

My opinion (which is also held by some who know more about this than I do) is that the Twitter/SM talk and actions of some influential VCs played a significant role in the run.  I am not certain it happens without their actions.

[Bootsie]

The structure of a bank is such that it borrows short-term.  Its source of funds are primarily depositors (who can withdraw their money at any point in time).  It then lends longer-term than it borrows.  This means that its liabilities are relatively liquid and its assets are relatively illiquid, meaning that a quick withdrawal of deposits can be devastating to a bank.  

Related to this, and intensifying the situation, is that there has recently been an inversion of the yield curve, meaning that short-term interest rates have risen above longer term interest rates.  As people started realizing that alternatives, such as money market mutual funds, were yielding a much higher rate than their bank was paying them, they began withdrawing money from banks and placing it into these alternatives.  The rising interest rates, also meant the value of the "safe investments" (lending to the US government) fell, so if the bank needed to sell some of those investments to provide liquidity for the withdrawals that were flowing to alternative investments, they would be selling them at a loss.  

[Spy Car]

48 minutes ago, Bootsie said:

The structure of a bank is such that it borrows short-term.  Its source of funds are primarily depositors (who can withdraw their money at any point in time).  It then lends longer-term than it borrows.  This means that its liabilities are relatively liquid and its assets are relatively illiquid, meaning that a quick withdrawal of deposits can be devastating to a bank.  

Related to this, and intensifying the situation, is that there has recently been an inversion of the yield curve, meaning that short-term interest rates have risen above longer term interest rates.  As people started realizing that alternatives, such as money market mutual funds, were yielding a much higher rate than their bank was paying them, they began withdrawing money from banks and placing it into these alternatives.  The rising interest rates, also meant the value of the "safe investments" (lending to the US government) fell, so if the bank needed to sell some of those investments to provide liquidity for the withdrawals that were flowing to alternative investments, they would be selling them at a loss.  

Yep. I believe that SVC also made matters worse for themselves by investing heavily in US government bonds--which are normally considered a safe investment--prior to the interest rate hikes, so that when they attempted to sell these immature assets when there was a run on their bank, they took a bath on these bonds.

Fortunately, wise leadership seems to have stepped in, giving depositors access to their funds and averting a larger banking panic.

Bill

ETA: Re-reading your post, you already made much the same point about the bonds. Forgive me. I'm tired.

Edited March 15, 2023 by Spy Car